A former top executive director of the troubled Chase Bank, now under joint management of the deposit insurer and KCB, is at the helm of a key State enterprise financier only months after turbulence stalled the lender.
Industrialisation secretary Adan Mohamed a few months back appointed Parmain ole Narikae the chief executive officer of the Kenya Industrial Estates (KIE).
Mr Narikae, who also doubles as a board member at the multibillion-shilling Unclaimed Financial Assets Authority, was the director of external and regulatory affairs at Chase Bank when it went bust early this year.
The second-tier bank re-opened in late April after it was unexpectedly placed under receivership by the Central Bank of Kenya (CBK) on April 7 owing to liquidity problems created by a run on its deposits.
Mr Mohamed appointed Mr Narikae under the State Corporations Act (Cap. 446) in Gazette notice number 6784.
“In exercise of the powers conferred by the State Corporations Act, the Cabinet Secretary for Industry, Trade and the Co-operatives appoints—Parmain ole Narikae to be the chief executive officer of the Kenya Industrial Estates Ltd, for a period of three years, with effect from the 5th September, 2016,” said Mr Mohamed in the notice dated August 3, 2016.
Mr Narikae’s post at Chase Bank charged him with the administrative co-ordination of the various functions “towards the realisation of Bank’s objectives as well as the development of capabilities of personnel in the Bank.”
In addition, he was also the chairman of the Chase Group Foundation, whose aim, according to the brief on the bank’s website, “is to facilitate giving back to the nation through initiatives that contribute to the development of various sectors of the Kenyan society”.
A run on the bank’s deposits was triggered by the ejection of two directors and restatement of accounts, which revealed huge non-performing loans.
Irregular insider borrowing camouflaged as Musharakah — a Sharia compliant financing used by Islamic banks — was previously classified as ‘‘other assets and interest receivable’’ in the balance sheet.
Chase Bank’s flawed loan issuance system saw it lend billions of shillings unprocedurally, according to the CBK.
CBK said non-executive directors had awarded themselves 15-year interest-free loans under the guise of Islamic banking.
The SME-focused lender reported a surprise Sh743 million loss for the year ended 2015 after re-stating provisions for bad debts.
In his new capacity as KIE boss, Mr Narikae is charged with bolstering the government’s industrialisation agenda.
KIE was established in 1967 with the mandate of promoting industrialisation through indigenous enterprise development in the country and its most famous client is Mastermind Tobacco Ltd.
The agency’s mandate is listed as providing industrial parks, medium to long-term financing, business advisory and training services.
“Currently, the company is going through change with a view to repositioning it to effectively contribute to the realisation of Vision 2030,” says information posted on the KIE website.
Treasury principal secretary Kamau Thugge and his Industrialisation counterpart Julius Korir are members of the board of directors at KIE.
KIE is chaired by Rehema Jaldesa while directors include Opiyo Elsie Achieng, Lucas Kirui, Bob Karina, Chebet Alaro Evelyne and Charles Kigen.