Journalist in Trouble over Failed Cooperative Bank Deal

Journalist in Trouble over Failed Cooperative Bank Deal

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A blogger landed in hot soup in a deal gone sour with Kenya’s third biggest bank the Cooperative Bank of Kenya (Coop).

The blogger was arrested early last month for alleged extortion.

The bank’s official  Francis Ngambi, on behalf of the institution, reported to Kilimani Police Station to have the social media practitioner arrested and got detained for more than 24 hours, before the journalists’ union intervened and got freed.

It is alleged, that the blogger who runs a famous blog in the country, had written a story touching on the bank’s CEO and the financial institution’s operations, forcing the bank to act by having the blogger arrested.

The bank made sure that arrest of the journalist was never reported in the media.

The matter, as sensitive as it was, was kept well under wraps with the bank’s allies in the media, some of them on retainer payment in order to protect the bank’s interests ensured that it did not leak at all.

The blogger got into trouble after failing to deliver on their deal upon receiving Ksh 300,000 from the CEO’s Personal Assistant.

Mr Ngambi made the report to the police station and DCI officers picked the blogger in a deal gone sour.

On sensing danger, that the case in court might spill beans on its daily operations and dalliance with the bloggers during the court sessions and proceedings, the bank opted to withdraw the accusations against the journalist.

It is rumoured and alleged that the bank uses bloggers and social media influencers to run negative and positive news. Equally, they sponsor other stories against the competitors.

In 2020, the bank was involved in another similar move that saw bloggers picked up at night from their homes.

The bloggers close to six were collected from different addresses in Athi River, Naivasha, Kawangware and Kasarani areas.

After five days in police custody, against the law that requires 24 hours before an accused is produced in court, the bloggers were released with warnings to keep off the affairs of the bank or its CEO.

As has been norm and true to type for the bank, they have over the years ensured that the reputation and name remains clean despite the fact that most of the practices are all against the norms of a proper banking operator.

One week later, it emerged that the bank’s CEO Gideon Muriuki had been cited for contempt after a company Orion East Africa accused Cooperative Bank of poor leadership role during the Initial Public Offer (IPO) in 2008.

The institution, at the heart of the country’s banking oligarchy has been fighting one accusation after another.

From steamy sex scandals, to nepotism, to officially tribalising the top echelons (90% of the managers at the bank are from one tribe – Kikuyu) and mounting customer complaints, they stand in the eye of any storm that engulfs the banking industry that is dominated by one community in the Kenyan kaleidoscope.

It is said and the social media has reported that a top official of the bank was involved in a nasty and juvenile sex scandal involving a family of a leading politician from Nyeri County that led to the breakup of the marriage.

Lurid stories have followed officials at the bank including a gift handed to a security sentry from a private firm employed at the headquarters. The female security is said to have been offered the irresistible car gift and what followed was transfer from the headquarters after she showed contempt to her seniors.

Another case of national importance is the issue of the Coop Bank IPO in which Muriuki transformed himself to instant billionaire status, riding on the backs of the poor and ignorant peasant farmers from Mt Kenya region.

One farmers sacco from the region estimates that its members lost close to Sh2.4 billion, making him an instant billionaire in the sweat of the farmers who were meekly defrauded on the altar of greed by those charged with performing diligent banking duties.

In a conspiracy of sorts, Muriuki spent merely Sh78 million to acquire 78,000,000 shares from the unsuspecting farmers as official records indicated that senior bank officials who had been earlier allocated the shares ‘sold’ the shares bought at Sh100 to Muriuki,

The same farmers are currently mad over news that some of those who took loans may lose their tracts of land after an alleged disappearances of the important documents. This writer is yet to get the exact amount of title deeds involved, but the number, within the banking industry is colossal.

Some farmers opine that Muriuki and ilk have been against the Coffee Sector Reforms Programme because of the lost documents, which will expose internal problems at the banking giant.

