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Moi advised Euro Bank to take care of clients’ money, court told

By | October 3rd 2009

By Wahome Thuku

Retired President Daniel Moi had advised the managers of the ill-fated Euro Bank to protect public funds deposited by State corporations.

He allegedly made the appeal during a meeting with the bank officials and managers of the National Hospital Insurance Fund (NHIF).

A report produced in court on Friday indicated that Moi met the then NHIF chairperson Dr Jennifer Riria, Managing Director Ibrahim Hussein and Euro Bank chairman Solomon Muthamia at least three times between March and December 2001.

Imenti Central MP Gitobu Imanyara attended the meetings held at State House in Nairobi and Nakuru. They were called to discuss how NHIF should invest in the bank.

The report on the Euro Bank, which was prepared by NHIF in 2003, indicated that during the meeting Moi spoke about the need to support indigenous banks. The former Head of State then instructed the NHIF bosses to deposit the money.

Euro Bank collapsed in February 2003, owing several parastatals more than Sh1.8 billion in deposits. The NHIF had deposited more than Sh479 million in the bank.

Dr Hussein is now being tried for abusing his office by depositing the money. He faces eight counts of arbitrarily authorising a Sh479,499,754 deposit into the bank. He is alleged to have authorised the deposit in breach of the State Corporations Act on eight days between July 2001 and September 2002, thereby prejudicing the NHIF.

Hussein was charged in April 2003 but decided to challenge the prosecution at the High Court. He lost the case and the trial began in August this year by Senior Principal Magistrate Lucy Nyambura.

Several other parastatal bosses were charged around the same time with similar offences but magistrate courts have acquitted them. Also acquitted were Muthamia and two other bank directors.

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