More pain as cost of reviving Imperial Bank rises to Sh40 billion

By: OTIATO GUGUYU

Court documents filed last week in the Imperial Bank case show that more money was lost in the country’s biggest corporate fraud than previously revealed, raising the cost of reviving the lender to Sh40 billion.

According to court filings, the audit by Washington DC-based FTI Consulting shows that Sh38 billion was fraudulently taken from the bank.

Initially, the Central Bank of Kenya, through the appointed statutory manager — Kenya Depositors Insurance Corporation (KDIC) indicated that Sh34.9 billion had gone missing.

The revelations come even as the regulator insisted the forensic audit is not yet complete.

“There is an ongoing forensic audit as earlier mentioned. We await its outcome before commenting on specifics,” CBK Head of Communications Samson Burgei wrote in a text message.

The magnitude of the Imperial fallout has seen professional bodies whose members are likely to be implicated come out to call for a coordinated release of information to the public.

Institute of Certified Public Accounts of Kenya (Icpak) chief executive Patrick Ngumi pointed out that all parties needed to agree before anything goes public.

NEED TO COLLABORATE

“The best thing to give to the public and stakeholders on how we are dealing with this, is to ensure that we work collaboratively among all the regulators who are involved in this; we do not want Icpak to say this, Central Bank saying this, CMA saying this,” he told the Nation on telephone.

The revelations by shareholders through court documents come a week after CBK warned them against communicating with depositors about plans to revive the bank.

CBK, in a notice, claimed letters were sent to some depositors requesting their authorisation to convert their deposits to equity in the bank.

The bank’s seven owners, including Imaran Ltd, Reynolds & Company Ltd, East Africa Motors Industries Ltd, Momentum Holdings Ltd, Rex Motors Ltd, Kenblest Ltd, and Abdumal Investments Ltd, hired the American firm last month to probe the scam.

SOURCE: DAILY NATION