Directors of collapsed lender sue Cofek for linking them to fraud

Corporate News

An outlet of the troubled Imperial Bank in Nairobi. PHOTO | FILE 

By BRIAN WASUNA

In Summary

• Directors of the troubled Imperial Bank want Cofek compelled to pull down an article it published on its website linking them to the fraud scheme, which saw the bank lose Sh34.9 billion of customers’ deposits.

Directors of the troubled Imperial Bank have sued the Consumer Federation of Kenya (Cofek) for linking them to a 13-year long fraud scheme allegedly run by the lender’s former managing director Abdulmalek Janmohammed.

The directors want the consumers lobby compelled to pull down an article it published on its website linking them to the fraud scheme, which saw the bank lose Sh34.9 billion of customers’ deposits.

They also want Cofek stopped from publishing any articles regarding their roles as directors at the troubled bank.

Cofek published the article on November 20 following a telephone interview with former Imperial Bank chairman Alnashir Popat.

The directors also want the recording of the interview delivered in court.

“Given the sensitivity of the issue of the bank’s closure as well as the grave allegations raised against the directors, Cofek ought not to have published the article prior to giving the directors an opportunity to respond to the grave allegations raised against them,” Jinit Shah, one of the directors says in suit papers.

Cofek is yet to respond to the suit. The lobby pulled down the article from its website on November 25 after receiving a demand letter from the Imperial Bank directors.

Mr Shah, however, holds that Cofek’s website has a wide readership that saw several Internet users read the story, which he insists has damaged the reputation of Imperial Bank’s directors.

He adds that the consumers lobby admitted to his lawyer that it had a recording of the interview with Mr Popat.

The directors want Cofek stopped from making copies of the recording or distributing it until the suit is heard and determined.

But Mr Popat says he was not aware that the conversation was being recorded and that he did not consent to the same.

The suit comes as the Central Bank of Kenya has shown signs of dissolving the lender following a directive that all depositors with less than Sh1 million in their accounts be allowed to access all their money.