Imperial Bank clients get high refunds
Imperial Bank branch in Likoni, Mombasa after the bank was placed under receivership in this photo taken on October 14, 2015. FILE PHOTO | KEVIN ODIT
What you need to know:
- The High Court has allowed Imperial Bank receiver managers to give customers of the collapsed lender up to Sh2.5 million of their deposits.
- Justice George Odunga Monday clarified through a ruling that he had not stopped the payout that the Kenya Deposit Insurance Corporation (KDIC) initiated through NIC, KCB and DTB banks.
- Justice Odunga’s November judgment caused a standoff between the KDIC, depositors and shareholders who held contrasting interpretations.
The High Court has allowed Imperial Bank receiver managers to give customers of the collapsed lender up to Sh2.5 million of their deposits.
Justice George Odunga Monday clarified through a ruling that he had not stopped the payout that the Kenya Deposit Insurance Corporation (KDIC) initiated through NIC, KCB and DTB banks.
The judge ruled that he had no authority to stop the KDIC from issuing the part payments to Imperial Bank depositors or from liquidating the troubled bank if the processes are done legally.
“The court did not stop and even during the pendency of the application had not stopped the respondents in conjunction with DTB, KCB and NIC Bank from disbursing funds to the depositors,” ruled Justice Odunga.
The Imperial Bank Depositors’ lobby had, through an application last month, requested Justice Odunga to clarify a judgment he delivered in November and state whether it allowed the KDIC to continue with the deposits payout.
Contrasting interpretations
Justice Odunga’s November judgment caused a standoff between the KDIC, depositors and shareholders who held contrasting interpretations.
Shareholders of the collapsed lender claimed that the CBK had been barred from continuing with the release of deposits through NIC Bank.
“In my judgment of 4th November, 2016, this court was clear in its mind that it cannot stop the respondents from carrying out their statutory mandate.
However, such mandate had to comply with the law and the Constitution, in particular Article 47 of the Constitution. I trust that this short ruling clarifies this court’s decision and if there was any confusion the same has been dispelled,” ruled Justice Odunga.
Sought answers
The depositors’ lobby group requested the interpretation after failing to secure a round-table meeting with the KDIC, from which it had sought answers on the receiver manager’s tenure at Imperial Bank.
The lender was placed in receivership in October 2015, after the discovery of a reported Sh44.7 billion looting scheme allegedly orchestrated by former Imperial Bank managing director Abdulmalek Janmohammed.
