Spire Bank directors face probe over internal fraud

Tuesday, August 6th, 2019 06:00 |
Spire Bank.

Senior management team and the Board of Directors at Spire Bank are staring at investigations over possible internal fraud as the bank’s liquidity remains shaky with deposits almost depleted, People Daily has established.

An internal situational report in our possession paints a grim picture exposing Sh4 billion worth of customer deposits to risk and non-performing loans of Sh3.9 billion.

An internal audit shows that the teachers’ bank faces self or forced liquidation where Mwalimu National Sacco controls a majority stake of 75 per cent and while businessman Naushad Merali owns 25 per cent.

Insiders’ privy to the imminent crisis intimated that the looming collapse has been occasioned by extra-ordinary high losses arising from high loans impairments due to uncontrolled level of non-performing loans (NPLs) leading to  profit crisis. 

The sacco acquired majority stake in Equatorial Commercial Bank owned by Merali before rebranding it  to Spire Bank through Sh2.4 billion injection of teachers savings that included buying some interests from Merali.

Since then, the bank has never paid any dividends since Mwalimu became a shareholder four years ago, further sinking teachers’ savings down the drain. 

A month ago, immediate former Spire Bank managing director Namaan Ambunya tendered his resignation to the board.

“I am in doubt that there’s sufficient shareholder capacity to rebuild the bank afresh. With this background understanding, I offer to resign from the position of managing director,” said Ambunya in his resignation letter dated June 27. 

On July 8, four bank shareholders petitioned Central Bank of Kenya to investigate claims of corruption and abuse of office against one of the troubled bank’s non-executive director.

When contacted for comment, Spire Bank promised to avail responses at a later date.

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