Central Bank of Kenya (CBK) employees have received threats over their involvement in ongoing forensic investigations into last year’s collapse of Imperial Bank, governor Patrick Njoroge told Parliament. Dr Njoroge said there have been several attempts to exert external influence on the direction the investigations should take but the CBK has resisted, choosing instead to unmask individuals behind the bank’s collapse.
Dr Njoroge said his workers have faced intense pressure to move the investigations in a direction, with particular interest in the ongoing forensic audit of the bank’s records by an external auditor.
“There are forces that wanted us to go the other way but we said ‘‘no thank you for your advice’’. My staff have received numerous threats to their lives,” the governor told the Senate Finance Committee chaired by Mandera Senator Billow Kerrow.
“We understand what we have been dealing with. We can assure you that we will do the audit without fear or favour despite the threats,” he said, adding that the Sh39 billion that was looted in the Imperial Bank heist is the new high water mark that makes Goldenberg scandal look like a kids’ game.
A report on findings is expected to be submitted by the end of next month.
Dr Njoroge appeared before senators to provide a status report on the recent collapse of Dubai Bank, Imperial Bank and Chase Bank in succession.
Chase Bank has since been reopened despite being put under receivership and is currently under the management of Kenya Commercial Bank while Dubai Bank and Imperial Bank are under Kenya Deposit Insurance Corporation (KDIC) receivership.
Dr Njoroge said Imperial Bank has been in receivership for the past six months after it went into receivership on October 13, 2015 for widespread manipulation of the IT system to conceal financial malpractices, indication of money laundering and cheque kiting schemes. Initial reports also indicated that Imperial Bank had a huge bad loan book, fictitious deposits, unsecured insider lending and conflict of interest by shareholders and directors.
Dr Njoroge said Imperial Bank directors had failed to co-operate with the CBK on the reopening of the bank through their refusal to deposit Sh10 billion as the first step to reviving the lender.
“They said they wanted to pump in Sh10 billion, but six months down the line they have not deposited a shilling. Imperial Bank requires up to Sh34 billion to be revived,” Dr Njoroge said adding that the lender could have been reopened within a month of closure, but the directors have shown little interest in reopening the lender.
“We had plans to reopen the bank, but without shareholders support, we cannot go far. We have, however, not given up,” he said. Dr Njoroge agreed with the committee that the CBK bank supervision unit may have been complicit in the collapse of the three lenders.
“I agree that we may have been asleep. We needed to have barked much more loudly. We have been doing hard internal thinking on why the banks collapsed yet we had a supervision team,” he concluded.