Imperial Bank depositors say CBK in cover-up
They say head of Central Bank usurped his powers and acted unlawfully, leading to the collapse of IBL. Call him a lone ranger
Imperial Bank Limited depositors have claimed CBK Governor Patrick Njoroge agreed to a criminal cover-up that led to the collapse of the bank.
They want him to respond in seven days. In a letter addressed to Njoroge and CBK Board chairman Mohamed Nyaoga, the depositors say Njoroge placed the bank in receivership without the lawful authority of the Board.
They say the Governor exercised powers he did not have under the Banking Act and the CBK Act. “At the time when Njoroge placed IBL in receivership, CBK did not have a functional Board of Directors. In the absence of a board, the CBK was not in a position to verify the allegations upon which the Governor based his decisions in closing Imperial,” they say.
The letter says CBK top managers were being bribed and compromised by IBL. It points out that CBK officials after taking their bribes, assured the bank it could continue with its activities and maintain normality.
The depositors say Njoroge derives and enjoys “unusual and extra-statutory powers” from a political network, adding he usurped his powers, abused his office and acted with deliberate and targeted malice to harm them.
They hold him personally liable and have threatened to sue him in his indi- vidual capacity, if he fails to accede to their demands.
In the letter dated November 9, their lawyers say Njoroge at times acts outside and in total neglect of the rules that establish and define his powers. “It is precisely because of that that he has operated as a lone ranger in running the affairs of the bank without a Board of directors,” the letter reads.
The depositors say CBK and its governor specifically targeted certain banks owned by certain minority communities for closure. They accuse the the governor of favouritism and victimisation.
“If the CBK enforced the law and desisted from receiving bribes and other favours from IBL, the chance of the bank failing to meet its obligation would have been totally impossible. The only reason Imperial Bank failed to meet its obligations to their clients and other depositors is because the regulator failed to enforce the law and allowed the bank to be run and be managed like a kiosk,” they say.
The depositors say the lack of a Board at the CBK is a scheme to act with impunity in an environment where the governor is the law. “We’ve no intention of deviating from the real issue, but the shadowy manner the governor dealt with the Eurobond matter and his refusal to give a simple bank balance statement is attest to his total disregard of the law,” they say.
Central Bank Governor Patrick Njoroge, Treasury CS Henry Rotich with CBK Board chairman Mohamed Nyaoga at the CBK 50th anniversary in Nairobi on September 14