Former National Bank officials banned, fined by CMA


Former National Bank Managing Director Munhir Sheikh. PHOTO| COURTESY
Former National Bank Managing Director Munhir Sheikh. PHOTO| COURTESY

In Summary

  • Former National Bank Managing Director Munhir Sheikh has been banned from taking up any job in any listed firm.
  • Munir and five other officials were found culpable by the regulator of embezzling funds and misrepresentation of the bank’s books of accounts in the 2015 financial period.
  • The former MD was also fined Ksh.5 million by the Capital Markets Authority.

Former National Bank Managing Director Munhir Sheikh has been banned from taking up any job in any listed firm.

Munir and five other officials were found culpable by the regulator of embezzling funds and misrepresentation of the bank’s books of accounts in the 2015 financial period.

“The misrepresentation of financial statements was occasioned by premature recognition of sale of assets amounting to Ksh.800 Million and under provisioning of loan amounts and wrongful recognition of interest income leading to the overstatement of profit in the respective periods,” said Capital Markets Authority.

Those accused alongside Munir are George Jaba (Former Chief Credit Officer), Chris Kisire (Former Chief Finance Officer), Wycliffe Kivunira (who acted as Chief Finance officer) Solomon Alubala (Former Head of Treasury). Others are Boniface Biko (Former Director Corporate and Institutional Banking) and Dennis Chumbe (Former Relationship Manager Business Banking).

The former MD was also fined Ksh.5 million by the regulator. Mr Alubala was however hard hit after he was fined Ksh.104.8 million, twice the amount the regulator says he embezzled.

Alubala and Kisire have also been recommended for criminal probe to the Director of Public Prosecutions. The two have also been disqualified from any quoted firms for 10 and 3 years respectively.

“The alleged embezzlement of funds was investigated in connection with a deposit mobilization program where commissions were paid to private agents for deposits placed by Government agencies in the normal course of business,” said the regulator

In its findings, CMA also says it established that up to ninety percent of the commissions paid to the private agents may have subsequently been transferred back to the accused officials.

Kivunira and Jaba were also fined Ksh 1 million each for misrepresentation of financial statements and failure to relay correct information to the board respectively.

National Bank had in 2015 published unaudited financial statements indicating a profit of Kshs1.7 billion for the quarter ended 30 June 2015 and Kshs2.2 billion for the quarter ended 30 September 2015. The lender subsequently reported a loss of Kshs1.2 Billion in for the full year ending December 31, 2015.

This triggered the alarm bells into the fudged numbers and an embezzlement scheme that saw over Ksh1 billion siphoned from the lender.

Biko and Chumbe were however spared sanctions by the regulator following administrative hearings.

CMA however said that the banks board had taken remedial measures including a review of the risk management and credit policies as well as escalation of noted fraudulent activities to the Banking Fraud Investigation Unit.

The board is also said to have dismissed implicated members of senior management, engaged a new head of internal audit to strengthen capacity

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