CMA fights bid to halt probe into Imperial’s Sh2 billion bond

The Capital Markets Authority (CMA) has accused former Imperial Bank directors (IBL) of using false information to avoid being investigated.

CMA had launched investigations that sought to reveal the collapsed bank's directors did not comply with the relevant regulatory provisions regarding a Sh2 billion public bond the bank issued before it collapsed.

In a petition filed at the High Court, the bank's directors claimed that CMA did not provide them with the facts and evidence that would be used against them by the authority. CMA dismisses the allegation, saying it had clearly advised the bank's directors on the factual basis of the charges made against them, and that it had also provided copies of the evidence it would use.

In a statement to media houses signed by the authority's spokesperson Antony Mwangi, CMA accuses the directors of misleading the court by claiming they were denied a chance to present their evidence.

"The directors have selectively referred to communications exchanged to indicate to the court that they had been denied an opportunity to present their evidence to the authority. On the contrary, the authority has repetitively assured the directors that they will be accorded a chance to make presentations and present their evidence for consideration," the statement reads.

The former directors have also claimed that CMA denied them an opportunity to be represented by their counsel, a fact that CMA denies, saying they have consistently sought to delay and frustrate the administrative process being undertaken by the authority, by refusing to be adequately prepared despite being given several adjournments.

The directors have also filed another suit against the Central Bank and the Kenya Deposit Insurance Corporation (KDIC) at the High Court seeking to quash an attempt to have the collapsed bank liquidated.

In the suit, the directors argue CMA's investigations cannot go on as long as the case has not been determined. CMA contests the argument, saying its investigation can go on since neither the authority nor the bond issues are subject to that specific suit.

The investigations by the full CMA board, once complete, will determine whether the former directors misled the public into investing in the collapsed lender's bond issue.