The National Social Security Fund (NSSF) has tightened its grip on National Bank of Kenya after it replaced the Treasury’s candidate in the bank’s board with a new director.
NSSF, which has 48.05 per cent stake in the bank, failed to support the re-appointment of the long-serving board member and former chairman, Michael Muhindi, whom the Treasury had opted to support at last Thursday’s AGM.
Mr Muhindi, Francis Atwoli (the secretary general of Cotu) and the managing trustee of NSSF had asked for shareholders’ support to remain in the National Bank of Kenya (NBK’s) board.
NSSF supported Mr Atwoli and its managing trustee, Tom Odongo, and replaced Mr Muhindi with Wangui Mwaniki, a senior executive at the Kenya Railways—further cementing the growing power and influence of NSSF in the bank’s board.
“The shareholder also re-elected Mr Francis L. Atwoli and the managing trustee NSSF, while Ms Wangui Mwaniki was elected as a new director to the board,” said the bank in a statement after the Thursday AGM.
The 69-year-old Mr Muhindi joined the bank’s board in April 2000 and NSSF cut short his 11 year reign as chair of NBK in June last year when it pushed for appointment of investment banker Mohamed Hassan as head of the board.
The Treasury owns 22.5 per cent of NBK. In June last year, it also replaced Jennifer Riria, Paul Ngumi and Alfred Juma—all government appointees—with Mr Hassan, Sylvia Kitonga and Erastus Mwongera.
The bank has 10 members with three of the directors being executives including the outgoing managing director Reuben Marambii, deputy managing director-customer services Isaiah Mworia, and deputy managing director-human resources Ali Noor.
Of the remaining seven, two —Mr Odongo and the head of financial services at Finance ministry, George Omino— respectively represent the major shareholders, the NSSF and the Treasury.
This means that NSSF has a 60 per cent majority in the board and only needs minority investors with shares amounting to two per cent to push its agenda at the shareholders meetings.
It’s this clout that limited for the first time the government role in appointing the head of NBK as the fund shepherded the search and made the final appointment of the MD without seeking the blessings of the Treasury.
The bank unveiled a Standard Chartered executive Munir Ahmed to assume the role of managing director on August. Mr Munir has worked at Standard Chartered Bank for the last 16 years, mainly in South Africa.
In the three months to March, NBK made before tax profit of Sh486 million compared to Sh467 million a year earlier.