CBK boss under the spotlight over Charterhouse saga
Central Bank Governor Njuguna Ndung’u.
What you need to know:
CBK closed the bank over allegations of money laundering, tax evasion, violations of the Banking Act and Prudential Guidelines.
Finance minister Njeru Githae appeared before a House committee and said a decision on the reopening of the bank lay with the Central Bank which regulates the industry.
Parliament has summoned Central Bank of Kenya governor Njuguna Ndung’u to explain why Charterhouse Bank has not been reopened six years after it was placed under statutory management.
House Speaker Kenneth Marende authorised the summons after the Parliamentary Committee on Implementation of House Resolutions said Prof Ndung’u failed to appear before it on Wednesday, the third time he had ignored the summons.
Chairman Alex Mwiru said Prof Ndung’u had failed to implement a House resolution made two years ago that the bank be re-opened following the adoption of recommendations by the parliamentary Finance Committee chaired by Nambale MP Chris Okemo.
CBK closed the bank over allegations of money laundering, tax evasion, violations of the Banking Act and Prudential Guidelines.
However, Parliament in 2010 adopted the report of the Finance Committee calling for the immediate reopening of the bank.
On Wednesday, the CBK governor wrote to National Assembly clerk Patrick Gichohi, informing the committee that he would not appear because the matter set for discussion was pending before the High Court.
The case Miscellaneous No 365 of 2012, is between the Centre for Human Rights and Democracy against the Ministry of Finance and the Attorney General. “We are constrained not to appear unless and until the court orders are either set aside or varied to avoid conflicting proceedings with due prejudice to ourselves,” Prof Ndung’u stated in the letter.
He was first called to appear before the committee on October 2 but requested the meeting be pushed back by two days but he still failed to honour the summons.
Mr Mwiru said the Banking Act does not allow a bank to be placed under statutory management for more than three years, claiming the statutory manager was being paid Sh3 million a month.
“If he fails to honour the summons, then we will recommend action against him and Parliament will decide his fate,” the Tharaka MP said after a closed door meeting.
The committee sought Prof Ndung’u to disclose if the bank had met the conditions set for its reopening by the Central Bank.
Finance minister Njeru Githae appeared before the committee and said a decision on the reopening of the bank lay with the Central Bank which regulates the industry.
Prof Ndung’u becomes the second executive to decline to give evidence to a parliamentary committee because the matter in question was before the courts.
Two weeks ago, Kenya Airways CEO Titus Naikuni refused to answer questions on the retrenchment of airline staff because the matter was before the Industrial Court.
