Fish firm says Sh10bn Imperial Bank letter was work of trickery

Corporate News

Imperial Bank customers outside a branch in Mombasa on learning the lender had been closed. PHOTO | FILE 

By BRIAN WASUNA, bwasuna@ke.nationmedia.com

In Summary

• W. E. Tilley claims in court filings that Imperial Bank’s directors tricked it into writing a letter to the CBK in which it admitted to receiving Sh10 billion and expressed willingness to refund the colossal amount.
• The firm says Imperial Bank’s directors only mentioned that it would be a “letter of comfort” to the Central Bank of Kenya, which had begun an in-depth investigation into the lender.

Fish processing firm W. E. Tilley has denied owing the collapsed Imperial Bank Sh10 billion, claiming in court that the bank’s directors tricked it into writing a letter to the Central Bank that put it right at the centre of an alleged fraud.

Tilley claims in court filings that Imperial Bank’s directors tricked it into writing a letter to the CBK — three days before Imperial Bank was placed under receivership — in which it admitted to receiving Sh10 billion and expressed willingness to refund the colossal amount.

The fish processor says Imperial Bank’s directors only mentioned that it would be a “letter of comfort” to the Central Bank of Kenya, which had begun an in-depth investigation into the lender.

Imperial Bank’s receiver manager while filing the suit against Tilley and 12 other companies to recover Sh34 billion looted from the lender said that the fish processor was ready to return what it received from the collapsed lender.

But Tilley now says Imperial Bank’s directors intentionally misrepresented to it that the letter would have no legal impact yet it was part of a plan to implicate the fish processor in the murky scandal.

“In fact, Imperial Bank’s directors’ representation was false and made fraudulently...The defendant admits writing the letter but avers that the letter was only written upon representation from Imperial Bank’s directors that it was intended as a letter of comfort to pacify the CBK who were conducting in-depth investigations into Imperial Bank’s operations,” W.E. Tilley says.

The Kenya Deposit Insurance Corporation (KDIC) says in court papers that Tilley was the lead company in a network of firms that colluded with Imperial Bank founder Abdulmalek Janmohammed to plunder Sh34 billion from depositors’ accounts in a 13-year scheme.

READ: Firm that stopped Dubai Bank wind-up named in Imperial row

The fish processor wants the letter disregarded and says its authorship was not approved by W.E. Tilley’s directors as required by law.

“The letter cannot be deemed binding or as an admission of liability because it was written without the authority of W.E. Tilley’s directors.... W.E. Tilley could not have lawfully pledged securities or assets belonging or pledged to third parties without their authorities,” Tilley says.

The KDIC in October obtained a court order freezing properties and bank accounts owned by the 12 firms and eight individuals. The individuals are directors in the 12 firms and are relatives.

They include Zulfikar, Nasir, Nargis, Nadir, Firoz, Salim, Irfan and Nashiv Jessa. Zulfikar Jessa has now denied that the 12 firms are interlinked, and insists that they are all independently owned and managed.

The fish processor says it had no role in the scam and accuses the lender’s directors, its auditors —PKF— and CBK staff.

“A fraud of the magnitude alleged by the plaintiff could not have occurred without the complicity of the CBK, the bank’s directors... and PKF who were the bank’s internal auditors.”