Imperial T-bills up for sale to pay depositors

Depositors of troubled Imperial Bank under receivership will now be able to be access an additional Sh1.5 million deposits.

This follows a decision by shareholders to give Kenya Depositors Insurance Corporation (KDIC) a green light to liquidate the bank's Treasury bills as part of effort to settle outstanding depositors' cash.

"We have had the depositors at the heart of our fight for the bank. In spite of all the legal proceedings, it is our priority that the depositors are not inconvenienced further," explained Vishnu Dhutia, a representative of one of the shareholders.

Their decision means that KDIC will now move to liquidate Treasury bills held by the bank to enable depositor's access additional cash as it seeks to raise Sh9 billion required for the exercise.

Since Treasury bills are liquid assets, they could easily be converted into cash as opposed to long-term assets and therefore, this will be a reprieve to depositors to immediately access some of their withheld cash.

Their verdict follows the High Court decision through Justice George Odunga to vary its order and allow for payment of depositors from Treasury bill asset and not just funds collected from loan recoveries.

On July 18, lawyer Philip Murgor had on behalf of KDIC requested Justice Odunga to allow for payment from the sale of Treasury bill since there was insufficient money from the loan recovery account.

This latest development reverses an earlier court decision, dated June 29, 2016, in which Odunga had directed that KDIC "shall not dispose of other assets of IBLIR (Imperial Bank in receivership) pending the determination of court proceedings or other orders of this Court."

The shareholders have called on KDIC and CBK to uphold transparency when carrying out their dealing on the bank.