Forget hullabaloo, Njoroge broke law

For two consecutive weeks, the Sunday Nation published articles on the alleged trials and tribulations of the Governor of Central Bank of Kenya Patrick Njoroge.

The thrust of the articles is that the governor is under siege, being fought by dark and stealth forces annoyed by his no-nonsense approach to banking.

The articles also create the impression that those who are alleged to be fighting him have an endangered interest to protect in banking.

The articles are rich in innuendo and scant on relevant facts.

But the defining feature of the articles is painting a flattering image of the governor, failing to hide their true purport as plainly a public relations exercise.

Concomitantly, it casts in bad light those individuals the newspaper targets as fighting the governor.

Because the articles mentioned me and cast me as a member of a group of individuals that are fighting Dr Njoroge, this is my perspective on the issues.

In my view, the articles are deliberate sideshows designed to hoodwink Kenyans and desperately hide the real issues that have enveloped and engulfed the governor.

The germane issues I have variously raised are in the public domain.

Dr Njoroge was employed competitively 18 months ago by a panel constituted by the President.

The panel handed over a shortlist of three candidates.

We all know that Dr Njoroge was not the first or even second best candidate.

As to why the best candidate wasn’t picked by the President, we don’t have to whine in this article.

Suffice to say that we all know the cherished place of ethnicity in our country’s realpolitik.

THE ISSUES
There is no doubt that Dr Njoroge has an impeccable academic record.

A doctorate in economics from Yale University and some experience with the International Monetary Fund placed him in good stead.

This, coupled with unimpeachable personal integrity, gave him a head-start in his new job.

Dr Njoroge was never accused of financial corruption and Kenyans are in total agreement that he is truly a man of God.

But that isn’t the issue at hand. The raging debate is whether Dr Njoroge broke the law and acted recklessly with regard to certain decisions he made.

It is not in doubt that Dr Njoroge is having a turbulent tenure as Central Bank governor.

During his tenure, he has closed three banks and engineered the dismissal of the top echelons of National Bank of Kenya.

As a lawyer deeply involved in litigations touching on the governor’s action and who is alive to the rule of sub-judice, I give a wide berth to these cases.

But some of the issues the governor and his public relations brigade have no answers to and which raise profound issues are as follows:

First, Governor Njoroge’s defining philosophy is that he rightly insisted from day one on the need to enhance corporate governance in banking.

He has also insisted on total fidelity to the law.

It is this bipolar policy that he is accused of breaching and to which he must be held to account.

Dr Njoroge is simply being accused of wantonly breaching the very values and principles he holds other players in banking to.

Second, it is a common ground that for 18 months Central Bank was without a board of directors.

True, it is the President that appoints the board and Dr Njoroge has no say in the matter.

But apologists of the governor should tell it to the birds that the President flatly refused to appoint the board despite Dr Njoroge’s passionate plea or show Kenyans any representation the governor made on the need to appoint a board.

BANK CLOSURES
That Central Bank for 18 months was without a board of directors is criminal negligence on the part of Dr Njoroge.

That the governor did not even for a day lament against that state of affairs is a matter of public record.

That he tried to run the bank without a board of directors shows his true appreciation of what corporate governance entails.

How can a governor who does not adhere to corporate governance enforce the same against industry players?

Third, the governor relished and indeed flourished in the absence of the board.

It gave him absolute powers over both Central Bank and in banking. It allowed him to play god.

And like all false gods, he made huge mistakes and blundered big time.

It is these mistakes and blunders he made without board guidance that he is being questioned upon.

Four, there is a fundamental legal distinction in the Central Bank Act and the Banking Act on the powers and functions of a trinity of institutions that are the governor, the board and bank as a corporate body.

These three entities have distinct powers under the law.

It is not in doubt that in the absence of the board, Dr Njoroge failed to appreciate the distinction of offices and institutions, merged them into one and acted as that one.

Five, who closed Imperial Bank, Chase Bank and Dubai Bank?

Is it Governor Njoroge or Central Bank authorised by the board?

Since there was no board, where in the law did Dr Njoroge get the powers to close banks?

The closure of the banks symbolises the issues facing the governor and underscores the real issues that need urgent national debate.

Millions of Kenyans are suffering as a result of the closure of the three banks and are asking the same questions.

SIGNIFICANCE OF TRIBE
Lastly, it is a matter of public record that for 18 months the governor has authorised huge expenditure in Central Bank.

The records of these expenditures are there for Kenyans to see and scrutinise.

These expenditures were not budgeted for, deliberated upon or approved by the board.

Instead, the governor, acting as the board, authorised the expenditure.

Section 13 of the Central Bank Act expressly limits the power of the governor to incur any expenses and subjects all his expenditure to prior board approval.

Nobody is fighting or finishing Dr Njoroge. People like myself are simply subjecting his actions and omission to the law of the land.

He brought about the facts himself and Kenyans are entitled to question whether or not Dr Njoroge has acted in breach of the law.

This is a dogfight between Dr Njoroge and the law and I, for one, have no dog in the fight!

I have written on what I call primary and secondary tribes in Kenya’s tribally stratified society.

Primary tribes control the levers of power while secondary tribes are their subjects.

In enforcing the law, the tribal category you belong to determines whether or not you face the law.

Members of the primary tribes enjoy immunity while members of the secondary tribes will be charged in court for the most innocuous tender procurement transgression.

We know Dr Njoroge was given the job as a member of a primary tribe.

But is the Sunday Nation propounding a tribal supremacy philosophy that a member of a primary tribe cannot be questioned when he abuses his office?

The writer is a Senior Counsel