Africa stock exchange lobby’s millions locked in troubled Chase Bank
Mr Geoffrey Odundo, a director at the pan- African association. PHOTO | FILE
What you need to know:
The African Securities Exchanges Association is holding Sh6.1 million at the bank shut down in April by the CBK but later reopened.
A continental stock exchange lobby has revealed that its $69,113 (Sh6.91 million) is stuck at the troubled Chase Bank.
The African Securities Exchanges Association (Asea) said in its latest annual report that it was holding the cash at the bank shut down in April by the Central Bank of Kenya but later reopened.
The lobby has a membership of 26 bourses including the Nairobi Securities Exchange (NSE). The NSE boss, Geoffrey Odundo, serves as a director at the pan-African association.
KPMG, the external auditors, fell short of qualifying the association’s books of account after directors failed to make provisions for impairment of the cash held at Chase.
“Without qualifying our opinion, we draw attention to note 10 of the financial statements, which indicates that the association has balances held with Chase Bank Ltd (in receivership),” KPMG said in their letter to directors dated October 19.
“On the strength of representations made by the receiver manager, the executive committee has made an assessment of the recoverability of the balances and are of the opinion that the balances will be recoverable within the statutory management period,” the auditors said.
It remains unclear how ASEA’s directors have projected they will access the cash at Chase Bank, now under one-year receivership of KCB management.
Chase Bank was unexpectedly put under receivership on April 7 owing to liquidity problems created by a run on the mid-sized lender by panicked depositors.
The bank re-opened on Aril 27 under the care of KCB and Kenya Deposit Insurance Corporation as the receivers, and capped access to deposits at Sh1 million.
The lobby saw net income almost remain flat at $20,908 (Sh2.09 million) in the period to June 2016 compared to $20,525 (Sh2.05 million) a year earlier.
The exposure adds to the list of significant depositors and shows the aftershocks are being felt beyond Kenya.
The United Nations Savings and Credit Co-operative had Sh850 million deposits in Chase Bank, KTDA (Sh1.9bn) and Shelter Afrique Sh400 million.
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