BY PAUL TENTENA
KAMPALA, UGANDA – A Company which had deposits in the collapsed Imperial Bank, Pontrilas Investment Bank, has taken the Central Bank of Kenya (CBK) and the Attorney General of the Republic of Kenya to the highest court in East Africa seeking to be compensated for their lost funds.
In the suit filed in the East African Court of Justice, the applicant says the two entities have been in violation of their rights to property, consumer protection and fair administrative of justice.
The law suit says CBK failed to exercise good governance and application of rule of law in their supervision of Imperial Bank that it allowed Imperial management to steal from depositors.
From the year 2012 leading to the period of the deficit upon Imperial Bank collapse of $380 million in bad loans and consumer deposits.
The fraud was carried out under the instructions of the former Group MD, Abdulmalek Janmohaned through a series of fictitious loans to a number of companies controlled by him and his associates.
The applicant says in the suit papers that some senior officials in the CBK’s Banking Supervision Department conspired with senior management in imperial and the former governor who turned a blind eye to what was happening in the bank and continued to license it up to 2015.
Imperial Bank LTD was put into receivership in October 13, 2015 after the discovery of the fraud, a move that nearly destabilized the banking sector in East Africa’s biggest economy.
The bank had subsidiaries in Uganda. The Bank of Uganda expedited the sale of Imperial Bank Uganda and managed to save depositors.
In an affidavit, Wambui Kibicho, a director in Pontirals Investment fears that the bank is headed for liquidation. Affidavit 10.14-10.16 “The applicants case is that the 1st respondent by its governor told the applicants that if a buyer is not found, imperial bank would be liquidated.
Kibicho says, “I am advised that it will be a remote possibility to sell Imperial bank given the litigation ongoing and the number of depositors whose funds would need to be repaid with interest as part of any acceptable package. I am of the belief there is no goodwill left in the imperial brand and that the applicants only remedy is to seek relief from this court.”
The application is asking the court for a declaration for compensation jointly and severally by both respondents for loss suffered by the applicant and interest accrued.