Imperial’s receivers get extra time to seal deal
- Posted by: frokem
- Category: Insurance
Imperial Bank’s receivership which was to end yesterday has been extended by another 70 days.
The High Court order will allow Central Bank of Kenya to negotiate a better deal for depositors with Kenya Commercial Bank which is the sole bidder for the troubled lender’s acquisition.
Last week, CBK announced KCB as the front runner in acquisition of the bank that was put under receivership in October 2015 after the other bidder pulled out.
Imperial Bank collapsed after it emerged that it was operating two sets of books, with a potential fraud of $449 million (Sh44.9 billion).
The extension follows an agreement reached last Friday between depositors, Kenya Deposit Insurance Corporation (KDIC) and Central Bank to push KCB’s offer as far up to maximise value for depositors.
A source who attended the meeting said KCB had offered depositors less than 40 per cent of their deposits. CBK had called for the meeting to seek depositors backing to extend receivership.
This is the fourth time Imperial Bank receivership is being extended. In August last year the High Court granted both parties a one year extension period to enable the regulator to move on with seeking a potential strategic investor.
Depositors yesterday took to their Facebook page, Imperial Bank Depositors Lobby Group to welcome the extension, but insisted that CBK must involve them in all negotiation stages within those 70 days.
“Did the court instruct CBK to keep depositors or lobby group well informed in those 70 days or is it going to be silent treatment till the 68th day,” a depositor, Zhoya Patel asked.
“This extension must be used well to arrive at the best conclusion to resolve depositors’ problems. May God give us life to see the buyout of imperial bank,’’ another depositor Hannington Wanyama said.
Others dismissed the extension as the usual circus used to keep depositors waiting.
In June last year, CBK released a tentative timeline for the revival of the bank that needs Sh40 billion capital injection, anticipating final transaction to take place by end of June this year.
The extension puts the regulator almost four months behind its schedule to wind up the bank.