Shelter Afrique boss quits after implication in financial malpractice

Shelter Afrique boss quits after implication in financial malpractice

Embattled Shelter Afrique Managing Director James Mugerwa has resigned, just a day after the board adopted a report that put him at the center of irregular lending practices.

Femi Adewole has been appointed acting managing director pending recruitment of a new MD.

In a statement Shelter Afrique board Chairman Jean Paul Missi did not give the exact reason for his exit only adding Mr Mugerwa had decided to pursue other interests.

“The Board of Shelter-Afrique has amicably accepted the resignation of Mr James Mugerwa from the position of Managing Director with effect from 1st February 2017. Mr Mugerwa offered to resign in order to pursue other interests. The Board wishes Mr Mugerwa every success in his future endeavors,” Mr Missi said.

The outgoing MD joined the financier in 2014.

Trouble at the housing lender emerged in January with revelations that at least 59 percent of its Sh24.63 billion loan book was classified as non-performing by February.

A further audit of its operations found that Shelter Afrique management had been restructuring overdue loans.

This was done by deferring the loans and making them appear as well performing loans, move that covered up for the growing level of toxic loans.

The Deloitte forensic audit also found that the lender had been borrowing to pay debt rather than finance new investments with all fingers pointed at the outgoing MD.

At the Shelter Afrique extraordinary general meeting held in Nairobi on Tuesday, shareholders approved the recapitalization of the business.

“A resolution to approve the bridge financing from the African Development Bank was also unanimously adopted, it is expected that an immediate transfer of $8.2 million (Sh851 million) will be made and a subsequent line of $20 million (Sh2 billion) will follow to shore up Shelter Afrique in the short term” reads a communiqué from the lender.

The forensic report that was adopted by the board, proposed disciplinary action be taken against Mr Mugerwa for his role and conflict of interest.

Shelter Afrique is owned by 44 African Countries, with Kenya owning a 10.6 percent stake.

In the management shakeup, Oumar Diop steps in as the acting deputy MD while Vipya Harawa retains his positions as Director of Legal, Risk and Compliance.

Tags:

Real Estate Shelter Afrique Housing business banking financing cash strapped Femi Adewole insider lending irregular lending James Mugerwa Jean Paul Missi Oumar Diop pan african lender toxic loans Vipya Harawa

Want to send us a story? Submit on Wananchi Reporting on the Citizen Digital App or Send an email to wananchi@royalmedia.co.ke or Send an SMS to 25170 or WhatsApp on 0743570000

Leave a Comment

Comments

No comments yet.

latest stories