The Kenya Deposit Insurance Corporation (KDIC) has filed an international case in the UK seeking to freeze assets belonging to fish dealing company W.E Tilly and other shareholders accused of defrauding the collapsed Imperial Bank.
KDIC acting chief executive officer Mr Mohamud Mohamud told MPs on Wednesday that the agency has identified some of the assets in the UK and Mauritius that could be traced to the bank.
He said the international freeze order would afford investigators time to go for other unknown assets.
“We have currently managed to identify assets locally and frozen them. Our lawyers are trying to file a case in the UK to freeze the assets there and in Mauritius belonging to W.E Tilly and other toxic shareholders. We hope we will secure our first international asset tracing court order,” he said.
Mr Mohamud said recovery efforts have been hampered by poor quality of the assets of the institutions, protracted legal cases, unforeseeable judgments and lack of adequate documentations.
The Imperial Bank receiver managers will also sell Treasury bonds worth Sh11 billion held by the lender prior to its collapse to compensate depositors up to a maximum of Sh2.5 million each.
Parliament’s Finance, Planning and Trade committee was told that the receiver managers intend to spend Sh9 billion of the bonds to pay depositors starting Tuesday.
“There was some money in Treasury bonds that the Imperial Bank held before it was put under receivership and which I am going to redeem to pay depositors. The Treasury bonds are worth Sh11 billion but we shall spend only Sh9 billion and be left with a balance of Sh2 billion,” Mr Mohamud Mohamud, the KDIC acting chief executive officer told MPs on Thursday.
He said the KDIC had applied and received the go ahead from the court to convert bonds to pay depositors after exhausting the proceeds from recovery of assets.
Mr Mohamud said KDIC paid a total of Sh8 billion before the High Court stopped the payments to depositors.
“The court recently halted the payment of Sh1 million following a suit filed by one of the major depositors. However, on July 15, the court lifted the suspension of payment and we are now preparing to disburse additional Sh1.5 million to each depositor through the NIC bank, from Tuesday next week,” he told the committee chaired by Ainamoi MP Benjamin Lang’at.
The committee had invited KDIC management to provide the current status of Imperial Bank and Chase Bank which are under receivership and Dubai Bank which was placed under liquidation on Augusts 24, 2015. Dubai bank was liquidated for failing to meet its obligations.
Chase bank is currently under the management of Kenya Commercial Bank (KCB). Mr Mohamud said the KDIC is working to restore the position of the two distressed banks to normal operations.