How Imperial Bank saga threatens Mwilu's 32-year career

The collapsed Imperial Bank saga Tuesday sucked in Deputy Chief Justice Philomena Mwilu in a dramatic case that left her long legal career hanging on a thread.

Director of Public Prosecutions Noordin Haji said that Justice Mwilu accepted cash gifts, obtained execution of a security belonging to Imperial Bank by impersonation and failed to pay taxes.

“This afternoon, I informed Chief Justice David Maraga of my decision to grant consent for the arrest and prosecution of the Deputy Chief Justice, Lady Justice Philomena Mbete Mwilu, on criminal charges. This decision has not been taken lightly, but it is the right decision under the law,” said Mr Haji, seeking to underline the weight of the decision to charge Justice Mwilu.

Mr Haji said details facing the Deputy CJ, who was set free on a personal bond of Sh5 million, will be revealed once she is formally charged in court.

She is expected to face the criminal charges today.

It’s a painful turn of events for Justice Mwilu whose legal career spans 34 years, about 12 of them as a judge.

Justice Mwilu becomes the first top judicial officer after the new Constitution to have graft charges preferred against her.

Only the Judicial Service Commission (JSC) has constitutional powers to commence the process of her removal from office by recommending the appointment of a tribunal to try her.

Some of the grounds spelled out for removal of a judge are inability to perform functions, breach of the code of conduct, bankruptcy, incompetence or gross misconduct or misbehaviour.

JSC can initiate removal on its own motion or on the petition by any other person.

Petition to President

It sends a petition to the President if satisfied that it discloses enough grounds for removal.

The President shall within 14 days after receiving a petition by the JSC, suspend the judge from office and appoint a tribunal which will make its recommendations to the President after investigations.

The Judge is entitled to half salary until removal, or reinstatement in office.

The Central Bank (CBK) appointed the Kenya Deposit Insurance Corporation (KDIC) as receivers of Imperial Bank in October 2015.

A lobby group that represented a section of Imperial Bank depositors had been calling for speedy investigations into its collapse, noting that ongoing investigations have taken too long to bear any fruit.

Two weeks ago KCB revealed that it expects to finalise a takeover of Imperial Bank by the end of September, shifting focus to the ongoing investigations.

Imperial Bank chairman Alnashir Popat, when he appeared before a parliamentary committee, claimed CBK officers were obstructing effective investigations into the mega fraud that precipitated collapse of the bank and were pressing for its liquidation to cover their tracks.

Set to reopen

However, KDIC chief executive Mohamud Mohamud says the fact that the bank is set to reopen proves the allegations about the institution were wrong.

Earlier in February 2016, former directors of Imperial Bank claimed in court papers that Abdulmalek Janmohamed, who died in September 2015, maintained an “inappropriate” relationship with former CBK Governor Njuguna Ndung’u.

Prof Ndung’u’s wife is named as having received gifts from Mr Janmohamed, as part of a calculated scheme to co-opt the banking sector regulator into abetting massive fraud that crippled the lender.

But it’s the court papers filed by receivers that laid bare how Mr Janmohamed ran an elaborate fraud scheme that robbed the lender of Sh34 billion over a period of 13 years.

Mr Janmohammed used a network of 20 companies and individuals to execute and cover up the mega fraud that shook Kenya’s financial services sector to the core.