Helb comes under spotlight over Sh500m bank deposits

The Higher Education Loans Board (Helb) deposited Sh500 million in three banks without the approval of the Treasury, Parliament was told Thursday.
The Public Investment Committee (PIC) has consequently summoned former Helb chief executive and current Baringo Governor Benjamin Cheboi, a former Helb CEO, to explain the anomaly.
Charles Ringera, the Helb chief executive officer, was hard pressed to explain why the higher education loan provider deposited Sh100 million in the troubled Chase Bank and Sh200 million each in Jamii Bora Bank and Family Bank without the authority to operate deposit accounts from the Treasury.

Mr Ringera said Helb has not been able to access the Sh100 million deposited at Chase following its placement under receivership in April this year.

The money was meant to be disbursed to students but the Helb management, through its Treasurer, decided to place it on short-term call fixed deposits account first.

PIC chairman Aden Keynan, vice chairman Kimani Ichung’wa and member Cornely Serem (Aldai) accused Mr Ringera and his predecessor of disregarding a directive by investment secretary Esther Koimett reminding the management of a circular requiring surplus funds to be deposited in Treasury bills and bonds.

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Ms Koimett had pointed out to Mr Cheboi the irregular placement of Helb surplus money in privately owned banks without a proper board and the Treasury approvals.

She asked the Helb management to seek proper approvals from the board and the Treasury in order to operate fixed deposit accounts in 11 banks that the Treasury had allowed Helb to hold accounts in.

Mr Keynan said despite the Treasury approving Helb request to operate and place surplus funds in Barclays Bank, Equity Bank and Standard Chartered Bank, there was no approval allowing Mr Ringera to invest surplus in Jamii Bora, Family and Chase Bank.

“The Treasury approved that you operate short term call deposits for period not exceeding three months in Barclays, Equity and Standard Chartered Banks but where are the approvals allowing you to deposit student money in Jamii Bora, Family and Chase Banks?” Mr Keynan asked.

Mr Ichung’wa took Mr Ringera to task to provide evidence that he undertook due diligence on the three banks before operating or placing deposits as directed by the Treasury.

Mr Ringera relied on a letter from the Treasury that approved Helb’s request to operate current accounts in Jamii Bora, Family and Chase banks to place seven-day short term call fixed deposits.

“We assumed that the approval to open and operate the accounts at the three banks allowed us to place short-term call deposits. Our treasurer could take advantage of prevailing interest rates to place the money on two to seven-day fixed deposit before students could access them,” he said.

He said Helb had made a profit of Sh140 million from the fixed deposits placed in the 11 banks which has been lent to students.