KCB Bank acquired National Bank of Kenya (NBK) in September 2019 after doing all the necessary works and filling documents that gave it permission to do so.
Less than six months later, the bank has entered into some unlawful schemes at NBK.
The new manager Paul Russo who takes over from the tainted Wilfred Musau has had to contend with a lot of problems, especially the ‘soiled loan book’ at NBK.
It is not easy to wade through the murk that had been created by the now sacked team at NBK led by Mr. Musau and the other sacked Reuben Koech, Musa Adan and Christopher Muga.
Koech and Musau were sacked on Thursday 05-12-2019 for various counts of fraudulent activities with the recent being Fraudulent release of Securities for Non-Performing Borrowers in Exchange of Bribes. Said Borrowers confessed after being cornered by Directorate of Criminal Investigations (DCI) and Ethics and Anti-Corruption Commission (EACC).
Reuben Koech colluded with Eustace Nyaga of Remedial department and released securities belonging to Chris Kisire as a tribal and kickback consideration. This is despite Kisire’s loan being Non-Performing.
Koech had been sacked sometimes back but was reinstated after Deputy President William Ruto intervened. This shows that Mr. Reuben had powerful friends who accepted fraud to go on at NBK.
A recent investigation has also revealed that Reuben Koech, Jeremiah Kendagor, Chris Muiga, Wilfred Musau and Joseph Kering swindled Ksh356 Million from Irregular Bond Trading. This was revealed after Bond Brokers confessed to Security Organs how the theft was executed.
The unscrupulous brokerage firms were cornered, they narrated how they would be instructed by Reuben Koech to offload NBK bonds at extremely discounted book values and put a side the difference to be shared among the mentioned crooks.
There are many fraudulent transactions even touching on KCB Bank’s own flawed due diligence. For example, Musa Adan sold Kencom Sacco an Islamic loan from NBK without such structures existing.
The loan of Ksh1.3 billion was granted but a lot of it went to Kickbacks. Kencom Sacco is not even a financially sound entity as we speak.
Most members have complained that they cannot get loans quick enough like they used to. The houses that the Sacco built are also not affordable. At Ksh30 million shillings, the houses are utterly expensive.
The Central Bank of Kenya has remained silent even as commercial banks continue to run riot; money laundering of NYS and South Sudan’s war proceeds has just passed without any serious charges or punishment on the lenders.
Wilfred Musau recently paid his Ksh35 million loan in cash, question is, where did he get the money? All evidence points to bribes. And KCB accepted this money that the former CEO could”n;t explain where it came from.
Recently, the MD of NBK Paul Russo stated that most of the defaulters in the Non Perfomaing Loans (NPL) book are big corporates.
As stated earlier, the new NBK board has also had to reshuffle a number of control positions in management. They have made changes in human resource change management, operation risk, information technology, corporations, mortgage, and treasury.
COTU Secretary General sitting for National Social Securities Fund (NSSF) was the biggest name to be let go from the board. Though it will be hard trying to pur new wine into the old wineskins, “Board members have to demonstrate the framework they have put in place to ensure the visibility of what is happening in the organisation, and that the risks are acceptable”, Mr. Russo said
However, the errors of past misdeeds will linger for sometime and maybe that’s why KCB decided to retain the chocolate-yellow colour scheme of NBK.
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