Uganda Puts Imperial Bank’s Stake in Kampala Unit on Sale

Ugandan authorities have put troubled Imperial Bank’s 51 per cent stake in the lender’s Kampala subsidiary on sale in a move that signals a possible direction Kenyan regulators might take in resolving the crisis that led to the bank’s closure two weeks ago.
Central Bank of Kenya (CBK) governor Patrick Njoroge made the revelation even as he acknowledged that the regulator’s own supervision department officials are among the key players under investigation over the sudden fall of the mid-tier lender.

“In Uganda, they are trying to sell the 51 per cent shareholding of Imperial Bank Kenya to a particular investor and to resolve the bank’s problems that way,” said Dr Njoroge.
The decision by the Ugandan authorities to force a sale of Imperial Bank Kenya’s stake signals that Kenya could also consider having a substantial shareholding of the bank sold to other lenders

Such a move should restore some degree of confidence among the savers and help stem the anticipated tide of massive withdrawals when the bank is reopened.

In Kenya, Dr Njoroge said, the forensic auditors are also investigating whether loans may have been issued irregularly or financial numbers fudged. He confirmed that a US firm FTI Consulting had been appointed to investigate alleged irregularities and malpractices in the bank that was closed early last week.

“What we have right now are allegations. Nothing has been verified and we cannot go into specifics about something we are not sure of until the forensic audit is completed,” Dr Njoroge said when journalists demanded details of the “malpractices” at the bank.

Force a sale
The Bank of Uganda’s decision to force a sale of the Kenyan bank’s stake in the Kampala unit is a solution that may come in handy given the damage that the receivership has done to the Imperial Bank brand.

Apart from Imperial Bank of Kenya, the other share holder in the troubled bank is The Mukwano Group.

Commenting on the sale, the director communications Bank of Uganda, Ms Christine Alupo, said: “Our interest is to see that shares held by Imperial Bank Kenya, the majority shareholder are sold to a deep pocketed solid financial institution that will be responsible for appointing a new board of directors that will take on the duty of controlling the affairs of the bank. At that point, the Bank of Uganda will exit. This is our key objective- that any transition is made with seamless continuation of services to customers.”
She, however, added: “At this stage, I cannot confirm which institution it will be.”


October 23rd, 2015 | by

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