A legal battle between a wealthy businessman and Kenya’s central bank has come to an end, but the story behind it is far from over. The case, which has been making headlines, revolves around a significant sum of money and the fate of a bank.
Billionaire’s Battle for Sh1 Billion:
Businessman Ashok Doshi, a tycoon from Mombasa, had sued the Central Bank of Kenya (CBK) over the liquidation of Imperial Bank Ltd. Doshi’s claim? He wanted the CBK to repay his deposits, a staggering amount of more than Sh1 billion, which he held in the now-collapsed bank.
In a surprising turn of events, the case was withdrawn by mutual consent, leaving many wondering what led to this decision. The High Court ruled that the case was withdrawn without any orders regarding costs, but the underlying issues remain intriguing.
Controversial Appointment or Legal Procedure?
Doshi’s main argument was centered around the appointment of the Kenya Deposit Insurance Corporation (KDIC) as the liquidator of Imperial Bank. He claimed that this appointment was made illegally and irregularly, as the bank was no longer in receivership when the decision was taken.
According to Doshi’s interpretation of the Kenya Deposit Insurance (KDI) Act, Section 53 (2), the CBK can only appoint a liquidator during the receivership period. However, the CBK appointed KDIC as the liquidator on December 8, 2021, well after the receivership had ended, according to Doshi’s legal team.
But here’s where it gets controversial: The CBK argued that the receivership had not expired and that they had received a recommendation from KDIC to place the bank under liquidation just a day before the appointment. This raises questions about the timing and the validity of the appointment process.
Legal Maneuvers and Strategic Moves:
Doshi’s affidavit reveals his concern that the CBK was rushing the liquidation process to avoid scrutiny over the legality of the liquidator’s appointment. He noted that the CBK quickly published notices in newspapers, indicating their intention to pay out deposits to protected depositors, which he saw as a strategic move.
The case highlights the complexities of banking regulations and the potential impact on depositors when banks fail. It also brings to light the power dynamics between regulators and depositors in such situations.
With the case withdrawn, one might wonder if the truth behind the appointment of KDIC as liquidator will ever be fully revealed. Was it a legal maneuver or a controversial decision? The public may never know the full story, but it certainly sparks curiosity and debate.