The Capital Markets Authority has been granted permission by the Court of appeal to carry on with investigations on former directors of Imperial Bank. The decision by the appellate judges has reversed a High Court ruling that stopped CMA from interrogating the bank’s directors.
CMA launched administrative proceedings against the former board members after the bank was placed under receivership due to fraudulent transactions and funds mismanagement by top management. The directors under investigation are; Alnashir Popat, Omurembe Iyadi, Jinit Shah, Anwar Hajee, Hanif Somji, Vishnu Dhutia, Eric Bengi, Christopher Diaz, and Mukesh Patel.
The markets regulator accused the board of failing in providing oversight over the management of Imperial bank. A probe into the collapsed lender revealed that the late Managing Director of the bank, Abdulmalek Janmohamed, had been engaging in illegal disbursements of large sums of money and other fraudulent actions for many years under the watch of the board members.
In June 2016, Imperial Bank directors moved to the High Court and won the case stopping CMA from investigating them. The leaders argued that CMA was unfairly targeting them.
The Capital Markets Authority appealed the ruling at the Court of Appeal. Justices Erastus Githinji, Daniel Musinga, and Otieno Odek overturned the High Court’s decision barring CMA from interrogating the former board members of Imperial Bank.
“We establish that the appellant (CMA), in issuing the ‘Notice to Show Cause’ to the respondents (Imperial Bank directors), was acting within its statutory mandate….the appellant shall be at liberty to continue with the administrative proceedings that it had commenced against the respondents,” read part of the ruling by the Court of appeal.
