The directors and shareholders of Imperial Bank formed Downstream Investments Limited and used it to apply for a licence to run a subsidiary of Dubai Islamic Bank (DIB) in Kenya. This is according to fresh filings in the court battle between the Kenya Deposit Insurance Corporation (KDIC), the bank’s receiver manager, and its owners.
The owners of collapsed Imperial Bank registered the company, Downstream Investments Limited, which they then used to acquire a stake in Dubai Islamic Bank and to apply for a banking licence to open a Kenyan subsidiary of the Middle East lender, revealed receiver managers.
Mohamud Ahmed, the receiver manager, says in court papers that DIB Kenya and the collapsed Imperial Bank appear to be interlinked as they share the same staff, registered offices and ownership.
The KIDC reckons that DIB’s Kenyan arm is registered to Downstream Investments which is owned by nine companies, eight of which owned 100 per cent of Imperial Bank.
The KDIC made the claims in reply to a suit two companies — Sandview Properties and Upperview Properties — owned by Imperial Bank’s deceased former managing director Abdulmalek Janmohammed and some of the bank’s directors, including Alnashir Popat, have filed against the fallen bank and its receivers.
Imperial Bank’s shareholders, however, insist that the claims are an attempt by the KDIC to tarnish their image by making all their business transactions appear suspicious.
“The rent being charged by Sandview to DIB Kenya is charged on the same floors occupied by Imperial Bank. Downstream Investments owns DIB Kenya and the shareholders of Downstream are Imaran Limited, Reynold & Company, East Africa Motor Industries, Momentum Holdings, Abdulmal Investments, Kenblest Limited, Rex Motors, Janco Investments and Weywater Limited,” Mr Ahmed says.
Sandview has sued Imperial Bank seeking to recover its books of accounts, records and electronic tax registers which were seized by the KDIC. The materials confiscated were inside Imperial Bank’s Upper Hill branch, which sits in the building owned by Sandview.
But the KDIC has refused to release the documents arguing that the three companies tied to the building — Imperial Bank, DIB Kenya and Sandview — are linked to the fallen bank’s Sh34 billion scandal.
Imperial Bank is owned by Downstream Investments — which are in turn owned by Imaran Limited, Reynold & Company, East Africa Motor Industries, Momentum Holdings, Abdulmal Investments, Kenblest Limited, Rex Motors and Janco Investments.
These companies are co-owned by Mr Popat, former Imperial Bank chairman, Mr Janmohammed, Hanif Amirali Somji, Vishnu Dhutia, Mukesh Kumar Patel, Anwar Hajee and Jinit Shah.
The late Janmohammed, who the KDIC believes ran a Sh34 billion embezzlement scheme at Imperial Bank over 13 years, owned Janco Investments.