By Maurice Maliosi
Through the existence of Kenya’s third biggest bank, Cooperative Bank of Kenya the glossy story has run with a backtrack of tribalism in its management, an insider trading during its IPO that has refused to go, a litany of complaints in the social media and an entrenched bribery scheme to suppress the country’s media.
Many times, the talk about the IPO on 2008 has dominated financial industry talks with an element of deep corruption among the management who have over the last decade become multi-millionaires from the single act of manipulation of figures
The insider trading in shares of the bank, ruthlessly buying out struggling investors and doing other crimes the sort of which will never go unpunished. By pulling off these crimes, he became the single biggest shareholder in the bank.
In a shrewd maneuver, Muriuki has at last bulldozed the establishment of Kingdom Bank as a subsidiary of Co-operative Bank, a fit he tried some years back, but top government officials who had gotten wind of his secret arrangement to sneakily make it independent and convert it into his personal Bank stopped him.
The recent acquisition of Jamii Bora Bank as a subsidiary of Co-operative Bank and its swift renaming as Kingdom Bank is the culmination of a long pursuit in Muriuki’s struggle to exploit his incumbency at Kenya’s third-largest bank to establish a new bank to which to retire on leaving the Cooperative Bank.
But still the acquisition of the poorest commercial bank in the country should have raised eyebrows to many, but, as usual, the tribal cartel that runs banks in the country turned a blind eye. Jamii Bora was a bad move and should be called so.
Investigations trace this fraud to the immediate aftermath of the exit of former long-serving Chairman Hosea Kiplagat and his predecessor CEO Erastus Mureithi when Muriuki toyed with the idea of taking advantage of the Bank’s shaky financial base, almost being thrown into insolvency, to acquire it for himself with the help of his foreign friends who could pump in money if he acquired it and ran it in partnership with them.
Way back in 1998, the bank employees were caught out after they were involved in a major fraud game after they claimed to have been hurt in the terrorist attack at the American embassy that sat next to the bank headquarters. Through a scheme to defraud the American government, the employees filled claim forms that ran into millions from one doctor. Most affected were sacked by the bank, but the reputation was tarred then.
But the scheme could have ended up being a major international money laundering scandal. At the time the idea was to capture Co-operative Bank itself, privatize it and rename it Kingdom Bank.
Despite having compromised the then Board Chairman Stanley Muriithi, pressure from those opposed to the plan prevailed.
Muriithi on the other hand, did not leave the stage a clean man. IN his dirty trail were accusations about single sourcing of major projects to his family. His sons are said to own a construction company that was awarded multi-million shilling jobs across the country, a clear conflict of interest. One of Muriithi’s sons currently supplies the back with IT accessories in a single-sourced contract that many people within the bank have many times questioned unsuccessfully.
Unknown to many Kenyans, the often-hyped claim that Muriuki single-handedly worked miracles to revive the bank, which had been left in the red by the Kiplagat – Mureithi leadership, is a white lie and self-aggrandizement for image laundry purposes.
Muriuki has however spent millions in Kenya’s mainstream press to launder his image.
Not to lose the idea of using the Cooperative Bank to craft Kingdom Bank as a private financial institution, Muriuki had craftily set up Kingdom Securities as one of the subsidiaries of the Cooperative Bank to be trading in stocks at the NSE.
Insiders reveal that apart from packing the management and all strategic jobs with his relatives and cronies, Muriuki started off Kingdom Securities as a personal agency.
When the government-propelled success came to the Cooperative Bank, he pushed Kingdom Securities into over drive to become profitable. But one sneaky arrangement, which is spoken of in murmurs, is his maneuvering to be buying of the special category of shares of Cooperative Bank restricted to Cooperative Societies.
Because of the structure of the shares, many Saccos who got them have been stuck with them as dead stock and all their efforts to sell them off have been impossible. Capitalizing on the desperation and being a secret shareholder, Muriuki has been sneaking in on such desperate sellers and acquiring the shares at throw away prices thus pilling up his strategically hidden shareholding, hence his unassailable level as the single most individual shareholder in Co-operative Bank.
Cooperative Bank insiders keenly following the establishment of Kingdom Bank cite the appointment of Muriuki’s relatives and cronies, and 99% from his ethnicity as the clearest sign that they have an assignment to execute a dirty scheme, which requires utmost loyalty to the master and confidentiality to conclusion.
Fraud has not been far from the mention of Cooperative Bank. A customer, Anthony Kimani Chege, who operated Account Number 01109127579300 at the Nairobi Business Center Branch, went to court in May 2011 to press for Sh14 million the bank had deposited in his account through the fictitious betting wins but which the bank discovered and froze before he could withdraw the money.
The account-holder used his debit card No.4407830011038792 for gambling on-line.
He went to court seeking orders for Coop Bank to be compelled to un-freeze his account and release him the Sh4,829,969.15 being the credit in his account when it was frozen. While he lost the case, the hearing unearthed massive impropriety on Coop Bank staff members and negligence from senior management that refused to take action for months according to the court.
Investigations by the bank’s security department showed that Chege was one of seven account holders who all opened their accounts at the same branch, having been introduced by one employee of the bank. The bank found that some its employees were aware of the malfunction in the IT systems and had encouraged account holders to take advantage of the system of it. While the employees were identified, some were not punished. Ostensibly, the web is intricate and some employees eat with senior bank staff.
Muriuki is said to be close to most business editors in the country who make a beeline at the offices whenever there is media event. Through the same media, the bank has used its financial muscle to kill PR events for other banks and in actual fact, everything that is against the bank is silenced at the by the CEO’s office.
In 2019, a major sex scandal broke out within the bank after information filtered through its system that an employee of the bank, previously associated with a governor in one of the Mt Kenya counties was in a relationship with one of the senior managers. The information, like the insider trading has refused to die.
Almost immediately, another senior manager at the bank was said to be in a serious sexual relationship with a woman security guard from a contracted firm. It is said that the senior manager formed a habit of gifting the poor lady with cash token when he passed through the entrance at the bank headquarters. Overtime, the innocent glances and greeting changed into something totally different and a relationship brewed, something that nearly resulted in a marriage breakup. Details of this is available.
Read my next story about the controversial land deals surrounding Muriuki: Land Baron – Questionable Sowesava and La Nyavu scams
The writer is a blooger who comments on social issues