The National Bank of Kenya board has sent its chief executive Munir Ahmed and five top managers on forced leave to pave the way for a comprehensive audit of the bank’s operations.
Mr Ahmed, who has served as chief executive for the last four years, will step aside pending investigations into alleged breach of fiduciary duty and failure to adhere to corporate governance rules.
The bank did not disclose the names of the other five managers. NBK, majority owned by the government, has appointed Wilfred Musau, who joined it six months ago, in an acting capacity.
“The six managers will immediately proceed on leave but will be expected to comply and make key submissions to the internal audit process,” said the board in a statement.
The suspension comes at a time the bank is battling claims of mismanagement and a loose credit policy resulting in the ballooning of bad loans, affecting its financial standing. “We have instituted an internal review of our financial performance and as part of the mentioned tenets, the internal audit process shall be independent hence the request by the board for the six managers to proceed on leave,” said the bank’s chairman, Mohamed Hassan.
The bank has two days to release its full-year financials as per the Central Bank regulations, which require banks to publish their results by the end of March. NBK posted an after-tax profit of Sh2.2 billion in the nine months to September.
National Bank made the announcement Monday evening following a series of multi-pronged audits that the Central Bank of Kenya(CBK) and the Capital Markets Authority ordered and which found massive gaps in the bank’s books.
The bank, which is 22.5 per cent owned by taxpayers through the Treasury, re-appointed Deloitte & Touche as its auditors during the last annual general meeting held in March 2015.
The six suspended executives are now expected to present themselves for questioning during the ongoing forensic audit. Workers, through the National Social Security Fund (NSSF), are the largest shareholders at National Bank with 134.5 million shares or a 48.05 per cent stake.
The bank had over the Easter weekend sent out two panic statements stating that the ongoing scrutiny of its accounts was in line with CBK operational guidelines.
“The aforementioned actions by the Board are an unequivocal demonstration of our commitment to strict adherence to corporate governance tenets and the various Central Bank of Kenya (CBK) guidelines,” said the bank’s chairman Mohamed Hassan.
