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"id": 245601,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/245601/?format=api",
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"type": "speech",
"speaker_name": "Mr. Kimunya",
"speaker_title": "The Minister for Finance",
"speaker": {
"id": 174,
"legal_name": "Amos Muhinga Kimunya",
"slug": "amos-kimunya"
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"content": " Mr. Deputy Speaker, Sir, I beg the indulgence of the House, to clarify certain matters relating to Charterhouse Bank as a result of documents that were laid on the Table of this House by an hon. Member, and the subsequent allegations that have been made. The media reports and the different statements that have been made about Charterhouse Bank have created the impression that (a) The charges facing the former Governor of Central Bank of Kenya, Dr. Andrew Mullei, are as a result of his efforts to bring to a halt tax evasion, money laundering and other related offences by Charterhouse Bank and other related companies; and, (b) That the Government has been reluctant to act on the findings of the investigations. Accordingly, I wish to set the record straight on this very important national issue as follows. On 15th December, 2004, an inter-agencies task force investigating economic crimes by Charterhouse Bank wrote to the former Central Bank Governor and informed him that the institution was complacent in money laundering and abetting tax evasion and breaches of rules and regulations. The former Governor responded on the 22nd December, 2004 advising the Kenya Anti-Corruption Commission (KACC) to seek the Attorney-General's opinion with respect to powers to deal with such problems. He, however, said that he would take up the KACC comments on matters relating to Charterhouse Bank's compliance with the relevant provisions. Both the KACC and the Kenya Revenue Authority continued with investigations into the matter against the mentioned firms that had accounts with the Charterhouse Bank. The investigations are at different stages of completion and appropriate action will be taken when they are finalised. I wish to request the House to respect the confidentiality of the investigations in order to protect the outcome from unnecessary interference. In regard to the investigation and the prosecution of the Governor, the facts are as follows. Investigations commenced in June, 2005, under the sole initiative of the KACC, based on the information received. The investigations were concluded on 21st February, 2006 and the file was forwarded to the Attorney-General with recommendations to prosecute the former Governor 1686 PARLIAMENTARY DEBATES June 28, 2006 on four counts of abuse of office. The Attorney-General approved the charging of the Governor on 22nd March, 2006. The letter from the Governor to me - and it was tabled here - on the status of Charterhouse investigations in which he requested the withdrawal of the licence was done on 20th March, 2006. That is exactly one month after the Kenya Anti-Corruption Commission (KACC) investigation file was sent to the Attorney-General. It was just two days before the Attorney- General approved the recommendation to charge the Governor. Mr. Deputy Speaker, Sir, hon. Members may wish to note that in April and July, 2005, the Governor made a recommendation for the renewal of the bank's licence, and opening of a new branch at Nakumatt Supermarket in Nairobi, on grounds that the overall financial co-ordinations of the bank were satisfactory and the bank was fully compliant with the requirements of the Banking Act and the Central Bank of Kenya Prudential Regulations. Based on the chronology of those events, it is clear that:- First, the charging of Dr. Mullei in court and his subsequent suspension is based on specific charges that have absolutely nothing to do with his stand on the Charterhouse Bank. Secondly, Dr. Mullei did not act on the recommendations of the Inter-Agency Task Force that were given to him to take action against Charterhouse Bank for one year and three months. As late as 16th January, 2006, the Governor recommended the renewal of the bank's licence on the basis that the institution had maintained a sound financial condition over the years, and is compliant with the Banking Act and Central Bank Prudential Regulations. Mr. Deputy Speaker, Sir, the Governor wrote to me on the eve of being charged in court. Following the receipt of that letter of 20th March, 2006, and looking at the gap between the completion of the investigations, the tabling of this letter and the intervening circumstances in between, I directed the CBK to send a team to Charterhouse Bank to update the status of the report between 2004 and March, 2006. That Report was completed and given to the managers of Charterhouse Bank on 21st June, 2006, to give their comments in accordance with the existing procedures. They are expected to give their reports next week, that is on 4th July, 2006. While awaiting that response, a leaked copy of the letter of 24th which was given to me by the Governor was tabled in this House. The tabling of that letter and the allegations that were made thereafter have caused unnecessary panic in the banking sector. In order to protect the interests of depositors, the bank and the entire financial system, I regrettably had to approve the appointment of a Statutory Manager for Charterhouse Bank on 22nd June, 2006. He moved in the next day - 23rd June, 2006. Mr. Deputy Speaker, Sir, I trust that hon. Members and the public are now well informed about that matter. I hope that we will take our responsibilities seriously and avoid making any allegations that would lead to the collapse of the economy in this country."
}