New Consolidated Bank CEO stopped from taking office

Consolidated Bank chairman Benson Ateng has locked out of office new CEO Geoffrey Ndambuki since his appointment on January 28, documents filed in court have revealed.

Mr Ndambuki was picked by Treasury secretary Henry Rotich to head the State owned-bank out of a list of three candidates shortlisted by the board of directors.

He claims that after his appointment he reported to the bank’s offices for orientation and assumption of office, but the chairman allegedly directed him to stay away.

Mr Ndambuki claims in the suit filed against the bank that the chairman’s actions amount to vetoing his appointment by the Treasury Secretary.

“Leave be granted for the applicant to apply for an order to quash the decision of the chairman of the Board of Consolidated Bank of Kenya Limited communicated to the applicant in February barring the applicant from entry and assuming office as CEO Consolidated Bank Limited,” states part of the application.

Mr Ndambuki claims the chairman had no authority to bar him from office, arguing that the board has not made any decision to lock him out, and even if it did, it has no power to veto the appointment made by the Treasury secretary.

“The mandate to appoint the CEO of Consolidated Bank as per State Corporations Act rests on the Cabinet Secretary ministry of finance and any acts by the chairman of constraining the appointment are grossly illegal,” says Mr Ndambuki.

He says he will suffer double loss having resigned from his job as executive director with Gulf Africa Bank with his new appointment as Consolidated bank CEO now in limbo.

But in response Mr Ateng termed Mr Ndambuki’s suit premature, arguing that the process of filling the position had been finalised.

He said Mr Ndambuki would have to await the full constitution of the board since it is the board which will negotiate with him and approve his terms. He said he had no powers as the chair of the board to negotiate Mr Ndambuki’s terms of employment.

The board chair said in recognition of the adverse media coverage of Mr Ndambuki’s appointment, there was need to follow all laid down processes. He says he had already informed the Treasury Secretary that Mr Ndambuki’s assumption of office is dependent on the constitution of the full board, which is still pending.

“Although five members of the board were appointed on February 21, they are still awaiting the required vetting process conducted by the Central Bank to be concluded”, he added.

But in a rejoinder, Mr Ndambuki argues that his assumption of office is not subject to the board’s approval and that he does not have to wait for the newly appointed board members to be cleared by Central Bank for him to take office.

He claims he received approval of all relevant authorities including the Criminal Investigations Department, the Kenya Revenue Authority, the Higher Education Loans Board and the Ethics and Anti-corruption Commission.

But Mr Ateng says since the three names were forwarded to the Cabinet Secretary last year, they were yet to receive a report from National Intelligence Service (NIS).

The bank’s board interviewed candidates for the position mid last year. 

Mr Ndambuki is said to have scored higher than Mr Thomas Kiyai, Mr Kennedy Ouko and Mr George Rutto.

But his appointment has raised controversy, with some questioning his suitability, which the board chairman alludes to in his submissions.

Mr Rotich has responded by defending Mr Ndambuki’s appointment saying that he was approved by the Central Bank. Thursday, the lawyers representing the bank and Mr Ndambuki told the High Court that they were negotiating with a view to settling the suit out of court.

The case will be mentioned on April 2, to confirm the progress of the negotiations.

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Additional Reporting by WANGUI MAINA