CBK boss spared over Imperial Bank hearing
Wednesday, June 17, 2020 7:00
By SAM KIPLAGAT
Central Bank of Kenya (CBK) Governor Patrick Njoroge has been spared the agony of appearing before the East African Court of Justice to shed light on fraudulent activities at Imperial Bank Limited (IBL), which led to the collapse of the lender in 2015.
The Bench of three judges of Principal Judge Monica Mugenyi, Audace Ngiye and Charles Nyachae ruled that it saw no reason to compel Dr Njoroge to appear as a witness at the Arusha-based court because he was not the custodian of the documents sought to be produced.
In the case, Pontrilas Investment Limited, a depositor at IBL, has accused CBK of laxity or possible involvement of its officials in the Imperial Bank fraud.
The depositor wanted Dr Njoroge called to produce documents and shed light on the regulatory role played by CBK and why the banking regulator failed to discharge its role as required.
The CBK placed the bank under receivership in October 2015 after the board of the mid-sized lender alerted it about alleged malpractices.
Former executives of the collapsed bank have been charged with involvement in a conspiracy to defraud the institution and depositors of Sh29 billion.
The judges said some of the documents sought from the Governor by Pontrilas Investment Limited were in the custody of CBK’s supervisory department, which has competent officers to bring them to court.
The judges also faulted the company for failing to state with specificity, the documents they wanted Dr Njoroge to produce.
“In our view, such a broad categorisation of the documents depicts non-knowledge of the specific documents required, lending credence to the possibility of a fishing expedition,” the court said.
Pontrilas said the CBK had failed to meet its promise of recovering lost deposits, arguing it was doubtful about its savings.
The firm argued that Dr Njoroge’s presence would enable the judges understand the issues before court in relation to its regulatory functions and failures.
In June 2016, Imperial Bank directors sensationally claimed that senior CBK officials, who were complicit in fraudulent transactions, had become an obstacle to the bank’s restructuring and revival as part of a cover-up.
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