Ex-NBK boss challenges CMA fines and ban


Former NBK managing director Munir Sheikh. FILE PHOTO | NMG

Former National Bank of Kenya (NBK) #ticker:NBK managing director Munir Sheikh has sued the Capital Markets Authority (CMA) over the fines and sanctions the agency imposed on him for his alleged involvement in a books cooking and theft scandal at the bank.

Mr Munir says the CMA’s sanctions were part of a scheme to make him the sacrificial lamb in order to protect other members of the board in the Sh1 billion scam.

The former NBK boss says in court papers that the CMA’s actions were meant to sacrifice him and to sanitise the NBK board whose membership includes the Treasury Cabinet Secretary (CS), adding that the CS is also a member of the CMA board.

“This obvious and apparent conflict of interest contributed to and resulted in a pre-determined outcome where the respondent disregarded the National Bank of Kenya board minutes and resolutions cited by the applicant to sanitise the board of directors decisions to the prejudices of the applicant by shifting all alleged governance and financial improprieties to the applicant,” Mr Munir says in the court papers.

Mr Munir has not spared the Central Bank of Kenya, who he accuses of reaching an adverse decision against him in 2016 over the same matter yet its representative sits in the CMA board, making it impossible for the agency to remain impartial.

Mr Munir was among eight senior executives of troubled NBK who were fined millions of shillings and banned from holding office in any public listed company for up to 10 years for their roles in the cooking of books and theft of more than Sh1 billion from the bank.

The CMA imposed a Sh5 million fine on Mr Munir, and banned him from holding any position in a public listed company before asking the Director of Public Prosecutions to conduct further investigations on the crime and charge the eight with criminal offence.

Mr Munir now wants the High Court to reverse the decision on grounds that the CMA failed to seek some information he had asked it to obtain from NBK, the details of which he says would have helped them to arrive at a different decision.

He further claims the regulator concealed from him some information it relied on to punish him, and that the agency acted as complainant, investigator, prosecutor and the adjudicator in the matter.

CMA is also accused of delaying release of its final decision on the matter until the term of the members of the Capital Markets Tribunal lapsed – a move Mr Munir claims was meant to deny him an opportunity to appeal the verdict.

The CMA at the time of announcing the decision said it had concluded an inquiry into the affairs of the former executives and had decided to pursue their prosecution based on whistle-blower information.

The alleged embezzlement scheme is linked to a deposit mobilisation programme that paid commissions to private agents for funds banked by government agencies.

The CMA says investigations established that up to 90 per cent of the commissions paid to the private agents may have subsequently been transferred back to NBK officials.

Mr Munir joins the growing list of former NBK executives, who have moved to court seeking to overturn the CMA’s decision.

Former NBK head of Treasury Solomon Alubala moved to court seeking to neutralize the CMA’s decision to ban him from holding office and requiring him to pay a fine of Sh104.8 million.

The bank’s former chief finance officer, Chris Kisire, has also filed a similar case contesting the sanctions.

The list of former NBK senior managers facing sanctions over the alleged cooking of books and theft of funds includes George Jaba (chief credit officer), Wycliffe Kivunira (acting chief finance officer), Boniface Biko (director corporate and institutional banking) and Dennis Chumbe (relationship manager business banking).

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