Family Bank sends home nine employees over NYS scandal

Family bank has terminated the employment of nine managers who were adversely mentioned in the Sh791 million National Youth Service scam.

The decision by the mid-tier lender comes barely a month after the Director of Public Prosecutions Keriako Tobiko directed seven managers to be probed by Directorate of Criminal Investigations (DCI) after being linked to a scandal that recently led to the exit of Devolution CS Anne Waiguru and PS Peter Mangiti.

In a press statement, the bank said that the decision is in line with its policies and also in order to safeguard its image in the market.

“It is the bank’s policy that any member of staff who has been adversely mentioned in such a matter exits employment until they are cleared by the authorities to protect the reputation of the bank,” said the bank in a statement published in the local dailies.

In mid-November, the seven individual’s that were on Tobiko’s radar included Meldon Onyango (relationship manager), Robert Oscar Nyaga (KTDA branch manager), Martin Kagiri (operations supervisor), Josephine Njeri Waira (branch customer service supervisor) , and Nancy Njambi, the platinum manager and head of risk and compliance department. But the number of those who have exited Family Bank is nine, two more than the seven that recorded a statement at DCI.

“To this end, nine members of staff have since exited from our employment. It is a stance that is tough but necessary to ensure strict compliance with our fiduciary duties to all our stakeholders,” the lender said.

Initial investigations showed that the Sh791 million was first wired into Form Home Builders, an account at Family bank before it was redistributed to other banks. But the bank maintained that the funds were transferred into its customer accounts through Central Bank of Kenya via the highly secured and standard Real Time Gross Settlement (RTGS) system, which is used by all banks.

In October, detectives from the Banking Fraud Investigation Unit (BFIU) had raised suspicion on 20 accounts spread out in Barclays, Kenya Commercial Bank, Chase Bank, Paramount Universal Bank, Commercial Bank of Africa, K-Rep, Diamond Trust Bank, Prime Bank, Standard Chartered and Family Bank.

In a scandal that has seen Ethics and Anti- Corruption Commission (EACC) detectives cast their net wider in bid to piece together evidence, Family Bank has reiterated that it did not flout any regulation. It said that it has fully cooperated with EACC and Central Bank of Kenya.

The former managers are supposed to prove whether the bank adhered to laws relating to money laundering and proceeds of crime. The Central Bank Act requires financial institutions to report transactions above Sh1 million or any transactions they deem complex, unusual or suspicious to the Financial Reporting Centre.

So far, the scandal has seen Anne Waiguru, who was heading the Devolution and Planning docket, resign and NYS director Nelson Githinji step aside. Also mentioned in the scam is business man Ben Gethi and his Horizon Limited company.

Freeze assets

Mid this month, the Government moved to freeze and possibly seize assets of eight individuals linked to Sh791 million that authorities say was fraudulently paid out by National Youth Service (NYS). Targeted by the Assets Recovery Agency are eight parcels of land in Nairobi and Thika, some in upmarket city areas like Muthaiga North and Rosslyn Estate under caveat of the High Court.

Authorities have also stopped dealings in a restaurant and building along Moi Avenue worth hundreds of millions of shillings and also impounded a luxury vehicle.

The ownership of the property revolves around the eight suspects – Ben Gethi, John Kago Ndungu, Josephine, Charity Wangui Gethi (Ben’s mother), Jedidah Wangari Wangui (Ben’s sister), John Kago Ndung’u, Sam K Mwadime, lawyers Patrick Onyango Ogola and Martin Muthoni Gitonga.
According to the gazette notice, the properties targeted in the order include two pieces of land in Muthaiga, a house in Rosslyn Estate, Nairobi, Eden Times Restaurant located in Mercury Building along Moi Avenue and a Range Rover Vogue all valued about Sh500 million.

They cannot be transferred, mortgaged, attached or disposed of in any way for the next six months.