NBK fights push for audit by Ouko office

National Bank of Kenya is currently the subject of a takeover bid by the KCB Group. [Courtesy]

The National Bank of Kenya (NBK) now says it is not a State corporation to be audited by the Auditor General.

The bank has been at loggerheads with Parliament for more than a decade for declining to allow the Auditor General access to its books of account despite the Government holding a sizeable shareholding in the institution.

This has in the recent past seen the National Assembly Public Investment Committee (PIC) recommend that public institutions close down their accounts at the troubled bank.

The bank is currently the subject of a takeover bid by the KCB Group.

The question of the Auditor General Edward Ouko looking into its books came up again last week during a session with the committee that is currently probing the impending takeover.

In a written response on the matter seen by The Standard, the bank’s management insisted that the institution is not a wholly-owned Government parastatal and should, therefore, not be audited by the public auditor.

NBK Chief Executive Wilfred Musau said although the Government currently holds a 22.5 per cent stake in the struggling lender, its operations are not funded from the Exchequer. “…As such, the audit mandate of the Auditor General cannot in any way whatsoever be deemed to extend to the bank,” said Musau. Parliamentary committees have argued that though the Government is not a majority shareholder, the fact that the main shareholder is the National Social Security Fund (NSSF), a public entity that is audited by the Auditor General, then NBK should also be subjected to the same.

Musau told the watchdog committee that a presidential task force on parastatal reforms in its October 2013 report ruled that NSSF is not a government investment, and therefore its shareholding in NBK and the East Africa Portland Cement (EAPC), are not government investments.

But PIC Chairman Abdullswamad Nassir dismissed the bank’s position, arguing that it was ironical that it was equating its status to EAPC, yet the cement company is annually audited by the Auditor General.