Large depositors with more than Sh1.5 million in collapsed Imperial Bank say they have been kept in the dark over their money. It will be one year today since their cash account was locked.
The lender was put under receivership by the Central Bank of Kenya, and the regulator (CBK) put Imperial Bank's management under the Kenya Deposit Insurance Company on October 13 last year. Initially, the KDIC was supposed to manage IBL for 12 months, but the period was extended by six months last week.
The depositors said the CBK has for the past one year provided little information about the progress made in recovering their money.
The depositors' Nairobi lobby group spokesperson, Mahmoud Khambiye, said they are anxious, and the continued failure by the CBK to update them on the status of their money is fueling speculation that their cash may not be recovered.
“We are wondering why there have been no arrest yet the CBK has the forensic report. They have only been bringing parts of the report to court. We see this as a ploy to protect individuals mentioned in the report,” said Khambiye yesterday in an interview.
He said large depositors are concerned because nobody has been held responsible for the crime that caused the bank to shut down. Khambiye said this is happening even after the CBK commissioned the forensic investigation on Imperial Bank.
The CBK on September 30 sued the former directors of the troubled bank, and sought to freeze assets worth Sh42 billion held in more than 40 companies. This followed lengthy investigations by US forensic auditor, FTI Consulting, and Banking Fraud Investigations Department of the Kenya Police since October last year.
“The investigation is largely complete and now we are working with prosecution entities and other agencies to cross this bridge safely,” the CBK governor Patrick Njoroge said on September 21. “The evidence will help in the recovery of assets and bring those responsible to task.”
An attempt by the former directors to have the order to freeze their assets was dismissed on October 5. The court directed the ex-directors not to dispose off any of their assets.
Most of the 44,300 depositors who had less than Sh1 million have already been paid, through KCB and Diamond Trust Bank between December and June 2016, the CBK said.
NIC Bank, which was appointed on June 21 as the asset and liabilities consultant for Imperial Bank, started processing payments of up to Sh1.5 million on behalf of the KDIC on July 26, after a ruling not to pay depositors by the High Court was temporarily suspended by shareholders through a court order on July 15.
There has been no word on the payments to depositors with more than Sh1.5 million. Khambiye said the past one year has been difficult for them, as they have not been consulted on decisions being made.
“We feel like we have been forgotten despite being the ones who lost the money at Imperial Bank.”
Imperial Bank was founded in 1992 and shut down on October 13, 2015, after the CBK “became aware of unsafe or unsound business conditions” in the bank.
The lender had 17 branches spread over Kenya and Uganda when it was put under receivership. The Ugandan subsidiary was auctioned for Sh692.4 million in March.
According to the CBK, the takeover was ordered in the interest of debtors, creditors and members of the public.
The CBK appointed the KDIC to run the bank for a period of 12 months, and develop a possible reopening strategy.