- The bank was placed under receivership in October 2015
- At least Sh46 billion is said to have been looted by senior officials
The Central Bank of Kenya has appointed the Kenya Deposit and Insurance Corporation to liquidate the defunct Imperial Bank after efforts to revive it failed.
In a statement on Thursday , the banking regulator said the decision to windup followed a comprehensive audit of the lender's assets which were found to be weak.
''On December 7, KDIC submitted a receivership report on Imperial Bank. It noted that considering the weak status of the bank's financial position, liquidation is the only feasible option,'' CBK said.
The apex bank placed Imperial Bank under receivership in October 2015 after it emerged that it was operating two sets of books, with a potential fraud of $449 million (approx. Sh46 billion) that placed depositor funds at risk.
Shareholders were accused for irregularly paying themselves $27 million (approx. Sh2.7 billion) as dividends when the bank was not making any profit and a further $20 million (approx. Sh2 billion) claimed from the directors for recklessly lending to firms.
Immediately after being appointed as a receiver, KDIC commenced recovery measures in a bid to refund depositors, a move that has since seen 45,700 out of 50,000 clients with deposits below Sh1 million fully compensated.
This, after KCB Group, acquired assets worth Sh3.2 billion and assumed liabilities of the same value.
According to CBK, the money raised, which represented 37.3 per cent of the total deposits, was to be paid to depositors across four years.
The recovery, however, excluded 50 per cent of loan assets that are linked to ongoing litigation.
More to follow