Former Imperial Bank director Christopher Diaz has broken ranks with eight other directors, who are blocking CMA from investigating them. Photo | Courtesy

A director at Imperial Bank of Kenya has broken ranks with his colleagues and faced the Capital Markets Authority over his role in issuing the Sh2 billion bond lost when the lender collapsed.

Mr Christopher Diaz has broken ranks with eight other directors who are blocking the regulator from probing them.

He and appeared before the CMA board and has been absolved for wrong doing as he was newly appointed as an independent and non-executive board member when the bond raising process was already underway.

“A former independent and non-executive board member, who served between 1 February 2015 and 13 October 2015, attended the enforcement hearings before an Ad Hoc Committee of the CMA Board to respond to the allegations,” CMA said in a notice.

Read also: CMA slaps Sh15 million fine on Real People board for financial fraud

“The CMA board did not take any enforcement action against Mr Diaz who had been newly appointed as an independent and non-executive board member when the bond raising process was already underway,” CMA said.

The other former Imperial Bank Ltd board members declined to appear before the Ad Hoc committee and filed an appeal at the Capital Markets Tribunal.

They include Alnasir Popat, Omurembe Iyadi, Jinit Shah, Anwar Hajee, Hanif Somji, Vishnu Dhutia, Eric Bangi, and Mukesh Patel.

Imperial Bank directors have lost cases in the Appeals and Supreme Court to stop the regulator and have now moved to the Capital Markets Tribunal.

The courts maintained that CMA has the right to investigate and punish the directors but must delegate the process to an independent committee for fairness so as not to be the judge jury and executioner.

Read also: Imperial Bank board in the soup over Sh2bn bond issue

In January CMA set up an ad hoc committee akin to the ones used to investigate malpractices at Real People and Kenol Kobil, entities which have been on the regulators radar in recent months.

The Imperial Bank ad hoc Committee included: Thomas Kibua, CMA Board Member; John Birech, CMA Board Member; Retired Chief Justice Willy Mutunga; James McFie; Anne Eriksson; and Patricia Kiwanuka.

The directors of the failed Imperial Bank are facing financial penalties as well as being backlisted from holding the position in any listed company if they are found guilty by CMA.

If found guilty, the directors face disqualification from appointment as a director of a listed company or licensed or approved person including, a securities exchange, they may also be slapped by fines of up to two times the amount of the benefit accruing to the directors by reason of the breach.

Giving false information to the CMA may also attract additional financial penalties in such amounts as may be deemed fit by the regulator.

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