Imperial Bank shareholders denied bid to join Sh34bn fraud case

Justice Fred Ochieng on Wednesday ruled that allowing them to join the case as co-complainants might drag it.

Imperial Bank Chairman Alnashir Popat (second left) and other directors during the bank's first press briefing by shareholders since its closure four months ago on January 12, 2015. The High Court on April 13, 2016 rejected a bid by Imperial Bank shareholders to be enjoined in a case against the bank's looters. PHOTO | DIANA NGILA | NATION MEDIA GROUP  

In Summary

• The shareholders, in their application, had claimed that the KDIC failed to pursue two companies that were tagged in an audit report as possible suspects in the Sh34 billion fraud.
• The Imperial owners accused the KDIC of being compromised because it was reluctant to pursue Central Bank of Kenya employees believed to be part of the fraud scam.

By BRIAN WASUN
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The High Court has declined to enjoin Imperial Bank shareholders in a case the lender filed against 20 companies and individuals in a bid to recover over Sh34 billion they allegedly stole from depositors alongside founder Abdulmalek Janmohammed.

Justice Fred Ochieng on Wednesday ruled that allowing them to join the case as co-complainants might drag it as they intend to pursue conflicting interests from those of the Kenya Deposit Insurance Corporation (KDIC) — Imperial Bank’s receiver manager.

The shareholders, in their application, had claimed that the KDIC failed to pursue two companies that were tagged in an audit report as possible suspects in the Sh34 billion fraud.

They also accused the KDIC of being compromised because it was reluctant to pursue Central Bank of Kenya employees believed to be part of the fraud scam.

FTI Consulting, in its report on Imperial Bank, recommended the pursuit of Adra International and Jade Petroleum — a company associated with the families of billionaire fugitives Pankaj Somaia and Yagnesh Devani.

“In my considered view, they see the receiver as compromised by virtue of the fact that it was appointed by a party who was complicit in the irregular dealings at the bank. Those are not the views of a party that is keen on working with the receiver. If the parties who were on one side of a case had competing interests, they were unlikely to work in tandem,” held Justice Ochieng.