This archive report was first published on 18 December 2019.
December 18, 2019, marked a significant turn of events in the saga surrounding Imperial Bank's assets. Amassment Corporation, a US-based financial company, has abandoned its KSh49 billion bid for the assets, citing a lack of cooperation from the Kenya Depositors Insurance Corporation (KDIC).
The decision comes after KDIC revoked the firm's acquisition request, deeming it below par. In its initial offer, Amassment Corporation proposed that KDIC contribute 20% of the corporation's debt to remaining depositors into a special purpose firm, to partially compensate for value declines sustained by loan assets, litigation costs, and losses from non-performing loans.
However, the firm claims that despite complying with all guidelines issued by KDIC, the institution has yet to grant them the green light. In a surprising move, Amassment Corporation dropped its proposal for KDIC to fund its bid, with the institution only required to cover incidental costs of transferring Imperial's assets to a new company.
KDIC argues that only institutions licensed by the Central Bank of Kenya can acquire assets and deposit liabilities, as per the KDI Act 2012. The back-and-forth tussle between the two parties has ultimately led to Amassment Corporation opting out of the bid.
Imperial Bank's troubles began in October 2015, when the Central Bank placed the lender under receivership, following allegations of operating two sets of books and a potential fraud of $449 million, which put depositor funds at risk.
