Tycoon Ashok Doshi demands protection of his Sh1b held in Imperial Bank

Lawyer Francis Kadima, for Businessman Ashok L Doshi, addresses journalists outside the Mombasa High Court after filling a suit against the Central Bank of Kenya and collapsed Imperial Bank. [PHOTO: GIDEON MAUNDU/STANDARD]

His is a story of pain and despair. He was among the more than 5,000 depositors with the collapsed Imperial Bank. But Ashok L Doshi, a businessman from Mombasa, was not an ordinary client.

His account at Imperial Bank had Sh1 billion, which he cannot access. This was revealed yesterday when Ashok L Doshi and his wife Amit A Doshi moved to court to sue Central Bank of Kenya (CBK) and Imperial Bank in a bid to safeguard his money.

According to the couple, they need the money for their retirement.

Ashok, who has vast interests in the steel industry in Mombasa, disclosed this yesterday in an application at the Mombasa High Court seeking to block the CBK and Imperial Bank from interfering and transacting their huge deposits with any other institution.

Illegal Move

He argues that the move to place Imperial Bank under receivership could lead to its liquidation and adds that CBK has proposed to use his money without his permission.

The Ashoks have also taken issue with the move by CBK to pay up to Sh1 million to depositors of the collapsed bank.

They also said CBK has been planning to trade “with our money” and turn it into equity and convert their family’s deposits but had no right to change their contract with Imperial Bank in spite of the receivership.

Last October, Imperial Bank was placed under statutory management for a year due to fraud allegations where 380 million US dollars was unaccounted for.

On December 2, CBK announced an agreement in which Kenya Commercial Bank (KCB) and Diamond Trust Bank (DTB) were to give small depositors a total of 80 million US dollars. Each of the 44,333 small depositors were to get a maximum of only 10,000 US dollars.

Now Ashok argues that this proposal is illegal and claims the money held by the bank when the trouble was detected is sufficient to pay all depositors.

Ashok’s lawyer says his client had deposited “about 1 billion [shillings] in the bank in receivership” as at October 13, 2015, when the bank was placed under receivership which is held in an account or accounts in US and Kenyan currencies. The Ashoks are now living in London and the man is ailing.

The Ashoks filed the application under a certificate of urgency before commercial judge P J Otieno seeking an injunction restraining the two financial institutions from investing or transferring the colossal amount to KCB and DTB or the Kenya Insurance Deposit Corporation (KIDC) pending the hearing and determination of the application.

The two want the court to order CBK to deposit the money into a temporary account or escrow account of a billion shillings held jointly by them and their advocates pending the determination of the application filed yesterday.

Through lawyer Francis Kadima, the Ashoks want the court to order the two financial institutions to file statements of account of the bank liquidation showing liquidity in the deposit account, audit statement published and approved for 2014 and 2015 and other liquid and tangible securities held by the CBK as at October 13, 2015.

“We want the two banks to file in court report of the finding of Financial Forensic Technology International Limited (FTI) Consulting LLP London and their own investigations finding so far pending hearing and determination of this suit,” said Kadima.

The lawyer said his clients held USD 8,715,000.01 both in dollars and local currency accounts with Imperial Bank Ltd by October 13, 2015.

Kadima said the banks are liable to pay both insured amounts and protected deposits forthwith once an institution is put under receivership.

The advocate said the banks have no right in law to decide how to utilise the plaintiffs’ deposits without seeking their permission.

He said the deposits held by Imperial Bank at the time it was put under receivership were sufficient to pay all depositors.

The application is scheduled for hearing on May 2, 2016.