By JAINDI KISERO
In Summary
- CBK cannot stand on the moral ground and belatedly start pretending that it is best placed to prosecute the interest of the ordinary depositor.
One month later, the Imperial Bank depositor has not had access to his hard-earned savings.
Initially, expectations were high that new Central Bank of
Kenya governor Patrick Njoroge - widely regarded as untainted and free from capture by the cartel of big borrowers and its allies within CBK said to be fighting behind the scenes to have the bank permanently shut - would win the day and deliver a decision in favour of the poor depositor.
Indeed, Dr Njoroge has raised the hopes of the
depositors by going on record several times to assure them that the bank
would be reopened very soon. Yet beyond the rhetoric, the truth of the
matter is that tangible action is not happening and chances of a quick
reopening are beginning to look dimmer and dimmer.
A whole month later, we haven’t heard of a
‘statement of affairs’. No proper due diligence has been conducted save
for the 10-day forensic audit conducted by New York-based FTI. Yet we
all know that before any capital injection happens, a mandatory due
diligence process would have to be done.
What I gather from CBK sources and parties involved
in the matter is all that has happened in the last four weeks are
unending meetings between Central Bank and the shareholders where
parties have been engaging in sterile agreements about who between them
bears the biggest responsibility for reopening the bank.
A source from CBK told me that during a meeting on
Wednesday, it was clear that the parties were yet to reach a consensus
on several issues.
First, it seems that CBK wants the shareholders to
put in more money in the bank. The shareholders have so far pledged to
raise Sh10 billion.
With the bank in a negative capital position and
having lost capital, the shareholders have pleaded that their offer be
accepted.
They reportedly informed CBK during the meeting
that they have been forced to sell their assets and borrow money to
raise the Sh10 billion.
Secondly, it seems that the parties are yet to
reach an agreement on a formula for converting deposits into shares- and
on the rate of interest to be paid on deposits that would be converted
into shares.
Then there is the argument about who between the
CBK and the shareholders of Imperial Bank should bear the greatest
responsibility of restructuring and perfecting the loan by W. Tilley,
by far the largest borrower in Imperial Bank with unsecured facilities
running into tens of billions.
I have said it before in this column and will say
it again that on the matter of Imperial Bank, CBK cannot stand on the
moral ground and belatedly start pretending that it is best placed to
prosecute the interest of the ordinary depositor.
The genesis of this crisis was a conspiracy between
CBK’s supervision department, the external auditors and former managing
director, the late Abdul Janmohammed. What can one say of a CBK
inspection and audit system that fails to capture nearly 60 per cent of a
bank’s loan book?
It is all very well to play hard ball with the
shareholders and to treat their rescue plan with more circumspection.
But we must all remember that at the end of the day, this is a limited
liability company.
What if the shareholders decide to withdraw from
the negotiations altogether? You don’t turn away a shareholder who is
ready with a bailout cheque.
No comments :
Post a Comment