The saga surrounding Spire Bank's acquisition by Equity Bank deepened Tuesday after some MPs cast doubt over the process.
The legislators also want the Central Bank of Kenya (CBK) to come clean on its approval of the Assets and Liabilities Purchase Agreement, which saw Spire Bank pay Equity Bank Sh1.7 billion to cover the liabilities it acquired from the troubled lender.
The MPs, Samuel Atandi of Alego Usonga Constituency and John Kaguchia of Mukurwe-ini, consequently want the purchase agreement terminated.
The agreement has since been frozen by the Employment and Labour Relations Court amid a dispute over the fate of employees in the teachers-owned bank.
Mr Atandi wants the Cabinet Secretary for National Treasury and Economic Planning Professor Njuguna Ndung'u to give the valuation report that informed the acquisition of Spire Bank by Equity, the individual or company that carried out the valuation and when it was carried out as well as the amount of money paid for the exercise.
Additionally, the lawmaker has demanded that Prof Ndung'u reveals when the approval of the agreement was granted and how it went through, although three members of the board of Spire Bank had resigned earlier.
"Could the Cabinet Secretary clarify whether the CBK carried out mitigation measures through funding of Mwalimu Sacco to meet the liquidation costs and if yes, at what cost and why the preference instead of funding Spire Bank," says Mr Atandi in his questions contained in yesterday's order paper.
They will now be forwarded to the Departmental Committee on Finance and National Planning.
Both Atandi and Kaguchia wondered why CBK, the financial regulator, did not fund the bank directly as it looked for a strategic investor who would have given a better offer.
Mr Kaguchia wants to know the role played by the Competition Authority of Kenya (CAK) and its recommendations and decisions that informed the acquisition.
Following the purchase agreement between Equity and Spire Bank in early September, some of the latter's board members resigned in a huff even as the banking union went to court, threatening to scuttle the transaction.
The deal will see Equity, which has a Sh1.3 trillion asset base, take over Sh945 million in loan assets from struggling Spire Bank and deposit liabilities of Sh1.3 billion.
Mwalimu Sacco, the majority shareholder in Spire Bank, will pay Equity Sh1.7 billion to cover liabilities.
Spire Bank is in a financial mess with the teachers-owned bank having breached nearly all capital adequacy and liquidity ratios.
In January, teachers resolved to cut all links with the loss-making Spire Bank by the end of March of this year in what was supposed to lift a heavy financial burden off the books of their Sacco.
In a communique dated January 12, the former chairperson of Mwalimu Sacco John Ochieng told members that the Sacco would either be sold or liquidated.
"It's time for the Sacco to cut its losses emanating from the Spire Bank venture and that must be done now," he said.