Imperial Bank owners to pump in Sh10b towards the bank's recovery plan

Chairman says shareholders are ready to do whatever it takes to get the bank back on its feet.

Wednesday January 27 2016

Imperial Bank Chairman Alnashir Popat during the bank's shareholders' press briefing on January 12, 2015. Imperial Bank shareholders have agreed to remit Sh10 billion to CBK. PHOTO | DIANA NGILA | NATION MEDIA GROUP

Imperial Bank Chairman Alnashir Popat during the bank's shareholders' press briefing on January 12, 2015. Imperial Bank shareholders have agreed to remit Sh10 billion to CBK. PHOTO | DIANA NGILA | NATION MEDIA GROUP 

By BRIAN NGUGI
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Shareholders of troubled Imperial Bank are ready to remit Sh10 billion to the Central Bank of Kenya, (CBK) as part of a recovery plan fronted by the regulator involving injection of fresh capital.

On Tuesday, Imperial Bank Chairman Alnashir Popat told the Nation that the shareholders “always have been and remain very committed” to seeing the bank recover.

“Since this crisis erupted the shareholders have wanted to work with the regulator and a professional team to recapitalise the bank. It was always made clear that the proposed injection of Sh10 billion would need to be raised – mobilised – from the resources of the shareholders and their associates and partners,” Mr Popat said in an interview.

Last week CBK governor Patrick Njoroge said owners should back their often-stated commitment to recapitalise the bank by first remitting Sh10 billion to CBK, a move which would pave way for talks on the lender’s possible reopening.

ENOUGH RESOURCES

Dr Njoroge said at a press conference that: “Yes they say they have a proposal to pump in Sh10 billion; we wanted enough resources to reopen the bank in November, that didn’t happen because no resources came. We told them we have an account here, put the money there and we get moving but nothing happened, giving us the impression that they were unwilling to move in that direction.”

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He added: “We had no choice but to take the direction we have outlined. I will say it now loud and clear that there is an account here at the CBK and if indeed there is Sh10 billion out there, put it in that account then we talk.”

Mr Popat, however, said the regulator should equally provide a clear recapitalisation and recovery framework noting that “to make such a huge investment required – still requires – a proper framework.”

“As with any investment, the injection of such amounts of new capital will have to be made within a clear financial and legal framework and this may bring with it some financial, legal and regulatory hurdles.”

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