The Imperial Effect…Owner’s interests to feel the pinch, CMA suspends bond

Posted on October 13, 2015

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Key business units associated with businessman Alnashir Popat are this afternoon facing the heat of the Central Bank of Kenya’s actions. This follows the decision to put Imperial Bank of Kenya under management and control of the Kenya Deposit Insurance Corporation.

imperial

Pix Courtesy of Daily Nation

A serial entrepreneur, Mr Popat owns majority shareholding in the bank and it is understood his key investments held principal accounts with the lender. The decision to take control of the bank, the regulator says was due to unsafe/unsound business conditions.

Some of the establishment facing the test include The Imran Group and the Capital Club of East Africa, a premium members only joint. The club, is said to hold several accounts at the bank and carries out its supplier and membership finances with it. The club is also hosted at the Imperial Bank headquarters along Westlands road, Nairobi.

The Imran Group on the other hand has several interests in the real estate business as well as PathCare Kenya and Hitech Cables among others.

Sources have however intimated that it was the bank which approached the regulator to intervene after it found out a ‘parallel banking system’ operating within the unit. The source further added that the 12-month control by CBK was to assess and stem the extent of the fraud there in.

Only recently, the bank launched a corporate bond that it aimed at expanding its network and capital base. The Sh2 billion bond offered investors a 15 per cent annual return and capped at Sh1 million minimum investments. The bond was to be listed at the Nairobi Securities Exchange on October 30th. The bond has since been suspended by the Capital Markets Authority

On the other hand, Mr Popat had also announced plans to set up a botique hotel in Nairobi by July next year. Under his Imran Group the Sh2.2 billion establishment was to be built in partnership with a Malaysian based hotel chain.

Across the border, The Bank of Uganda has also moved in on the banks subsidiary; Imperial Bank of Uganda. While noting that the bank will continue with normal operations, but under its control.

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