Imperial Bank owners seek piece of Sh38bn suit citing need to reopen

By: ABIUD OCHIENG

Shareholders of the troubled Imperial Bank are seeking to be allowed to participate in a case that the institution has filed against some of the companies and people believed to have colluded with its former managing director to fraudulently acquire Sh38 billion from the institution.

The eight owners, through lawyers Njoroge Regeru and Andrew Wandabwa, on Wednesday told Justice Fred Ochieng that they have distinct interests from those of the receiver on behalf of the bank, hence their desire to be allowed to participate as co-plaintiffs.

They said it had become apparent after the death of the bank’s former MD, Abdulmalek Janmohamed, that there had been irregular disbursement of vast amounts of money, thereby exposing the institution, its depositors, bond holders, directors, shareholders and other stakeholders, to great loss and damage.

Consequently, the board of directors engaged forensic consultants with a view to ascertaining the actual position of the bank’s financial position and from the finding, it was clear that the accounting system had been manipulated to conceal fraudulent disbursements of about Sh38 billion.

“The bank’s board duly notified the Central Bank of Kenya of the illegalities perpetrated at the bank by the deceased and the bank’s other senior officers, and as a consequence, the regulator placed the bank under receivership,” the shareholders said in court papers.

The receiver, on behalf of the bank, then instituted the current case against 20 people and companies, seeking to recover the fraudulently disbursed sums.

FRESH CAPITAL

It is this case that the shareholders, namely Imaran Ltd, Reynolds & Company Ltd, East Africa Motors Industries Ltd, Momentum Holdings Ltd, Rex Motors Ltd, Kenblest Ltd, and Abdumal Investments Ltd, are seeking to join.

Among other reasons prompting their desire to be enjoined is that in an effort to reopen the bank and to resume operations, the CBK has requested shareholders to inject fresh capital into the lender, running into billions of shillings.

“Our liability in respect of the additional capital is directly proportionate to such amount as may be recovered from the defendants upon the hearing and determination of this suit,” said the shareholders.

They said upon the hearing and determination of the suit, shareholders, having been exposed to the liability of injecting new capital, would be entitled to any surplus funds realised and to restitution to the positions that they would have occupied had the illegal disbursements not taken place.

The case will be heard on December 22.

SOURCE: DAILY NATION