hen Munir Sheikh Ahmed sauntered into the corner office at National Bank of Kenya (NBK) #ticker:NBK in August 2012, he was bubbling with ambitions.
Having worked for nearly two decades with Standard Chartered Bank #ticker:SCBK, both in Kenya and overseas in the United Kingdom and South Africa, he felt he was well cut for the job at the helm at the State-run lender.
Up his sleeves was a three-pronged approach to turnaround the mid-tier bank: automating processes, centralising the operating model, and leveraging on technology.
He soon embarked on implementing these plans but as fate would have it, he didn’t get far. Two-and-a half-years into his tenure, Mr Ahmed was on the evening of March 29, 2016 ejected from office alongside five other senior managers on the instructions of the NBK’s board of directors to pave way for “an internal audit”.
This marked the start of tough and frustrating times for Mr Ahmed and his colleagues amid numerous grilling sessions and summons by investigative agencies looking into allegations of loss of funds at NBK.
And this week, exactly two years since his unceremonial exit from NBK, things seem to get murkier for Mr Ahmed.
The Capital Markets Authority (CMA) on Wednesday meted on him and seven other former senior executives of NBK severe punishment for allegedly cooking books and theft of more than Sh1 billion from the lender.
Other senior managers facing sanctions over the alleged cooking of books and theft of funds are George Jaba (former chief credit officer), Chris Kisire (who was chief finance officer until April 2015), Wycliffe Kivunira (former acting chief finance officer), Solomon Alubala (former head of treasury), Boniface Biko (former director corporate and institutional banking) and Dennis Chumbe (former relationship manager business banking).
The capital markets regulator on Wednesday said its investigations had found the officials liable for misrepresenting the bank’s financial statements for the periods ended June 30, 2015 and September 30, 2015.
“The bank had published unaudited financial statements reporting profits of Sh1.7 billion for the quarter ended June 30, 2015 and Sh2.2 billion for the quarter ended September 30, 2015 but subsequently reported a loss of Sh1.2 billion in audited financial statements for the period ended December 31, 2015,” the CMA said.
The distortion of financial statements was linked to a premature recognition of sale of assets amounting to Sh800 million, under-provisioning for loans, and wrongful recognition of interest income leading to overstatement of profit in the respective periods.
The regulator said the alleged larceny scheme is connected to a deposit mobilisation programme that paid commissions to private agents for funds banked by government agencies. Up to 90 per cent of the commissions paid to the private agents may have subsequently been transferred back to NBK officials, the CMA said.
Mr Ahmed is set to pay a steep price for the alleged financial messes at the troubled NBK.
The CMA has banned him from holding any position in a publicly listed company and hit him with a Sh5 million fine.
Mr Alubala and Mr Kisire have also been disqualified from working for an issuer of securities or a licensed person for a period of 10 and three years respectively.
Despite his predicament, Mr Ahmed’s short tenure at NBK was a mixed bag of fortunes. Under his watch the lender expanded its footprint across the country to 90 branches from an initial 60. NBK’s loan book also more than doubled to Sh66 billion as at December 2014 from Sh28 billion in 2012.
Further, the bank underwent a rebrand of its logo and colours from the predominantly green to yellow and refurbished its branch outlets to appeal to young and savvy customers, and drop the image of an old-fashioned bank with “dingy branches.”
Mr Ahmed’s tenure also had a low moment when the Treasury refused to take part in a rights issue approved by NBK shareholders in June 2013 that was expected to raise about Sh10 billion to finance expansion and growth.
“The NSSF even went ahead to write to the CMA saying they’ll take up any untaken shares. But the CMA said you need backing of two biggest shareholders, which was not even a regulatory requirement, this was a CMA imposed condition,” he told the Business Daily in past interview in 2016.
The delay saw NBK’s capital ratios thin out in the first half of 2014, and couldn’t loan out any more. “You cannot write a loan, or raise deposit without this,” he added.