28 more banks under probe over NYS scandal

Director of Public Prosecution Keriako Tobiko has revealed that 28 more banks are under probe for handling National Youth Service loot and failing to report suspicious transactions.

The DPP in an appeal filed by Family Bank in an attempt to block continuation of the criminal case against its employees including former Chief Executive Officer Peter Munyiri, its representative John King'ori and other top officials said there would be more prosecutions once the investigations are over.

"Other banks are under investigations and a decision will be made when they are concluded," Senior Assistant DPP Victor Mule disclosed.

The revelation by the DPP came after Family Bank told Court of Appeal judges Martha Koome, Fatuma Sichale and G.B.M. Kariuki that it was not the only lender that handled the loot from the youth service and thus it was unfair to have only its officials in court.

The financial lender lamented that the move to charge its employees was selective treatment.

But Mr Mule said that Family Bank was just the first culprit netted and others are on the way and thus there was no hand picking on who to prosecute and who to leave out.

Family Bank through lawyer Waweru Gatonye also told the court that Central Bank of Kenya is equally to blame over NYS, as it was the source of the money paid to the suspects.

According to Family Bank, all the NYS money was released from the CBK vaults and thus blaming the banks for handling the loot was unfair as the regulator gave the green light for the stolen money to be released.

It also grieved that CBK had already fined it Sh 1 million for failing to report suspicious transactions in relations to NYS.

Lawyer Gatonye argued that it is the same Dr Patrick Njoroge led institution that recommended that Family bank ought to be held accountable.

The lawyer told the court that the fine plus criminal charges mounted to double punishment.

"There was selective treatment of the applicant (Family bank). Out of the 28 banks which dealt with NYS funds, none of them were treated in the manner our client was treated," submitted Gatonye. “The money in NYS was being paid by CBK. Indeed CBK had dealt with the applicant and fined the applicant for failing to report the transactions."

The bank also claimed that there have been massive panic withdrawals since the criminal case started.

Other officials facing similar charges are Charles Kamau Thiongo, Raphael Mutinda Ndunda, Nancy Njambi, Meldon Awino Onyango and Josephine Njeri Wairi.

The three judges were told that family Bank faces closure if the prosecution continues.

Lawyer Gatonye submitted: "There is great concern if publicity continues with the prosecution. The bank has suffered massive withdrawals and if it collapses, the appeal will have been rendered nugatory. There could be a lot of suffering from depositors who believe in the sustainability of the applicant."

The Attorney General Prof Githu Muigai who was also named as a respondent in the case urged the court to dismiss it as all the claims raised by the Bank could equally be placed before the trial Court when the case comes up next month.

Court of Appeal will deliver its verdict on March 31.