Court opens window for Imperial Bank depositors to get their money back
Imperial Bank's branch in Likoni, Mombasa on October 14, 2015. PHOTO | KEVIN ODIT | NATION MEDIA GROUP
What you need to know:
On Friday, Justice Patrick Otieno discharged orders to allow the schemes of payment to be implemented by the troubled bank.
The orders were issued in April following an application by Mombasa-based billionaire Ashok Doshi and his wife Amit, who had sought the suspension of the schemes of payment which were being implemented.
Depositors of Imperial Bank, which is under receivership, are likely to get back their money after the High Court in Mombasa lifted orders suspending schemes of payment which were being implemented.
On Friday, Justice Patrick Otieno discharged the orders to allow the schemes of payment to be implemented by the troubled bank.
The orders were issued in April following an application by Mombasa-based billionaire Ashok Doshi and his wife Amit, who had sought the suspension of the schemes of payment which were being implemented.
The lifting of the orders was as a result of a consent order between the Doshis, the Central Bank of Kenya and the bank.
According to the consent, Imperial Bank gave an undertaking to court that after full adjudication and determination of the suit and “it shall, subject to the right of appeal, pay any money adjudged due".
“Interim orders granted are hereby discharged to allow the schemes of payment to be implemented by the second defendant (Imperial Bank),” the consent signed by lawyers for the parties read in part.
CBK however still faces another court hurdle placed in its path by Imperial Bank depositors, who have obtained an order against sale of the collapsed lender’s assets.
Justice George Odunga late last month stopped the Kenya Deposit Insurance Corporation (KDIC) from disposing of Imperial Bank’s assets, some of which NIC Bank was slated to acquire.
The judge however allowed the KDIC and NIC Bank to continue paying savers using money from the Deposit Insurance Fund and recovered loans, but ruled that Imperial Bank’s assets must be preserved for now to avoid nullifying a case filed by the collapsed lender’s shareholders challenging its apparent liquidation.
DISMISSED OBJECTION
Prior to the consent, Justice Otieno dismissed a preliminary objection filed by Imperial Bank challenging the jurisdiction of the court to handle the case.
The complainants who had a Sh1 billion deposit at Imperial bank also wanted the court to order the defendants to deposit the same amount of money into an escrow account in the names of their advocates.
Through their lawyer Francis Kadima, the two wanted an injunction restraining CBK and Imperial Bank from further continuing with any dealing of their money in any manner either by investing, transferring to banks or Kenya Insurance Deposit Corporation.
They also sought an order directing the defendants to file Imperial Bank statement of account showing liquidity in the deposit account, audit statement published and approved for 2014/2015 and any other liquid and tangible securities held by CBK as at October 13, last year.
The application by the couple was based on the grounds that they held both dollar and shillings accounts with Imperial Bank which is under receivership as at October 13, last year.
In his affidavit in support of the application, Mr Ashok Doshi said together with his partner learnt through a press release that Imperial bank had been put under receivership.
