Imperial Bank could re-open in November, CBK says

Imperial Bank is set for re-opening next month if top depositors agree to convert their savings to shareholding, the Central Bank of Kenya (CBK) has said.

CBK will be meeting with the wealthy depositors on Wednesday to sell the proposal that will also see current shareholders inject additional capital into the bank.

Investigations into the bank by receiver manager Kenya Deposit Insurance Corporation (KDIC) and forensic auditors showed issuance of fraudulent loans coupled with inadequate provisions of bad loans eroded the bank’s capital adequacy position.

“The proposal will require the injection of new capital, conversion of some of the large deposits to equity, recovery and collateralisation of the fraudulent loans, as well as a change of Board of directors and senior management,” said CBK in a press statement.

The regulator yesterday went to court seeking to freeze the property of former managing director Abdulmalek Janmohamed, the mastermind behind the scam, and those of his accomplices.

Mr Janmohamed, who died last month, is accused of running an elaborate fraud scheme that robbed the bank of S4 billion over a period of 13 years, forcing CBK to shut it down earlier this month.

READ: How Imperial Bank chief stole savers’ billions

“The proposal envisages full access to small deposits and a structured schedule of repayment to large depositors,” said CBK.