Two long years of CBK’s broken promises, misses and secrecy on Imperial Bank

A depositor at a past demonstration

It was to be a short closure of the bank to allow shareholders to raise funds to recapitalise it and reopen it in a month.

To the surprise of helpless depositors one month turned into two months and then six months and now two years without access to their funds.

This is the story of Imperial Bank today! A story of broken promises by Central Bank of Kenya (CBK), shut down factories, auctioned homes, and death of depositors.

Today, Imperial Bank depositors mark two years since the bank it was placed under receivership by Central Bank of Kenya (CBK) following the discovery of Sh38 billion fraud.


They have been two years of spectacular misses by CBK to resolve the receivership and two years of secrecy on the state of the bank’s financial position.

Depositors and creditors are keeping their fingers crossed hoping that CBK did not miss another opportunity to in the journey to lifting the receivership 14 days ago.

According to a timeline issued by CBK, September 29, 2017 was the last day for investors to submit their expression of interest in taking over the bank.

In June, the High Court extended the receivership by one year to allow CBK to work out a resolution.

So how did this story of epic misses in Imperial Bank receivership begin?

Great expectations

A fortnight after the bank was placed under receivership in October 2015, CBK issued a press statement in which it confidently announced that in spite of the fraud which had watered down the bank capital position, it was still viable and it would be reopened in a month’s time.

“CBK and Kenya Deposit Insurance Corporation (IEBC) met today with the bank’s shareholders and presented a proposal that will enable reopening of the bank and a resumption of operations. The proposal envisages full access to small deposits, and a structured schedule of repayment to large depositors. CBK expressed its expectation that an agreement with shareholders should be reached enabling the bank to reopen in a month’s time,” said CBK in a statement it issued on October 27, 2015.

CBK Governor Patrick Njoroge
CBK Governor Patrick Njoroge

What the banking regulator did not say is that the proposal had actually come from the bank’s non-executive directors; complete with the funding plan that would have included injection of Sh20 billion to shore up the bank’s impaired capital position.

That was to be the first missed target. November 27, 2015, the day the promised one month ended, came and passed but the bank was not opened.

Shifting goal posts

At the heart of the failures to meet promises made to depositors have been numerous incidences of shifting goals posts by CBK and multiple lawsuits the banking sector regulator has filed against shareholders who it accuses of being responsible for the fraud.

In their defense, the shareholders have also filed counter suits seeking to hold CBK and its current and former officials responsible for the fraud.

It is in the shareholders lawsuits that the CBK’s complicity in the fraud including doctoring the bank’s periodical reports to the regulator has come to the public light.

As the cases have dragged on in court, KDIC has been unable to meet CBK’s promises to make partial payments to the large depositors.


Without access to their money, many of the depositors have seen their businesses close down because they could not meet their financial obligations.

John Unsworth, one of the depositors died in September last year because he could not raise money for medical treatment outside the country.


Imperial Bank depositor John Unsworth who died in September last year because he could not access his funds to seek medical care
Imperial Bank depositor John Unsworth who died in September last year because he could not access his funds to seek medical care

As CBK has kept on sending mixed signals on the fate of the bank, in Uganda, where the Bank had a subsidiary, Imperial Bank Uganda, things moved at a very fast pace.

On the same day that CBK handed the bank over to KDIC, Bank of Uganda (BoU) took over the Uganda subsidiary.

Exim bank

However, unlike in Kenya where CBK’s plan for the bank’s recovery became fuzzy following a forensic audit showed that senior staff members of regulator had helped in the theft of depositors funds, BoU moved fast to resolve the statutory management of Imperial bank Uganda.

Exim Bank Tanzania which acquired Imperial Bank Uganda
Exim Bank Tanzania which acquired Imperial Bank Uganda

Within five months into the receivership, BoU Governor Emmanuel Tumusiime-Mutebile announced that all the shareholding held by Imperial Bank Kenya in the Ugandan subsidiary had been acquired by Exim Bank of Tanzania and the bank would be renamed Exim Bank Uganda.

“Bank of Uganda would like to inform the customers of Exim Bank (Uganda) Ltd, formerly Imperial Bank (Uganda) Ltd, and the public that the operations and services of Exim Bank (Uganda) Ltd shall continue normally,” said Tumusiime in a press statement on March 7, 2015.

Stolen funds

It is now 24 months since the bank was placed under receivership. 24 months in which CBK has failed to make recovery of the stolen funds and 24 months in which the suspects who stole or helped in stealing the depositors’ funds continue to roam the streets freely.

Directors of W.E Tilley, a fishing company that admitted to be part of the beneficiaries of the fraud is yet to repay return the over Sh20 billions it had received in undeclared overdrafts. Not even their criminal cases over the fraud been concluded.

At CBK, the top managers who were named as having assisted the former Imperial Bank Group Managing Director Abdulmalek Janmohammed, the key architect of the fraud, to conceal the illegal transactions are still in office with no criminal investigations or charges hanging over them.

Former CBK Governor Prof Njuguna Ndung'u
Former CBK Governor Prof Njuguna Ndung’u

Not even the former CBK Governor, Professor Njuguna Ndung’u who the forensic audit shows that he received bribes from Janmohammed to look the other way, has been charged with abuse of office or interrogated.


Over the time the bank has been under receivership, CBK has maintained a veil of secrecy on the state of affairs of the bank.

Save for CBK and KDIC, no one knows financial position of the bank between depositors, bond holders and shareholders.

Both depositors and shareholders have tried to get the information through the courts but CBK and KDIC have stuck their guns citing the need to keep the information from “wrong hands.”

In the meantime, depositors are getting impatient and have begun to be aggressive in efforts to hold CBK to account on failures to protect their interests in the bank.

Last month, it emerged that the regulator could be staring at a class action suit from depositors if he does not provide them with information showing that he played his role according to the law.

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