Kenyan multimillionaire Ashok Doshi and his wife Amit have sued the Central Bank of Kenya (CBK) and Imperial Bank in a bid to recover Sh1 billion ($8.8 million) in deposits held in the latter.
The move comes six years after the bank’s collapse, which was followed by a liquidation process that has not yet concluded to this day.
Following several fraud allegations to the tune of $380 million, Imperial Bank Limited was placed under receivership in October 2015, with the Kenyan Deposit Insurance Corporation (KDIC) appointed as the receiver.
Six years after the fall, the Central Bank of Kenya finally approved the liquidation of the bank in 2021, paving the way for the sale of its assets, the settlement of claims and other statutory actions.
Before the declaration, during the period under review, the CBK acquired the assets of the defunct bank valued at KSh3.2 billion ($28.3 million). According to the CBK, the net proceeds of the deal, which represents about 37.3 percent of the total deposits, were used to settle the claims of 45,000 small depositors, which implies that large depositors like Doshi and his wife have yet to be settled.
In a bid to recover his deposits in full, the Mombasa-based tycoon sought legal redress, asking the court to direct the relevant authorities to pay his dues.
The tycoon and his wife argued that the lender consented to pay them after they sued the bank three months after it was placed under receivership on July 15, 2016.
The couple’s legal representative, Willis Oluga, told Business Daily: “The consent is still binding to date and has never been reviewed, varied or set aside.”
Oluga also added that: “The appointment of KDIC as the liquidator has the effect of defeating the consent recorded in this suit since the legal status of Imperial Bank has changed from being in receivership to being in liquidation and the consent is no longer binding to Imperial Bank.”
In short, the businessman and his wife asked the court to orders the KDIC and CBK to deposit $7.2 million in a joint account as security for any decree that could be passed by the court.
They also demanded that the CBK release Imperial Bank’s statement of accounts and other vital financial information regarding the lender’s liquidity.
Doshi is the owner of Doshi Group, a provider of steel, electrical, water, hardware and telecom solutions.
The case will be heard on Jan. 10, 2022.
Meanwhile, a high court in the country has temporarily halted the lender’s liquidation process. The court directed the CBK and KDIC to suspend payments to depositors, pending the full hearing of the case.