NAIROBI, Kenya, Mar 5 – The CEOs of five local banks which had been implicated in a multi-million graft scandal have been spared from facing criminal charges after their banks refunded Sh385 million to the government.
Kenya Commercial Bank, Equity Bank, Standard Chartered Bank, Diamond Trust Bank, and Cooperative Bank signed an out-of-court deal with the Office of the Director of Public Prosecutions to deposit the funds, which were part of 2015’s National Youth Service scandal in which at least Sh11 billion was siphoned from the institution.
The five, who include KCB Group CEO Joshua Oigara, Equity Group’s James Mwangi and Co-Operative Bank’s Gideon Muriuki, faced prosecution by the Director of Public Prosecutions Noordin Haji, over failure to report suspicious transactions carried out in their banks, as required in law.
Others are Standard Chartered Bank Kenya’s CEO Kariuki Ngari and Diamond Trust Bank’s Nasim Devji.
“The said amounts were paid into the Prosecutions Fund Account and will be restituted to the public following the existing laws and procedures,” DPP Haji said.
In addition to the penalties and as part of the agreements, Haji said the banks committed to review and implement several corrective measures.
These include reviewing the ‘Know Your Customer (KYC)’ compliance status and ensuring proper support documentation for customer transactions in a myriad of mitigative measures.
They also agreed to enhance their existing Anti-money laundering and combatting the financing of terrorism monitoring systems, in a bid to enable real-time monitoring of digital transactions.
The DP said the banks will also take disciplinary action against their staff involved in violating banking rules.
“They will also conduct extensive Anti-Money laundering training for all staff and their board of directors,” Haji said.
The DPP said he will continue ensuring financial institutions “strive to attain exemplary corporate citizenship and highest principles of integrity and professionalism.”
The country lost more than Sh700 million shillings during the first phase of NYS scandal.