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CMA Fines Former Chase Bank Directors and Auditor KSh36m

CBK approves liquidation of Chase Bank Limited in receivership Kenya Deposit Insurance Corporation KDIC, is the liquidator

The Capital Markets Authority (CMA) has fined former board members and senior managers of Chase Bank and its Reporting Accountant Deloitte and Touche over their role in the issuance of a Ksh 10 billion bond in 2015.

Former Chase Bank Group Managing Director Duncan Kabui has been fined Kshs. 5 million and disqualified from being a director or key personnel of a company regulated by the Capital Market Authority for 10 years, while Deloitte has been fined Ksh 10 million.

“In line with its investor protection mandate, the CMA has taken enforcement action against former board members, senior management of Chase Bank Kenya Limited (CBKL) (the MTN Issuer) and CBKL reporting Accountant for their role in the issuance and use of MTN in 2015,” said CMA.

Deloitte and Touche, the bank’s reporting accountant at the time, was fined KSh10 million.

“Further the Committee recommends that the conduct of the accounting partners during the respective audit periods be referred matters be taken up by ICPAK (Institute of Certified Public Accountants Kenya),” said CMA.

Chase Bank became the first bank in Kenya to go under receivership and was revived within three weeks.

The biggest development in the Kenyan banking sector was placing Chase Bank Kenya under receivership on April 7, 2016. A run on deposits revealed that some directors had issued larger unsecured loans to themselves than the bank’s working capital. The problem was further escalated with the Bank’s chairman, and the group managing director resigned shortly after announcing restated earnings with a qualified audit opinion.

In 2018, SBM Holdings Ltd has acquired Chase Bank Kenya Limited (In-Receivership) through its subsidiary SBM Bank.


 

IK is a Masinde Muliro University graduate. His interests are in news and analysis on women's rights, politics, technology, law, and global affairs.

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