The Central Bank of Kenya building in Nairobi. PHOTO | FILE
Dodgy loans, poor governance and looting claims dogged several firms last year indicating shareholder investments and customer deposits remain unduly at risk.
Troubled Chase Bank was reported to have irregularly advanced Sh16.6 billion to various entities, many of them associated with insiders, without proper security putting billions of shillings belonging to 55,000 depositors at risk.
According to the Central Bank of Kenya (CBK), half of the irregular loans went to the lender’s insiders, forcing the regulator to place it under statutory management with KCB Group as receiver manager.
The CBK said one of the lender’s directors lent himself Sh7.9 billion, mostly without registered collateral.
“The director lent himself more than 25 per cent of the total capital limit set in the Banking Act,” said the regulator.
As the year ended, claims emerged of looting through creative accounting and subprime lending at the Pan-African housing financier Shelter Afrique.
Financial documents revealed that the firm had been rescheduling loans to appear as performing, effectively suppressing the volume of toxic mortgages.
At least 59 per cent of the Shelter Afrique $246.3 million loan book was classified as non-performing by February, it was claimed.
In December, a former HF Group director filed a court case exposing the bank’s inner dealings, including alleged cooking of books and illicit insider lending.
Former director of credit, Kevin Isika, claimed in court filings that HF Group high-ranking executives have over the years colluded to hide Sh4.3 billion bad loans.
He also claimed that a select group of the bank employees have been exploiting a loophole in the lender’s system to exempt some borrowers from interest on loans, in return for kickbacks.
The bank dismissed the accusations insisting that the matter had been investigated and resolved.
At the State-owned listed East African Portland Cement Company (EAPCC), the Auditor General questioned the ability of the firm to stay afloat with a Sh2.8 billion loss.
The EAPCC liabilities of Sh4.96 billion have grossly exceeded its current assets of Sh2.11 billion, leaving it technically insolvent. The company blamed the corruption, cartels and bloated workforce for the losses.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
