Seized Kenyan Bank Plans to Raise $98 Million to Start Operating Again

Kenyan lender Imperial Bank plans to raise 10 billion shillings to reopen after it was seized last month by regulators.

Bloomberg reported that the fund, which is equivalent to $98 million, is a part of the proposal by the bank's shareholders to start operating again as soon as possible. The bank could also ask its depositors to hold more than 1.5 million shillings and turn 20 percent of their savings to preference share. They could also ask these depositors to keep their money in the bank for two more years.

Notably, the bank was seized by regulators after it found out that there is internal fraud with the Kenyan lender.   It was seized right after its former managing director Abdulmalek Janmohamed died in September. He is one of the three managers involved in the fraud, according to the lawsuit that was filed against the bank in Nairobi. The other two defendants are acting managing director Naeem Shah and acting deputy managing director James Kaburu. The bank is now trying to recover as much as 34 billion shilling from the defendants.

In a report by Standard Digital, shareholders of the bank revealed that Janmohamed threatened his juniors to siphon 20 billion shillings. According to the shareholders, the late Janmohamed issue order on chits ordering head of Credit Naeem Shah to make disbursements as casual as possible. The former boss also assured them that he'd cover any possible problems from the shady operation.

The Star reported that there are eight Imperial Bank shareholders who want to join the lawsuit against the bank in High Court. The group made the move through Abdulmal Investment Ltd. Since the Central Bank of Kenya suggests that a fresh new capital should be injected in the company if they seek to reopen it, then the eight's participation is crucial.

They are fully paid up shareholders and they deserve to get any surplus funds that come from bank recoveries, according to Abdulmal's director Ghalib Hajee.