Kenyan Authority to Reimburse Most Imperial Bank Depositors

Kenyan authorities will reimburse most depositors at Imperial Bank Ltd., the lender placed under statutory management two months ago, Central Bank of Kenya Governor Patrick Njoroge said.

About 44,300 depositors, or 89 percent of the total, will receive as much as 1 million shillings ($9,800) in the next few weeks, Njoroge told reporters Wednesday in the capital, Nairobi. The total amount to be reimbursed is about 8 billion shillings, he said. Holders of accounts above the 1-million-shilling threshhold will receive some of their money before the end of March.

It’s unclear when the Nairobi-based lender will re-open because Imperial shareholders have yet to provide adequate capital to recapitalize the bank, Njoroge said.

“I have no idea, absolutely no idea” when it will re-open, he said. “Shareholders did not play ball. They did not provide capital as requested.”

Imperial was seized less than a month after former Managing Director Abdulmalek Janmohamed died on Sept. 15. The lender held 48 billion shillings of deposits and 62 billion shillings of assets at the end of September, Njoroge said last week. The bank, with 27 branches in seven towns, is the second lender to fail since Njoroge took over his post in June.

No Recoveries

Excluding Imperial, Kenya has had 25 banks that have collapsed or been put under receivership. None of them reopened, Njoroge said.

“This was a bank that could work, but it required the co-operation, collaboration and interest of shareholders,” he said.

Refunds by the statutory manager, the Kenya Deposit Insurance Corp., will be channeled through two commercial lenders -- Kenya Commercial Bank Ltd. and the Diamond Trust Bank Kenya Ltd., Njoroge said.

Imperial is trying to recover 34 billion shillings from Janmohamed’s estate and two other defendants -- acting Managing Director Naeem Shah and acting Deputy Managing Director James Kaburu, who are both accused of fraud, according to the court documents. The case is ongoing.

Shah’s lawyer has said his client didn’t do anything wrong. Kaburu’s advocate, George Kithi, said his client was unaware of any fraudulent activity and reported it once it came to his notice.

Njoroge said the central bank was carrying out an internal audit, identifying where its processes were weak and hiring more people to strengthen its banking supervision.

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