Ouko doubts KPA will recover Sh3bn held in Chase Bank - Daily Nation

Ouko doubts KPA will recover Sh3bn held in Chase Bank

Wednesday January 3 2018

Chase Bank on Mama Ngina Street in Nairobi on April 7,2016, shortly after it was placed under statutory management. file photo | nmg

Chase Bank on Mama Ngina Street in Nairobi on April 7,2016, shortly after it was placed under statutory management. file photo | nmg 

By EDWIN MUTAI
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Auditor-General Edward Ouko has raised doubts over whether Kenya Ports Authority (KPA) can recover Sh3 billion it deposited in Chase Bank four months before it was placed under receivership in April 2016.

Mr Ouko said it remains unclear whether the KPA would recover the billions placed in fixed deposits as the Central Bank of Kenya seeks a buyer to revive the bank.

“Under the circumstance, it is not possible to confirm recoverability of the short-term deposits totalling to Sh2,957,000,000 invested in Chase Bank as at June 30, 2016,” he said in a qualified audit opinion of the KPA books of accounts dated July 7, 2017. The fixed deposits have matured.

Regulators placed the mid-sized Chase Bank under receivership in April 2016 after an unexplained loss of billions of shillings.

Mr Ouko said the KPA financial statements reflect short-term deposits balance of Sh12,540,442,000 in the year under review, an increase of Sh3,302,558,000 from the balance of Sh9,237,887,000 in the year to June 30, 2015.

The bank was reopened after a brief closure and depositors allowed to access up to Sh1 million.

This means that KPA has access to up to Sh1 million but an investigation by the Public Investments Committee (PIC) revealed that the State agency has been earning zero interest for the billions which have been tied up in the lender’s accounts despite the bank having reopened its doors.

Catherine Mturi-Wairi, KPA managing director, last year told the PIC that the failure by the authority to access the Sh2.95 billion had impacted negatively on its projects.

The PIC in its investigations established that the KPA flouted the Treasury circular instructing all State corporations to invest surplus funds in Treasury bills and bonds.

The MPs said the KPA identified and opened 10 deposit accounts at various commercial banks in contravention of the Treasury circular No 10 of July 1992 and No 2 of February 1998.