House can censure CBK boss over Charterhouse Bank, says Githae

Finance minister Njeru Githae has asked Parliament to decide whether it will censure Central Bank Governor Njuguna Ndung’u over his failure to reopen Charterhouse Bank that was closed seven years ago.

Speaking in Parliament Thursday, the minister said he’d written to the CBK boss telling him that Parliament had resolved to have the bank reopened, after a parliamentary inquest found out that the allegations of money-laundering and tax-evasion against the bank were unsustainable.

“I believe this House is not powerless. You can censure any officer,” said Mr Githae.

He told MPs that he’d submitted the details of the parliamentary resolution to have the bank reopened to the Central Bank, plus copies of the Hansard with details of the debate, to guide the governor in implementing the decision of the House.

The resolution of Parliament was made on December 9, 2010.

The minister said he had no powers to order the Central Bank to reopen the bank because the Constitution guarantees the independence of the CBK.

“The Central Bank of Kenya shall not be under the direction or control of any person or authority in the exercise of its powers or in the performance of its functions,” reads article 231(3) of the Constitution.

Mr Githae said Attorney General Githu Muigai had warned him not to direct the Central Bank.

“If I had the power, I’d have ordered and instructed the Central Bank to reopen the Charterhouse Bank, but I don’t have the power,” said Mr Githae.

MPs said the House committee on Finance, which investigated the circumstances on the closure of the bank had gone through all the records and listened to the evidence but found no reason why the bank stayed closed.

MPs Harun Mwau (Kilome), Charles Kilonzo (Yatta), Isaac Ruto (Chepalungu) raised the matter in the House, saying those who had banked with Charterhouse were suffering, because their deposits had been frozen with the closure of the bank.