House probe team puts 28 banks on the spot over Sh1.6b NYS scandal

Parliamentary Accounts Committee Chairman Nicholas Gumbo stresses appoint during a Press Conference to address NYS saga at Parliament Buildings 15/11/16 PHOTO MOSES OMUSULA

At least 28 banks are under investigation for their possible role in the loss of Sh1.6 billion from the Devolution ministry.

The National Assembly's Public Accounts Committee (PAC) yesterday revealed that it will ask the Directorate of Criminal Investigations (DCI) and the Ethics and Anti-Corruption Commission (EACC) to provide it with any investigative information into the banks, which handled cash linked to fraudulent National Youth Service (NYS) projects.

"At the moment, while no obvious impropriety is implied on the part of these banks, the same cannot be discounted until proper investigations are done to ascertain what companies that received millions through these banks did for the people of Kenya and if value for money was realised," PAC Chairman Nicholas Gumbo (Rarieda) said during a press conference convened by his committee to update the public on the progress of investigations into the probe.

The committee, which is in the final stages of its work, has so far interviewed key witnesses including former Devolution Cabinet Secretary Anne Waiguru, former Planning Principal Secretary Peter Mangiti and key suspects Josephine Kabura and Ben Gethi. Senior managers of several banks have also been grilled on their role in the transactions.

Hundreds of companies are suspected to have received the loot through the banks, and the committee is of the opinion that the plot to steal from the taxpayer would not have succeeded without the connivance of some financial institutions.

The committee has gone further to seek information on the role of the Central Bank of Kenya or any of its employees in the execution of the scheme.

The committee wants EACC and DCI to furnish it with any investigative reports it may have prepared against CBK.

"We will seek to find out if the investigative agencies have undertaken investigations into the roles played by the banks, and to give us the result of such investigations. We would also like to know if any investigations are being undertaken with a view of establishing culpability of CBK or any of its officials in aiding in the scandal," Gumbo said.

He said the committee suspects that investigations so far may have only scratched the surface, with more sensitive information still hidden from the public.

"There is need for expeditious conclusion of this matter... as to the name of the companies, most of them are in the public domain, but we felt that there is more than what is in the public domain," he added.

Information on the number of banks that transacted NYS money was provided to the committee by the ministry.

The committee had written seeking information on the schedule of payments by the ministry since 2013, the names of contractors and amounts paid, including bank details and branches.

The committee, however, said some of the companies may have done genuine business with NYS, one of the reasons it declined to release the full list of the firms that received the money.

Yesterday's developments come in the wake of a decision by Central Bank Governor Patrick Njoroge to endorse the prosecution of top Family Bank officials over the NYS fraud.

Njoroge wants the bank and its senior staff punished for failing to report to the Financial Reporting Centre significant transactions by NYS suspects.