Saturday, July 12, 2008

National Bank of Kenya: Bigger scandal than GRH

In the 1980s and 1990s, the M-o-1 regime completely lost it. Guys had to be rewarded and were rewarded as if Kenya was the mzee's property. Land was no longer enough. One of the then new gifts given then was "nenda NBK umbie mzee amesema upatiwe pesa" literally "go to NBK and tell them mzee said for them to give you money". Naturally these had to be recorded as loans, but loans with no collateral. By the late 1990s, these were so bad that GoK considered closing down NBK. At the time Nyachae a no nonsense type of politician was Finance Minister and realising things had haywired completely released a list of 87 politicians and their affiliated companies who were behind NBK's problems as they owed Ksh8.7bn (around ksh30/Ksh40bn in today's money). Getting hold of that list today is virtually impossible to do but I know it includes:
  1. Sam Ongeri;

  2. the late Kipkalya Kones;

  3. Joshua Kulei;

  4. the late PC Fred Waiganjo

  5. the late Munene wa Kairu (my former MP) who owed just over Ksh300m

  6. to 87. who I'll name as I collect the names...

These loans are it seems the ones that were written-off by GoK in its Ksh20bn bond to NBK. At the time of the deal to write-off the Ksh20bn I was shocked because my understanding was always that NBK didn't have significant portfolio of bad debt emanating from parastatals. What it means is somebody took money from NBK under duress, spent it and then had GoK pay-off the loan on their behalf!

And peeps are complaining about what looks like a bargain (though unprocedural and untransparent) deal for Grand Regency?

PS: While searching for the 87 names, I stumbled upon the original Ndungu-repport otherwise known as the List of Shame that was tabled by Musikari Kombo sometime back. Very very interesting read...

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