Breaking News: At least 10 feared to have drowned in Makueni river
NIC suffers setback in bid to take over collapsed lender
Imperial Bank clients in Mombasa read a closure notice of the bank posted on the gate. FILE PHOTO | NATION MEDIA GROUP
What you need to know:
- The KDIC last week appointed NIC Bank as the “asset and liabilities consultant” for Imperial Bank, a role that was to see it also acquire a portion of assets owned by the collapsed lender and help in recovery of loans.
NIC Bank’s planned takeover of some Imperial Bank assets has been dealt a blow following a High Court directive to preserve the collapsed lender’s property until an application filed by its shareholders has been determined.
Justice George Odunga yesterday stopped the Kenya Deposit Insurance Corporation from disposing of Imperial Bank’s assets, some of which NIC Bank was slated to acquire.
The judge 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.
Recovery of loans
The KDIC last week appointed NIC Bank as the “asset and liabilities consultant” for Imperial Bank, a role that was to see it also acquire a portion of assets owned by the collapsed lender and help in recovery of loans.
The deal was also to see NIC Bank acquire some of Imperial Bank’s liabilities.
“Save for what may be realised from loan repayment that may be required for purposes of paying depositors and defraying the expenses required for implementing the said agreement, the respondents (the KDIC and Central Bank of Kenya) shall not dispose of other assets of Imperial Bank Limited pending the determination of these proceedings or other orders of this court,” the judge ruled.
NIC Bank was also tasked with paying account holders with up to Sh2.5 million under the deal with the KDIC, subject to the Mombasa High Court lifting a suspension on payments in a separate suit filed by billionaire businessman and customer Ashok Doshi.
The Mombasa ruling on suspension of deposits will be delivered on July 4. Imperial Bank owners told the court that transferring assets and liabilities to NIC Bank amounted to winding up the lender and would nullify an ongoing court case where they are seeking to stop any actions that may lead to liquidation of the bank.
