Business / News
Thursday, 30 Mar 2017 17:04 EATdmutua@kenyafreepress.com
The Central Bank of Kenya (CBK) has blocked directors of Chase Bank (IR) from continuing their ownership of the bank that went into receivership nearly a year ago. Chase Bank was a well-performing bank before it was hit by a scandal of insider trading and poor accounting for assets and liabilities.
Since being put under statutory management, the bank has continued to grow, and its shareholders have repeatedly expressed their readiness to infuse additional capital and resume ownership of the bank, but that prospect seems now to have been blocked after CBK invited bids from investors to take over the bank.
In an announcement that came on the same day that CBK extended the appointment of the Kenya Deposit Insurance Corporation (KDIC) as the receiver manager for Chase Bank (IR), the regulator invited interested investors to present an initial Expression of Interest (EOI) to take an equity interest in Chase Bank (IR).
“This announcement commences a formal process of selecting a preferred investor for the Bank, which it is hoped may be concluded within the next six months. Following the receipt and evaluation of EOIs, a shortlist of qualifying investors (“Shortlisted Investors”) will be granted access to a comprehensive confidential data room to develop a formal proposal to acquire Chase Bank (Kenya) Limited,” CBK said in a press release.
“The Shortlisted Investors will be determined in a fair process using appropriate and objective criteria based on, inter alia, regulatory imperatives and prudential guidelines which will ensure a speedy and optimal recovery for depositors, creditors and other stakeholders of Chase Bank (Kenya) Limited, whilst also mindful of seeking to preserve and develop a sound and innovative banking system in Kenya,” the bank said, giving a deadline of April 21 for the EOIs to be received.
Chase Bank was a rapidly developing commercial bank, operating through 62 branches. CBK placed it under receivership on April 7, 2016 to forestall a run following depositors’ concerns that the bank was about to collapse.
The bank re-opened with reduced activities on April 27, 2016, managed by KCB Bank Kenya Limited, and it has continued to operate and grow ever since. Today, CBK extended the appointment of KIDC as the official receivers for six months from April 7, 2017.
The initial appointment of April 7, 2016 was for 12 months. The statement said that progress had been made towards the receivership of the bank’s resolution, with the aim of safeguarding the interest of the banks customers.