National Bank of Kenya board sends CEO, five managers on forced leave

Suspended National Bank of Kenya Managing Director and CEO Munir Sheikh Ahmed. [Photo:Elvis Ogina/STANDARD]

National Bank of Kenya’s woes deepened as the board sent CEO Munir Ahmed and five senior managers on compulsory leave pending an internal audit.

In a statement issued late yesterday, the lender’s board of directors termed the decision as “an unequivocal demonstration” of the bank’s commitment to strict adherence to corporate governance tenets and the various Central Bank of Kenya (CBK) guidelines.

“We have instituted an internal review of our financial performance and as part of the mentioned tenets, the internal audit process shall be independent hence the request by the board for the six managers to proceed on leave,” said Board Chairman Mohamed Hassan.

NBK’s Director for Retail and Premium Banking Wilfred Musau, who joined the bank six months ago, will now be the lender’s acting CEO. Mr Musau joined NBK from NIC Bank where he was in-charge of branch business.

According to sources, the other managers come from finance, risk management, ICT, Treasury and corporate and institutional business. By the end of today, the board says it will have filled the five positions as the bank embarks on an internal audit process.

According to the board, the six managers will immediately proceed on leave but will be expected to comply and make key submissions to the internal audit process. “We reiterate that the internal process is not an indictment on the said managers but an opportunity to ensure a fair, transparent and independent audit process,” read the statement in part.

Forced takeover

In the 2014-2015 period, the bank saw more than 15 top managers exit. The decision also comes a day after the State-owned lender through their Twitter handle, spiritedly fought off rumours on social media that there was massive rot in the bank.

Also there were reports that some wealthy Kenyans, with the help of some board members, were planning to forcefully takeover the bank.

The NSE-listed bank is said to have non-performing loans running into billions of shillings. NBK is among the four commercial banks that are also being investigated by the Kenya Revenue Authority (KRA) for abetting tax evasion.

The chairman assured the bank’s customers that the changes would not affect the normal operations of the institution. He added that the organisation’s strategy was on track.

The management had previously blamed its financial woes on failure by Treasury to approve its rights issue that would have helped to restructure its weak balance sheet. NBK posted an after-tax profit of Sh2.2 billion in the nine months to September 2015.