Imperial Bank Shareholders Reiterate Commitment to Reopening the Bank

Imperial Bank Limited (IBL) shareholders today reiterated their commitment to support the re-opening of the bank, through pushing for the implementation of a recovery plan that proposes 100% compensation to all depositors and bondholders in the shortest time possible.

Calling on the Central Bank of Kenya to have a more constructive dialogue with the shareholders to work on a viable recovery plan, the Chairman, Mr. Alnashir Popat pointed out the need for KDIC to share the bank’s state of affairs; information that will support the proposed additional capital injection.

“Regrettably there has been no formal response to our plan, nor the presentation of an alternative solution for the Bank from CBK or KDIC. Instead there has been an orchestrated blame game against the non-executive directors and shareholders of the Bank. We will not allow this to continue and are prepared to protect our rights in a court of law.”

Together with the majority of the shareholders, Mr. Popat pointed out that to the best of the non-executive director’s knowledge, the bank was being operated within the strict confines of the law was over the years reinforced by a number of factors including periodic and regular on- and off-site inspections by the CBK, and at no time did the CBK and independent audit under the supervision and approval of the industry regulator ahead of publishing.

“The Bank performed well over the years as reflected in its returns, expansion of the Bank’s branch network, technological advances, a satisfied, supportive customer base and a largely diligent, committed and well-motivated work force,” he said.

Mr. Popat added that: “It was further revealed to the board and shareholders that the fraudulent and irregular disbursements had been concealed through improper accounting methods of suppressing assets and liabilities, and what we now know to be reports that had been ‘doctored’ by certain senior Bank employees, including falsified board documents and borrower lists. We have further established that the CBK and the Bank’s external auditors, PKF Kenya, may have failed in their audit duties. The investigations revealed that the external auditors appear to have failed in their duty to conduct the audit according to laid down standards, and to have failed to perform basic tests, while it appears that the CBK not only failed in its supervision duties but also failed to respond to ‘tip-offs’ given directly to them with the due care and seriousness that this required.“

In the non- executive director’s first public appearance since the bank was placed under receivership, the chairman used the opportunity to empathise with all bank stakeholders including depositors, bondholders and the staff of Imperial Bank, whom he described as “heart and soul of the institution” urging them to remain committed to re-open the bank.

In conclusion, the Chairman stated, “We believe the Governor of the CBK to be a principled man whose institution has been compromised by a handful of deceitful associates. We find ourselves in a similar situation and urge him to engage and work with our steering committee and restructuring experts to reopen Imperial Bank. There is too much at stake to lose sight of what is important and we are committed to the cause and prepared to fight for the right to reopen this bank. We urge the Governor to do the same.”