Through his investment vehicle, Gidjoy Investment an (acronym of Gideon and wife Joyce) the bank official has been involved in yet another fight with members of the Sowesava Selfhelp Group in Donholm Estate after colluding with Abigail Mukolwe, a former National Land Commission (NLC) vice chairperson to publish a Gazette Notice dated February 19, 2019 effectively, nullifying an earlier one by former chairman Mohammed Swazuri.

The piece of land has been a theatre of atrocity and human suffering after police from Buruburu Police Station deployed a station there. Many have been maimed or dragged to the courts for flimsy reasons. Officials of Sowesava have over the years alleged torture at the hands of the police guarding the tract of land, including the possible murder of former Orange Democratic Movement (ODM) National Youth leader Joseph Mukabana who was shot dead after an altercation at the venue of the protracted piece of land. His family point accusing fingers at those at war over the billion-shilling land.

Others have been blinded, crippled and even bear permanent scars from the fight over the land allegedly given to the squatters by former President Daniel arap Moi (deceased).

In June, Muriuki suffered a few days of social media negative publicity after twitter had him trending over the same piece of land, exposing his character at a personal level and the millions that he controls including use and abuse of state officials including police to punish those not in his good books. The matter was resolved after the influencers were paid Sh600,000 and completely silenced.

The other matter worth mentioning has been the deal to buy into non-performing Jamii Bora Bank which analysts were worried about due diligence done by Cooperative Bank which had in the past been hit by cases of fraud perpetrated by bank employees who work in cahoots with external persons to obtain money from the bank.

 The bank has been on the spot as having weaknesses in its IT systems, which was attributed to sources within the bank. It has reported erratic systems of poor quality and that explains for instance the constant system hitches.

 “The former bank chairman’s sons are said to have supplied IT systems to the bank. The same family have also been rumoured to be supplying and tendering with the bank,” says a former employee, sacked in 2017.

Malfunctioning systems have been reported on December 22, 2017 and the worst would be on July 22, 2014 when the systems failed leaving numerous customers stranded with all manner of complaints. There are those who found huge sums of money missing from their bank accounts, others could not access their funds, those whose payroll is processed by the bank had to wait for over 4 days to access their salaries.

Jamii Bora Bank had in the entire period of its existence remained stagnated, refusing to innovate and introduce any change in the banking industry.

The transaction required regulatory approval from the CBK, Capital Markets Authority and the Competition Authority of Kenya and in the tribal oligarchy and corruption perpetrated by Cooperative Bank management ensured that it was easy for CBK boss to give the nod at first sight of the application.

 The Nairobi Securities Exchange-listed Co-op commenced operations in 1965 and had the fourth highest market share (9.63 percent) in the banking industry. Jamii Bora, started in 2010 after the acquisition by City Finance Bank, and had a market share of 0.12 percent, putting it at position 38 out of 39 banks. The deal led to changes in market share as well as expansion of Cooperative bank branches.

Jamii Bora’s last published financials for the first quarter of 2018 when it had assets worth Sh12.5 billion. Its liquidity ratio was in negative 11.1 percent compared with CBK’s minimum of 20 percent as at end of March 2018, leaving it in liquidity deficiency of 31.1 percent.

In the past, Coop Bank has been accused of pummeling smaller banks and stagnating their growth, a case that was recorded in the acquisition of Spire Bank from Industrialist the late Naushad Merali in 2017.

The bank, bought by Mwalimu Sacco threatened the real existence of Coop Bank as the third biggest in the country and an immediate threat that most teachers in the country could have opened accounts there was going to be a real effect on the customer base.

“What is the CEO who is also the MD doing other than fighting over land, laundering money and getting embroiled in love scandals only to emerge the highest paid when customers get wanting services?” ponders a bank insider when asked about the conduct of its top management.

The insider intimated that the bank’s internal investigations have established a link between employees who know about malfunction in some of the bank’s IT systems and account holders who take advantage of the system.

While some of the cases have ended up in the court and others remain under police investigation, the bank, keen to protect its image, has hardly reported the full extent of the problem to authorities and has on occasions refrained from pressing charges against account-holders implicated in the fraud.

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