Court Order Only Stopped Liquidation of Imperial Bank Liquidation – Judge

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The High Court has clarified that it did not stop Central Bank of Kenya (CBK) and Kenya Deposit Insurance Corporation (KDIC) from disbursing funds to Imperial Bank depositors until all options of reviving the bank have been considered.

High Court Judge George Odunga on Monday said the November 4, 2016 judgement only stopped CBK and KDIC stopped from liquidating Imperial Bank Limited until the relevant legal provisions are complied with.

“In my judgement of 4th November, 2016, this Court was clear in its mind that it cannot stop the Respondents from carrying out their statutory mandate. However, such mandate had to comply with the law and the Constitution In particular Article 47 of the Constitution,” read part of the judgement.

“Further the Respondents were directed not to drive the Bank into liquidation unless and until all options of reviving the bank have been considered. Subject to the foregoing, the Court did not stop and even during the pendency of the application had not stopped the Respondents in conjunction with the 1st (CBK), 2nd (KDIC) and 4th (NIC Bank Limited) interested parties from disbursing funds to the depositors.”

The law firm of Ms. Josephine Awino Ogweno T/AJ Kogweno and Associates, an interested party in the suit, moved to court seeking an interpretation of the ruling. It sought orders to know whether the judgement permits or prohibits the process of transfer of assets and liabilities of Imperial Bank to enable depositors access their remaining deposits and in particular the payment of deposits of up to 40 per cent.

The law firm claimed that following the orders given by the court, KDIC failed to provide adequate assurances to implement a proposal that will enable the lifting of the receivership, re-opening of the Bank, and resumption of normal activities for its customers.

Read: KDIC and CBK Reiterate Commitment to Protect Interest of Imperial Bank Depositors 

Nevertheless, in his ruling, Odunga said the court cannot stop CBK and KDIC from carrying out their statutory mandate but they have to comply with the law and the constitution.

“In other words this Court only restated the legal and constitutional position that the actions of the Respondents must bow to the due process of the law and nothing else.”

Read: Imperial Bank Depositors To Access 10% of Their Deposits

 

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David Indeje

David Indeje is a writer and editor, with interests on how technology is changing journalism, government and society. He has been practicing Journalism since 2008. Environment, Agriculture Business, Health and Gender Development stories are his passion. David can be reached on: (020) 528 0222 or Email: info@ye42a.hosts.cx