Fresh probe into Consolidated Bank saga

The controversy surrounding the appointment of the new chief executive officer of State-owned Consolidated Bank took another turn when the Office of the Deputy President ordered an investigation into the process.

The Inspectorate of State Corporations, based in the DP’s office, has sent two top officials, Ms Theodora Gichana, a senior assistant inspector-general, and a Mr Waweru, an assistant inspector-general, to conduct a special investigation into the recruitment of Mr Geoffrey Ndambuki as the bank’s managing director.

Mr Ndambuki, who has yet to assume office six months after being named to the position, has sued the bank’s board of directors for failing to give him an appointment letter.

But his credibility has been questioned  after it emerged that he had been blacklisted as a debtor by the same bank he sought to head. Consolidated Bank was also among the banks that had reported him to the Credit Reference Bureau as an alleged bad debtor.

Bank documents describe Mr Ndambuki’s credit score as “poor”, which goes against a key requirement for appointment to a senior position.
When Sunday Nation broke the story in February, Treasury Secretary Henry Rotich said the Central Bank had advised him to appoint Mr Ndambuki to head the bank after carrying out necessary background research. The CBK denied that claim.

Doubts had been raised over the recruitment process after documents indicated the board had not been properly constituted as it lacked a quorum only three board members sat at the special meeting of directors held May 17, 2013, while bank rules require a minimum of four directors to pass a resolution.

After the issue became public, Mr Rotich went ahead to appoint new board members. In Gazette notice No 1055, Mr Rotich appointed Ms Bertha Joseph Dena, Mr Charles Mbagaya Amira, Mr Evans Galava Vitisia, Ms Miriam Ceremony and Mr Papius Kirongothy Muhindi as directors starting February 3, 2014. 

In the latest twist, Mr Titus Muriithi, signing on behalf of the Inspector-General of State Corporations, seeks details and documents from the DP’s office of the process leading to the recruitment of the new managing director.

Appointed new board

According to documents seen by the Sunday Nation, Mr Ndambuki is said to have scored higher than Mr Thomas Kiyai, Mr Kennedy Ouko and Mr George Rutto, among others, in the interviews leading to his appointment.

“You are requested to forward the board resolution approving the best three candidates and a copy of the letter forwarding three names to the parent (National Treasury) ministry,” says the letter dated May 30, 2014.

Mr Ndambuki is a career banker who has worked for Co-operative, Gulf and Equity banks. Mr Rutto is the bank’s Head of Internal Audit.
The bank’s board is chaired by Dr Benson Ateng’, who in January replaced Dr D Mugo, while Mr Japheth Kisilu is listed as the acting managing director on the bank’s website. Mr Kisilu has more than 20 years experience in banking.

The letter asks for the minutes which authorised the advertisement of the position of managing director and the appointment of acting managing director, as well as the board minutes for the interviews conducted. Also required is list of applicantions received, the list of shortlisted candidates and the board minutes approving the same.

Further, the committee wants minutes indicating the discussion of the correspondence from the parent ministry (Treasury) on the appointment of the managing director. The unit is also seeking access to the file that contains specimen questions, scored sheets and a summary report of candidates’ ratings.

The committee also wants a statement from the chair of the board on the status of the matter.

“Please expedite the process to enable the finalisation of the investigation,” the letter reads.

The bank, along with the Industrial Development Bank, are proposed for merger as part of restructuring under the ongoing parastatal reforms. The two, along with National Bank, have previously been lined up for sale along with 23 other state firms before that process lost steam.