HF Group distances itself from insider lending malpractice
The HF Group, formerly Housing Finance, has become the latest financial institution to go on the defensive over claims of irregular insider lending.
This after former Head of Credit Kevin Isika moved to court claiming the lender irregularly issued Sh4.3 billion worth of loans without following due process.
But the bank has come out to protect its integrity, distancing itself from any wrongdoing.
HF Group Chairman Steve Mainda in a statement said the lender, being a regulated entity, follows all the steps especially in signing off insider loans.
“As a regulated entity, HF group has very clear credit policies and an approval matrix approved by the board. Upon review of the cases specifically mentioned, we state that the board is fully satisfied that the approval matrix was and continues to be strictly adhere to,” Mr Mainda said.
In court filings, HF Group Managing Director Frank Ireri is said to have unilaterally approved the loans.
Equatorial Nut Processors (ENP), a company associated with billionaire businessman Peter Munga who sits on the board, is one of the companies listed as having received loans irregularly.
But in a statement the firm rubbished the claims as erroneous.
“In all dealings with HF Group, all the laid down procedures are followed and the necessary declarations made to the relevant stakeholders as per the requirements of the law,” ENP Group Finance Director John Gitogo said.
Mr Gitogo said the firm received a Sh150 million law which was secured as per the law.
Insider lending has become a sticky subject for the banking sector, with the Central Bank of Kenya placing greater responsibility on banks to the limits that could be issued.
Chase Bank was last year forced to restate its books, disclosing large amounts of insider lending.
The ensuing focus saw the lender experience a bank run that led it to be placed under receivership.
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