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CBK says no Eurobond money was lost through foreign banks

Wednesday January 27 2016

The Central Bank of Kenya. CBK has cautioned banks that giving loans to counties without a guarantee from the national government is against the law. FILE PHOTO | NATION MEDIA GROUP

The Central Bank of Kenya. FILE PHOTO | NATION MEDIA GROUP 

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The Central Bank of Kenya has for the second time defended its officials against allegations of theft of Eurobond funds.

The bank which also sought to absolve its chairman Mohammed Nyaoga from the saga said it had provided relevant documents to the investigating agencies and that Mr Nyaoga had "no access to or participation in the Eurobond matter."

The bank in an advert in the dailies said "the allegations that CBK officials were involved in any misappropriation of these funds has no basis and is erroneous,"

The Central Bank of Kenya (CBK) says every shilling of the Eurobond proceeds can be accounted for until it hit the account it operates for the government in the country.

In a published advertisement in the dailies, CBK has outlined the paper trail demonstrating the process of banking for the country.

The bank said it booked $1,999,074,304.62 in Eurobond receipts on June 26, 2014, after adding interest income and bank charges and payment of syndicated loan the balance was $1,394,492,135.47. The first draw down by treasury on July 3rd 2014 left $999,052,872.97 in the account. The second draw down on September 8th 2014 of $999,018,457.6 which includes bank charges and interest income completely emptied the account.


The Treasury again drew $815,463,932.00 on December 17, 2014 which were proceeds from the tap sale.


Coalition for Reforms and Democracy (Cord) leader Raila Odinga had claimed that Sh87 billion ($999 million) was wired to the Federal Reserve Bank of New York from JP Morgan, the lead manager and could not be traced.

“It’s crystal clear that after the money is moved to the Federal Reserve Bank of New York from the Bank account at JP Morgan Chase Bank, New York, everything goes blank, as there are no bank statements or third party documentary evidence to show how, when and where the $999,052,872.97, equivalent to Sh87,766,528,223.47, moved,” Mr Odinga said.

Mr Odinga had said according to the JP Morgan Chase Bank New York Bank's statement, the account was then closed on September 8, 2014, and the balance transferred in full to the Federal Reserve Bank of New York.

He said the swift transfer to the Fed shows the document was heavily redacted, clearly hiding information that could have been vital to tracing the movement of the money after it was deposited into the account at the Federal Reserve Bank of New York.

CBK Governor Patrick Njoroge said that once they bought the dollars from the government, it was CBK’s business with what to do with the money.