CBK al­lows CID to pros­e­cute Fam­ily Bank bosses over NYS Sh1.6b theft

To­biko had di­rected po­lice to get Bank view on the im­pact pros­e­cu­tion would have on bank­ing in­dus­try.

The Star (Kenya) - - Front Page - KAMORE MAINA @kamore­maina

Cen­tral Bank Gov­er­nor Patrick Njoroge has en­dorsed the pros­e­cu­tion of top Fam­ily Bank of­fi­cials over the Sh1.6 bil­lion NYS scan­dal.

Njoroge wants the bank and its se­nior staff pun­ished for fail­ing to re­port to the Fi­nan­cial Reporting Cen­tre the sig­nif­i­cant trans­ac­tions by NYS sus­pects.

SEND A STRONG MES­SAGE

In a let­ter to Direc­torate of Crim­i­nal In­ves­ti­ga­tions boss Ndegwa Muhoro and Di­rec­tor of Pub­lic Prose­cu­tions Ke­ri­ako To­biko dated Au­gust 12, Njoroge said the pros­e­cu­tion of Fam­ily Bank of­fi­cials im­pli­cated in the scam would send a strong mes­sage to bank­ing sec­tor play­ers.

“The pros­e­cu­tion of Fam­ily Bank and other re­lated par­ties in­volved in non–com­pli­ance with reporting is un­likely to have an ad­verse im­pact on the bank. On the con­trary, it will have a pos­i­tive ef­fect on the sec­tor and en­hance ac­count­abil­ity,” he said.

All the NYS cash was paid out in three ac­counts held at Fam­ily Bank, af­ter which they were trans­ferred to other bank ac­counts held by the sus­pects, who have been charged in court.

EX­PERT OPIN­ION SOUGHT

To­biko, who had re­ceived a let­ter from the DCI rec­om­mend­ing the bank and its staff be charged, di­rected the in­ves­ti­ga­tors to seek ex­pert opin­ion on whether by charg­ing the bank there would be a cri­sis in the sec­tor.

He had also di­rected in­ves­ti­ga­tors to dig in on the gen­eral fi­nan­cial sta­tus and sta­bil­ity of Fam­ily Bank.

On Au­gust 12, Njoroge wrote back to the DCI to of­fer the ex­pert opin­ion that en­dorsed the bank’s pros­e­cu­tion.

He said: “The pros­e­cu­tion is un­likely to have an ad­verse im­pact on the bank.”

Af­ter re­ceiv­ing the re­port by Njoroge, in­ves­ti­ga­tors for­warded the find­ings to the DPP, who is sup­posed to ap­prove the pros­e­cu­tion of Mun­yiri and four other bank staff for fail­ure to re­port the NYS to the Fi­nan­cial Reporting Cen­tre or CBK for ac­tion. A month af­ter in­ves­ti­ga­tions were com­pleted, To­biko is yet to ei­ther ap­prove the pros­e­cu­tion of the bank or give fur­ther guide­lines on the probe.

The bank has been fined Sh1 mil­lion for fail­ure to re­port the large trans­ac­tions con­ducted by NYS sus­pects.

The bank also re­tired Mun­yiri and the staff linked to the scan­dal to re­deem its pub­lic im­age.

STAFF SUS­PENDED

Last De­cem­ber, Mun­yiri in a state­ment an­nounced that nine Fam­ily Bank staff were sus­pended fol­low­ing the scan­dal.

“These mem­bers have ex­ited from our em­ploy­ment. It’s hard but nec­es­sary to en­sure strict com­pli­ance with our fidu­ciary in Kenya,” the state­ment read.

Mun­yiri was soon made to leave the bank too.

At the time, Mun­yiri said he was pro­tect­ing the bank’s rep­u­ta­tion.

“The fight against cor­rup­tion is not the prov­ince of few in­sti­tu­tions but a part­ner­ship of many play­ers, in­clud­ing all cit­i­zens and all or­gan­i­sa­tions,” he said.

On Novem­ber 18, the DPP asked Cen­tral Bank to in­ves­ti­gate and ob­tain state­ments from seven Fam­ily Bank of­fi­cials into the NYS theft.

To­biko said the seven will be probed “to de­ter­mine whether they should be charged for fa­cil­i­tat­ing, aid­ing or abet­ting the theft of the amount from the NYS”.

They in­clude branch cus­tomer ser­vice su­per­vi­sor Josephine Waira, op­er­a­tions su­per­vi­sor Martin Ka­giri, re­la­tion­ship man­ager Mel­don Onyango and branch man­ager Robert Nyaga. Oth­ers are the plat­inum ad­min­is­tra­tor, the head of the risk and com­pli­ance de­part­ment and Nancy Njambi.

PEND­ING COURT CASES

Par­lia­ment has since opened in­ves­ti­ga­tions into the scan­dal, de­spite pend­ing court cases touch­ing among oth­ers, for­mer PS Peter Man­giti, for­mer NYS di­rec­tor gen­eral Nel­son Githinji and 22 other sus­pects. For­mer Devo­lu­tion CS Anne Waig­uru last week linked the Of­fice of the Deputy Pres­i­dent Wil­liam Ruto to the ir­reg­u­lar­i­ties by nam­ing Ruto’s aide Farouk Ki­bet.

Waig­uru told the Pub­lic Ac­counts Com­mit­tee that there was com­mu­ni­ca­tion be­tween Ki­bet and a sus­pected mas­ter­mind of the scan­dal – Ben Gethi.

HEZRON NJOROGE

Cen­tral Bank Gov­er­nor Patrick Njoroge (R) be­fore the Na­tional As­sem­bly Pub­lic Ac­counts Com­mit­tee on Au­gust 4/

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