High Court delays ruling on Imperial Bank payment
Efforts to repay Imperial Bank depositors were dealt a further blow after the High Court postpone ruling on the suspension of payments.
The court was expected to issue its ruling on July 4 but that has now been moved to July 15. This comes as lawyers go on a week long protest over extra judicial killings in the country.
This throws another spanner into the works after the Kenya Deposit Insurance Corporation (KDIC) entered into an agreement with NIC Bank to pay depositors of the bank in receivership up to Sh1.5 million. The deal was however subject to the lifting of the order to suspend payments after two depositors filed a suit in April challenging the process.
“We all remain bound by the directions of the honorable court and we shall notify all interested parties on the outcome of the Court matter,” KDIC said in a statement.
The delay to the payment process comes amidst failure by the Central Bank of Kenya (CBK) to give its verdict on the bank. The banking regulator had set a June 30 deadline to release findings of a forensic audit into the Sh34 billion fraud that led to the closure of the bank in October 2015.
CBK appointed FTI Consulting to carry out the audit and in March sought to extend the scope of the investigations. Preliminary findings showed that there were 700 suspicious accounts at the bank and at least 22,500 suspicious transactions that needed detailed investigations.
Imperial Bank owners have claimed that the regulator had been delaying the process in an effort of frustrating recovery efforts.
The shareholders have also taken issue with the appointment of NIC Bank as the assets and liabilities consultant to dispose of part of the bank’s assets arguing it amounted to liquidation of the bank.
The high court however ruled against the plan by KDIC to dispose of Imperial Bank’s assets, some of which NIC Bank was slated to acquire.
Shareholders and the regulator have been at loggerheads as to the best way to revive the bank.
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