The Central Bank of Kenya (CBK) has placed Imperial Bank Limited in liquidation, paving way for the sale of its assets.
Imperial Bank was placed under receivership in October 2015, and the Kenya Deposit Insurance Corporation (KDIC) appointed as the receiver.
On June 2 last year, Kenya Commercial Bank (KCB) acquired assets valued at Sh3.2 billion, and assumed liabilities of the same value.
The CBK said the money raised, which represented 37.3 per cent of the total deposits, was to be paid to depositors across four years.
The regulator said 45,700 out of 50,000 depositors had, consequently, accessed their funds in full, leaving out some 4,300.
In September 2020, CBK asked for the appointment of an external auditor to examine Imperial Bank’s books.
The audit report, which was submitted to Imperial Bank’s receiver KDIC on December 7, 2021, recommended that the bank be placed in liquidation, as it had become insolvent.
On December 8, CBK appointed KDIC as the liquidator of Imperial Bank.
The regulator said the decision was arrived at to “protect the interests of Imperial Bank depositors, its creditors and the wider public”.
“KDIC will release information about the liquidation of Imperial Bank Limited and payment of depositors in due course,” said the CBK.
When a company is placed in liquidation, the business is terminated by converting its property or assets into cash or cash equivalents by selling them on the open market. The proceeds raised is thereafter distributed to claimants.
Imperial Bank was shut down by CBK in 2015 after a large-scale fraud running into billions of shillings came to light. Imperial Bank's management and third parties were accused of siphoning cash out of the company.