Imperial bank directors in fresh attempt to block CMA probe

Former Imperial bank directors have made a fresh attempt to block the Capital Markets Authority (CMA) from initiating proceedings probing their role in the issuance of a Ksh.2 billion corporate bond in 2015.

In their third attempt to stop the proceedings after a High Court and Court of Appeal battle, the eight directors have filed at instant appeal at the CMA Tribunal.

This in attempt to force a stop to investigations by a CMA appointed ad hoc committee which were announced last month following a Court of Appeal ruling in favor the capital markets regulator in December last year.

The eight directors involved in the fresh appeal include Alnashir Popat, Omurembe Iyadi, Jinit Shah, Anwara Hajee and Hanif Somji.

Others are Vishnu Dhutia, Eric Bengi and Mukesh Patel.

The eight have been challenging the legality, propriety and constitutionality of the proceedings by the CMA for the last six years but have lost dual appeals at both the High Court and the Court of Appeal.

In their fresh appeal, the directors for instance argue about the lack of access to key documentation regarding the bond program.

This is despite the provision of the documents by the CMA in letters circulated to the directors on May 23, 2016.

Further, the former Imperial Bank Directors have challenged the composition of the ad hoc committee which include board members of the Capital Markets Authority as they fear bias on their part.

At the same time, the directors have lamented the inclusion of specific persons in the committee including Dr. James Mcfie, Anne Erickson and James Ndegwa.

The latter has nevertheless recused himself from the committee and has subsequently left the CMA after the end of a six year stint as Chairman.

In its response to the appeal, the capital markets regulator has termed the director’s course as premature, a delaying tactic and a clever attempt to circumvent the regulator’s mandate.

The CMA ad hoc committee is tasked with probing directors over their role in the issuance of Imperial bank’s corporate bond which preceded the collapse of the lender.

Three days after the close of the bond’s offer on September 17, 2015, the management of the bank disclosed that some directors had sustained financial fraud since 2006 culminating in events which would climax in the placement of the lender in receivership.

Imperial Bank (in Receivership) remains as the only unresolved, collapsed bank with the Kenya Deposit Insurance Corporation (KDIC) having commenced the liquidation of Chase and Charterhouse this week.