In a growing economy such as Kenya’s, it’s normal to believe that anything associated with one of the leading banks in the region will do well financially, that’s not the case with KCB Bank Kenya ltd’s Kencom Sacco that was started back in July 1994.
Of course Kencom Sacco has mebbers drawn from other two banks namely, National Bank of Kenya (NBK) and Cooperative Bank of Kenya.
It is said that members wishes to have loan facilities without providing tangible security as is a requirement by banks that gave birth to KCB’s in-house Sacco.
It’s shocking to note that Kencom is one Sacco that clearly defines what mismanagement and corruption is all about. The graft and impunity in Kencom Sacco is on another level. Members money are stuck inside the Sacco, no dividends have been paid for a long time now neither do they approve loans. For instance, you can save as high as close to one million but when you apply for say sh1 million or slightly above, you will wait even beyond one year as the loan remain unprocessed.
Kencom Sacco takes more than a half a year to pay off members who no longer work with KCB. Members of the Sacco believes that whatever is happening at Kencom Sacco is a collusion amongst Kencom Sacco managers, their counterparts at KCB, NBK and Coop banks, and senior officers from Sacco Societies Regulatory Authority (SASRA). Any attempts to inquire about this foul play from KCB, NBK, Co-op, SASRA, and Kencom Sacco goes unanswered.
It’s important to note that KCB and Kencom only has separate board members, the rest remains same, meaning Kencom Sacco is a fully owned subsidiary of KCB being a society for KCB Group staff.
Recently when the Sacco wanted to do a development project, real estate, which would eventually be sold out to its members, KCB Bank couldn’t finance it because it qualify as insider lending. This prompted one of the managers Musa Adan to market Kencom Sacco’s loan to NBK fraudulent board where a sh1.3 Billion loan was mischievously granted as a bonafide longterm murabahah (whatever that means) financing. KCB Bank is not an islamic entity but still Musa Adan managed to classify Kencom Sacco’s loan as an Islamic product.
Kencom Sacco was in the end financed by NBK and they completed the project. Due to too many kick-backs allegedly paid to Musa Adan, Wilfred Musau and Mohamed Hassan, the sh1.3 Billion loan remained unpaid and hidden under the opaqueness Islamic Banking Portfolio.
When the KCB Group acquired NBK, Paul Russo the new MD of NBK opted to establish how the SACCO loan was not paid despite all the developed units which are sold as high as sh30 million being taken up only to find out that Musa Adan, Wilfred Musau, Hassan Mohammed, Stephen Gathogo, Sam Mundia, Joseph Kering and Eustace Nyaga were allegedly gifted with house units to frustrate Remedial Measures.
It is said that the cost of Kencom Sacco houses were intentionally hiked to favour a senior politician who has been shielding the corrupt individuals at NBK. All the earlier sacked individuals at NBK were tactfully retained.
As if the above issues are not enough, there has been more dirty and filthy tricks at NBK, another bank whose staff are members of the Kencom Sacco. One such trick is the accumulation of written-off loans that has benefitted corrupt individuals at NBK.
This has attracted the attention of the new NBK MD Paul Russo who has promised to drain the swamp. Acting on fear of being arrested, embarrassed, taken to court and possibly taken to jail, former Managing Director, CEO & Executive Director of National Bank of Kenya Wilfred Musau recently paid off his Ksh35 Million Loan in cash.
The rot at the struggling lender is disturbing the new management. The Russo-led team is keen on fixing the bank’s poor non-performing loans.
While other lenders opt to hire loan recovery firms to pursue the borrower at a discount or attach property to recover funds, NBK during the tenure of Musau is reported to have engaged its clients directly to reach a “gentleman’s agreement”, in this kind of agreement, the defaulter could agree to pay only part of the loan recoverable and be allowed to refinance and continue with the relationship with the bank after washing off the legacy debt.
It is said Reuben Koech, Chris Muiga, Musa Adan and their proxies, colleagues with the blessing of the former NBK MD Wilfred Musau would go to some of the big clients to demand kickbacks to effect the write-offs.
“Reuben Koech and Wilfred Musau were sacked on Thursday of December 5, 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 DCI & EACC” a source revealed.
“Reuben Koech colluded with Eustace Nyaga of remedial department and released securities belonging to Chris Kisire as a tribal and kick back consideration. This is despite Kisire’s loan being Non-Performing” a source privy to the happenings said
This bad habit cost the bank bad loans, estimated at Sh32 billion. The share of the bank’s Non-Performing Loans (NPLs) ratio to total loans stood at 68.8% in the nine months ended September 30 compared to 47% in December last year.
It’s reported that Reuben Koech, Wilfred Musau, Musa Adan and Chris Muiga were recently fired and are being processed to be charged in court.
via 254 news
Kenyan Business Feed is the top Kenyan Business Blog. We share news from Kenya and across the region. To contact us with any alert, please email us to [email protected]