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