Court rejects shareholders' plea to join case

Shareholders of collapsed Imperial Bank have been locked out of a suit seeking to recover funds illegally extended to 20 firms.

A ruling delivered yesterday at the High Court in Nairobi also threw out a request to enjoin two firms, Jade Petroleum Group and Adra International Group, as defendants.

Justice Philip Ochieng ruled that the application by the seven shareholders of Imperial Bank lacked merit as the applicant - Central Bank of Kenya (CBK) - was acting in the interests of the collapsed bank and its depositors.

“In the final analysis therefore, I find that the interests of justice demand that the applicants ought not to be enjoined to this suit as co-plaintiffs of the plaintiff, the application is dismissed with costs being awarded to the plaintiff,” Justice Ochieng said.

The shareholders in the dismissed suit are Abdumal Investments Ltd, Imalan Ltd, Reynolds & Company, East Africa Motors Industries, Momentum Holdings Ltd, Rex Motors Ltd and Kenblest Ltd.

Among the pleas they brought to the court was that as directors of Imperial Bank, which had only last year raised Sh2 billion through a corporate bond, they could be held personally liable to the bondholders for any losses.

They had also argued that enjoining them in the suit would bring all matters into one case, thereby avoiding multiplicity of suits while the eventual ruling would be final.

They had also sought to have Jade Petroleum Group and Adra International Group included among the defendants on the strength of the findings of a forensic audit.

CBK successfully opposed the application citing that any orders that could ever be granted would be at the behest of the bank – the complainant in the matter. Justice Ochieng awarded costs to CBK, the plaintiff.