Imperial Bank’s shareholders, depositors and the Central Bank of Kenya are divided over a recent ruling by the High Court that if implemented will have far-reaching consequences on how receiverships will be handled.

Last week, High Court Judge George Odunga ordered CBK and the Kenya Deposit Insurance Corporation (KDIC) to consider proposals for reviving the collapsed bank.

But CBK says this was not part of the ruling, with a new set of shareholders now moving to court, further complicating the prospects of a deal.

A lobby group of 50 depositors not associated with the original Imperial Bank depositors say they intend to file a lawsuit demanding the release of information relating to the collapsed bank and all funds to depositors by KDIC.

And the Imperial Bank lobby group distanced itself from this new group.

“We have not been approached by the said depositors and do not endorse their approach. Our lobby group represents the highest number of depositors. We still strongly believe that CBK has no intentions of liquidating IBL and have not seen any evidence to suggest that. If the situation changes, we will re-assess and act accordingly,” said the lobby’s chairman Mahmood Khambiye, adding that from the previous communication from CBK, it seems to have intentions of paying depositors 40 per cent of their deposits but was stopped due to lawsuits filed by shareholders and others.

The ruling of the High Court touching on the proposal to reopen collapsed bank has also become a sticky issue with all the sides claiming victory and interpreting the ruling to their own benefit. For instance, after the ruling, CBK said in a statement that the court had found that it had at all times considered the proposals put forward by the shareholders, and the court was satisfied that the shareholders were given reasons why their proposals were unacceptable.

The same position has been taken by the depositors who said that the ruling effectively determined that the directors and shareholders of the collapsed lender were to be excluded from participating in the firm when placed under receivership.

“After consulting the relevant laws as well as the judgment delivered by Justice Odunga we determined that KDIC has the power to transfer assets and liabilities,” Mr Khambiye said.

The collapsed lender’s shareholders say that the High Court made certain orders in their favour but this has been distorted by CBK through intentional omissions.

“The communication from CBK omits any reference to key parts of the judicial review ruling and, in particular, the content of the orders. It distorts the nature of the ruling, suggesting that our application was unsuccessful and that CBK and KDIC are now free to continue their own course of action in respect of the Imperial Bank without restraint. This is not true,” the shareholders argue.

Lawyers who have no interest in the case say that the ruling is positive and, perhaps not surprisingly, the CBK/KDIC communications are not reflective of the substance.

“The judge noted that CBK had considered the shareholders’ proposals as evidenced by meetings/consultations/the submissions of the parties and had given written reasons for rejecting them so the decision should be upheld,” a lawyer said.