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Former National Bank boss held at airport, spends night in custody

By LUKE ANAMI and PAUL WAFULA | July 16th 2016
Immediate former National Bank of Kenya CEO Munir Ahmed.

Former National Bank of Kenya (NBK) chief executive, Munir Ahmed, was arrested at the airport on suspicion that he was fleeing the country, then released without any charges, Friday.

Police arrested Mr Munir at the Jomo Kenyatta International Airport in Nairobi on Thursday night. He spent the night at Kileleshwa Police Station cells as his friends tried to have him released in vain.

On Friday, he was detained at the Milimani Law Courts basement cells for more than three hours.

However, he was not arraigned in court as the matter was handled administratively. Munir will now await further direction by the Director of Public Prosecution on the matter.

Senior Counsel Paul Muite defended Munir saying he was going on holiday and was not running away as alleged by police. “He was going on holiday accompanied by his wife and young family after his passport was released by police,” Mr Muite said.

Police confiscated the passports of Munir and other former bank officials after they were sacked in April over claims of financial malpractice.

Muite earlier protested at what he termed an attempt by the Banking Fraud Unit to charge his client without involving the DPP.

He said he will file a petition against the head of the Banking Fraud Unit. “The manner in which my client was handled is not proper. A passport can only be impounded by a court of law but that was not the case,” Muite said accusing the police of failing to follow the proper procedures while arresting Munir.

Police who arrested him said they had been informed he was fleeing the country and would not return but he told them he was flying to Dubai to visit his family.

Munir said police had returned his passport and wondered why they arrested him at the airport.

The former NBK boss and five other managers were sacked days before the bank reported Sh1.2 billion loss, its biggest in eight years. The bank blamed this on a 62 per cent jump in non-performing loans — cash advanced that it does not expect to get back.

Bad loans

Police said charges against the other managers are ready and they would soon be arraigned in court.

This comes a day after eight managers of collapsed Dubai bank were charged in court. Police also confiscated travel documents for six Imperial Bank directors last year to stop them from leaving the country after the lender was caught in a Sh38 billion scam. It is not yet clear if they have been returned.

It is the latest trouble for Munir who is being investigated for sanctioning insider loans that saw the bank book heavy provisions for bad loans.

Police are investigating risky loans dished out to friend’s and relatives of some of the bank officials.

Munir is accused of giving a loan to his brother. But he has said he did not influence the credit team who made the decision based on merit.
NBK has been undergoing multi-pronged audits from internal auditors who report to the board of directors, the Central Bank of Kenya (CBK) and external auditors.

The audits are expected to look at these suspicious accounts, some which are related and receive common account-to-account transfers.
Other risky lending the bank is fighting was dishing over Sh800 million to a Sacco just a few hours after it opened an account at the bank.
An oil company was advanced Sh236 million after holding an account at the bank for just one month.
Some other person connected to the bank officials received Sh38 million barely two months after opening his account at NBK.

Aside from these funds being advanced in haste in clear violation of banking regulations, these customers (who we cannot name for legal reasons) had no time to build a track record, raising the risk of their defaulting on repayments. A dossier prepared by insiders claimed that 95 per cent of mortgage loans were approved without site visits being conducted by bank officials.

-Additional report by Cyrus Ombati

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