Former NBK bosses found guilty of fraud

Ex NBK Boss Munir Sheikh Ahmed

Former National Bank of Kenya (NBK) bosses have been found guilty and charged with fraud. What’s more, they have also been banned from holding office in listed companies for up to 10 years. Charges of Sh1Bn in theft from the lender have since been levelled against them.

Earlier on this week, the Capital Markets Authority (CMA) released a report on the investigations. The report found the NBK officials liable for misrepresenting the bank’s financial statements. This accounts for the periods ended June 30, 2015 and September 30, 2015.

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Embezzlement

According to the report, the Nairobi Securities Exchange (NSE)-listed bank’s profits were  overstated. Furthermore, Sh1 billion was lost through an embezzlement scheme. NBK’s former managing director, Munir Sheikh, is among the eight managers alleged to have participated in the scheme. He has since been slapped with a Sh5 million fine.

Penalties

The CMA said it had concluded an inquiry into the affairs and will now pursue their prosecution based on whistle-blower information.

The misrepresentation of financial statements was linked to a premature recognition of sale of assets amounting to Sh800 million, under-provisioning for loans, and wrongful recognition of interest income leading to overstatement of profit in the respective periods.

The alleged embezzlement scheme is linked to a deposit mobilisation programme that paid commissions to private agents for funds banked by government agencies.

The CMA says investigations had established that up to 90 per cent of the commissions paid to the private agents may have later been transferred back to NBK officials.

 

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