Imperial Bank Shareholders Consent for Liquidation of Treasury Bills

The shareholders of Imperial Bank Limited (In Receivership) have given their consent for the Kenya Depositors Insurance Corporation (KDIC) to liquidate the bank’s treasury bills to facilitate the Ksh.1.5million payout announced by CBK on June 21^st.

The payout scheme, which was subject to a court ruling on case, HCCC No. 36 of 2016 filed by one of the bank’s depositors, Mr. Ashok Doshi, received the green light after a KDIC secured a Consent Order to allow the payments.

The Consent Order reads as follows:

By consent;

1. Without prejudice to the pleadings filed and respective claims, the Counsel for the 2nd Defendant on behalf of the 2nd Defendant gives an undertaking to court that after full adjudication and determination of this suit, the 2nd defendant shall, subject to its right of appeal pay any sums adjudged and due and payable to the Plaintiffs.
2. Interim orders granted on the 19th of April 2016 and extended to date are hereby discharged to allow the scheme of payment to be implemented by the 2nd Defendant.
3. Hearing on 1st and 2nd November 2016.

This consent allowed, KDIC to effect the payment of the Kes. 1,500,000/- to the respective depositors from funds in its’ possession, realized from loan repayments, given that In Judicial Review No. 43 of 2016 brought by the Shareholders of Imperial Bank Limited (In Receivership), In his ruling on June 29^th, 2016, Justice George Odunga ordered: “That save for what may be realized from loan repayment that may be required for the purposes of paying depositors and defraying the expenses required for the implementing the said agreement the Respondents shall not dispose of other assets of IBLIR pending the determination of these proceedings or other orders of this Court.”

Although the consent Order in the Doshi case allowed for the payment to the Depositors for the Kes. 1,500,000/= the said payment could only be effected out of funds collected from loan recoveries.

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On the 18^th of July 2016. Mr. Murgor on behalf of KDIC requested Justice Odunga to vary its order referred to herein above, in order to allow for payment from the treasury bonds held by the bank, since it had insufficient monies from the loan recovery account to effect the said payments.

Other than oppose the said application, and in effect cause further hardship to the Depositors, the shareholders yesterday acceded to KDIC’s request for review of the said order to allow KDIC liquidate the treasury bills to raise theKsh.9b required to make the Ksh.1.5m payment to all account holders.

“We have had the depositors at the heart of our fight for the bank. In spite of all the legal proceedings, it is our priority that the depositors and not inconvenienced further or even worse than they have already endured,” said Vishnu Dhutia, a representative of one of the shareholders.

The shareholders also called on KDIC and CBK to carry out their dealing on the bank with transparency.