KDIC accuses Imperial Bank lawyers of conflict of interest

The legal tussle in getting a way forward for Imperial bank has taken a new twist, with the Kenya Deposit Insurance Fund (KDIC) accusing lawyers representing shareholders and directors of conflict of interest.

In a suit filed by lawyer Phillip Murgor, KDIC is seeking the removal of the legal counsel comprised of Coulson Harney, Ahmednassir AbdiKadir and Co .Advocates and Muriu Mungai and Co. Advocates.

Mr Murgor argues that the participation of the three firms in the proceedings is greatly prejudicial to Imperial Bank adding that the three firms are conflicted and cannot therefore act for the defendants.

The suit claims that Coulson Harney undertook several assignment including a secret “Project Crown” which involved the restructuring of Imperial Bank to create new a new holding company known as Imperial Securities Ltd.

KDIC has further gone on to claim that the Ahmednassir AbdiKadir and Co .Advocates acted for some of the defendants between the year 2006 and 2012 a period in which he claims massive fraud occurred and therefore can’t act for the defendants.

The suit brings to a boil the legal hurdle that has hampered the recovery of Imperial Bank, leading to the extension of the receivership period by a further six months.

KDIC is seeking to recover Sh45 billion from the bank’s shareholders, who it accuses of facilitating the decade long fraud that led to the loss of Sh38 billion.

It is also seeking an order to compel the bank directors and shareholders to pay back Sh2.7 billion, allegedly given to them fraudulently as dividends.

The Central Bank of Kenya and KDIC decided to go after the directors of the bank on grounds they engaged in fraud and breached the fiduciary duty to depositor.