Im­pe­rial Bank de­pos­i­tors say CBK in cover-up

They say head of Cen­tral Bank usurped his pow­ers and acted un­law­fully, lead­ing to the col­lapse of IBL. Call him a lone ranger

The Star (Kenya) - - Politics General - SU­SAN MUHINDI @TheS­tarKenya

Im­pe­rial Bank Lim­ited de­pos­i­tors have claimed CBK Gov­er­nor Pa­trick Njoroge agreed to a crim­i­nal cover-up that led to the col­lapse of the bank.

They want him to re­spond in seven days. In a let­ter ad­dressed to Njoroge and CBK Board chair­man Mo­hamed Nyaoga, the de­pos­i­tors say Njoroge placed the bank in re­ceiver­ship with­out the law­ful au­thor­ity of the Board.

They say the Gov­er­nor ex­er­cised pow­ers he did not have un­der the Bank­ing Act and the CBK Act. “At the time when Njoroge placed IBL in re­ceiver­ship, CBK did not have a func­tional Board of Di­rec­tors. In the ab­sence of a board, the CBK was not in a po­si­tion to ver­ify the al­le­ga­tions upon which the Gov­er­nor based his de­ci­sions in clos­ing Im­pe­rial,” they say.

The let­ter says CBK top man­agers were be­ing bribed and com­pro­mised by IBL. It points out that CBK of­fi­cials af­ter tak­ing their bribes, as­sured the bank it could con­tinue with its ac­tiv­i­ties and main­tain nor­mal­ity.

The de­pos­i­tors say Njoroge de­rives and en­joys “un­usual and ex­tra-statu­tory pow­ers” from a po­lit­i­cal net­work, adding he usurped his pow­ers, abused his of­fice and acted with de­lib­er­ate and tar­geted mal­ice to harm them.

They hold him per­son­ally li­able and have threat­ened to sue him in his indi- vid­ual ca­pac­ity, if he fails to ac­cede to their de­mands.

In the let­ter dated No­vem­ber 9, their lawyers say Njoroge at times acts out­side and in to­tal ne­glect of the rules that estab­lish and de­fine his pow­ers. “It is pre­cisely be­cause of that that he has op­er­ated as a lone ranger in run­ning the af­fairs of the bank with­out a Board of di­rec­tors,” the let­ter reads.

The de­pos­i­tors say CBK and its gov­er­nor specif­i­cally tar­geted cer­tain banks owned by cer­tain mi­nor­ity com­mu­ni­ties for clo­sure. They ac­cuse the the gov­er­nor of favouritism and vic­tim­i­sa­tion.

“If the CBK en­forced the law and de­sisted from re­ceiv­ing bribes and other favours from IBL, the chance of the bank fail­ing to meet its obli­ga­tion would have been to­tally im­pos­si­ble. The only rea­son Im­pe­rial Bank failed to meet its obli­ga­tions to their clients and other de­pos­i­tors is be­cause the reg­u­la­tor failed to en­force the law and al­lowed the bank to be run and be man­aged like a kiosk,” they say.

The de­pos­i­tors say the lack of a Board at the CBK is a scheme to act with im­punity in an en­vi­ron­ment where the gov­er­nor is the law. “We’ve no in­ten­tion of de­vi­at­ing from the real is­sue, but the shad­owy man­ner the gov­er­nor dealt with the Eurobond mat­ter and his re­fusal to give a sim­ple bank bal­ance state­ment is at­test to his to­tal dis­re­gard of the law,” they say.


Cen­tral Bank Gov­er­nor Pa­trick Njoroge, Trea­sury CS Henry Rotich with CBK Board chair­man Mo­hamed Nyaoga at the CBK 50th an­niver­sary in Nairobi on Sep­tem­ber 14

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