Don't reopen bank, says KACC

By James Anyanzwa

The Kenya Anti-Corruption Commission (KACC) is opposed to re-opening of Charterhouse Bank until investigations into its dealings are completed.

KACC boss PLO Lumumba said the commission has received additional information on the activities that led to the bank’s closure.

Lumumba said the commission was going through the information to establish whether there was corruption or economic crimes committed before taking action.

In a statement yesterday, he said Charterhouse Bank was placed under statutory management after a request by Central Bank of Kenya. The bank was suspected of operating in breach of Banking Rules and Regulations and carrying out suspicious transactions.

"Under Section 7 of Anti-Corruption and Economic Crimes Act, the commission has power to investigate any matter that in the commission’s opinion raises suspicion that corruption or economic crime has occurred," said Lumumba.

He said the bank should not be reopened until investigations are complete.

The KACC boss said Article 10 of the Constitution binds all persons, including corporate entities, to observe national values, which include good governance, integrity, transparency and accountability.

Charterhouse Bank was placed under CBK’s statutory management in 2006 over claims of money laundering and tax evasion.

The parliamentary committee on Finance, Planning and Trade, however, wants the bank reopened, arguing the reasons for its takeover were biased and that they no longer made sense.

The committee headed by Nambale MP Chris Okemo has grilled various Government officials on the matter. The committee’s recommendation to reopen the bank has been met with resistance by the American ambassador to Kenya Michael Ranneberger and several civil societies.

Former Finance Minister Amos Kimunya was on Thursday taken to task by the parliamentary committee to explain why he ordered the bank closed when there was no proof of money laundering and tax evasion.

Kimunya said he made the decision after

former Mandera Central MP Billow Kerrow raised the matter in Parliament.

"Mr chairman, as far as I am concerned the bank is still under statutory management and

has not been closed. It is supposed to be operational," he said.

Kimunya however absolved Charterhouse Bank from allegations of money laundering.

"After all, those allegations could best be handled by other Government agencies like the Kenya Revenue Authority and Kenya Anti-Corruption Commission," said the Transport minister.

But Kimunya’s remarks did not go down well with the committee.

He said procedures were followed when he placed the bank under statutory management but said the matter was now in CBK’s hands.

But he urged Parliament’s Finance Committee to recommend the liquidation of the troubled Charterhouse Bank to protect small depositors.

Kimunya, now the Transport minister, said reopening the bank would put it at risk of collapse as clients rush to withdraw their money. If the bank is liquidated, he said, depositors with less than Sh100,000 would get their money from the Depositors Protection Fund while the big ones would get theirs from the sale of the bank’s assets.