CBK refutes claims that Eurobond proceeds were lost

The Central Bank of Kenya has come out to dispute claims that the proceeds of the Eurobond floated in 2013 were lost after being held in foreign accounts.

In a statement published in the local dailies, CBK said it opened a U.S. dollar account at JP Morgan Chase Bank, New York in June at the request of the national treasury to receive the initial proceeds of the Eurobond.

The Central Bank further says the account was subsequently closed in September 2014,  after 999 million U.S. dollars – equivalent to 88.4 billion shilling was drawn down from the account and transferred to the government’s account.

In response to claims over illegal payments to foreign parties, CBK said it can, on behalf of the government, pay an external party using resources in the government’s foreign currency account.

This comes even as Central Bank Chairman Mohamed Nyaoga moved to court to sue CORD leader Raila Odinga for allegedly tarnishing his name by linking him to the Eurobond saga.

In the case filed in the High Court, Nyaoga is seeking compensation and an order that the CORD leader is restrained from making such further claims.

Through his lawyer Ken Ogeto, Nyaoga says he had no access to and never participated in the Eurobond transaction.

Nyaoga further says he was never a state or public officer during the time of the transactions and did not receive any money from the foreign loan.

Last month, Treasury Cabinet Secretary Henry Rotich announced that that his Ministry has demonstrated how the questioned 140.5 billion shillings Eurobond proceeds were used in the Government books and that no money was lost from the proceeds.

In a full-page advert, the Treasury gave a breakdown of how the funds were used, illustrating what constituted loan repayments and budget financing.

Rotich further assured Foreign Investors that no money went missing and that the money they lent to Kenya was indeed used for the purposes it was intended for.

CORD leader Raila Odinga has since linked top Central Bank officials and eight top civil servants to the Eurobond saga.

He insists that the Jubilee government cannot account for 140 billion shillings from the Eurobond proceeds adding that seven transactions purporting to transfer Eurobond funds into consolidated fund are not supported by credible documents.