Auditor questions reduced State shares in KCB

A Kenya Commercial Bank banking hall. Kenyans may have lost more than Sh35 billion in KCB through unexplained transfer of shares held by the State. (PHOTO: COURTESY)

Kenyans may have lost more than Sh35 billion in Kenya Commercial Bank (KCB) through unexplained transfer of shares held by the State.

Changes in shareholding in the once fully Government-owned lender have seen the stake fall to 17.74 per cent.

Auditor General Edward Ouko has now pointed out that the Government should be holding more than 1.74 billion shares in the bank.

"It is, however, not clear how the reduced Government shareholding of 523,600,000 shares in the company was arrived at or how the nominal value decreased," Mr Ouko says in his audit.

KCB is the biggest and most profitable lender in the Eastern Africa region, with operations in all the bloc's six nations; Kenya,Uganda, Tanzania, Burundi, Rwanda and South Sudan.

KCB is currently valued at over Sh100 billion going by the share price at the Nairobi Securities Exchange where her stock is listed, but the lender's worth has previously been over Sh150 billion.

Ouko's query relates to the period since 2001 when the Government held just over 87 million shares with a par value of Sh20 a piece.

Subsequent to share splits that saw one original share divided into 20 units should have seen the State control the 1.74 billion shares.

Investment records at the National Treasury reflect that the Government shareholding of only 523,600,000 shares out of the total of three billion shares, translating to the present 17.74 per cent stake.

The Auditor General did not indicate whether his office had sought clarification from either the bank or the National Treasury, which is the custodian of public assets and investments.