Central Bank of Kenya advised State Bank of Mauritius (SBM) to acquire Fidelity Bank in an apparent scheme to cover up the tracks of fishing family that brought down Imperial Bank, Money and Markets can now reveal.
A notice published in Kenya Gazette on Friday has blown the cover on the mysterious relationship between directors of W.E Tilley and directors of Fidelity Bank.
We can now reveal that the Jessa family which owns W.E Tilley has substantial shareholding at Fidelity Bank, one of the banks it used as a conduit to siphon money from Imperial Bank.
According to the notice, Firoz Jessa who has been named as the architect of the Sh38 billion fraud at Imperial Bank has rejected the offer to relinquish his shareholding in Fidelity Bank to SBM.
“SBM has not received acceptance to the offer from Firoz Haiderali Jessa. The outstanding shareholders are hereby notified that SBM has commenced the process of compulsorily acquiring the remaining 4.91 percent of the entire issued capital in Fidelity Bank,” said the Mauritius bank in the Gazette.
In essence, what this fresh information shows is that CBK was not just involved in the theft of depositors funds at Imperial Bank but it is actively helping Jessa family hide the funds stolen from the bank.
A forensic report commissioned by Imperial Bank directors showed that W.E Tilley transferred part of the loot from the bank to Fidelity Bank in the same year the Sh38 billion fraud was discovered.
However, CBK and Kenya Deposit Insurance Corporation (KDIC) have been reluctant to recover Sh3billion that was transferred from Imperial Bank to Fidelity Bank. KDIC is the receiver manager at Imperial Bank.
A month after Imperial Bank was placed under receiver, a depositor transferred Sh3.3billion from Fidelity Bank plunging the bank in a liquidity crisis. Before the transfer, Jessa family was the biggest depositor at Fidelity Bank holding 25 percent of the bank’s liabilities.
CBK did not raise an eyebrow on this curious transfer. Instead, the banking regulator pumped in Sh1.7 billion into the bank to keep it afloat. Last year it approved SBM acquisition of all the bank’s shareholding by SBM for Sh100, just a few months after it had approved acquisition of an undisclosed equity stake at the same bank by UK private equity fund Duet for Sh1.9 billion.
The apex bank has kept Fidelity Bank shareholding close to its chest. Last week, CBK governor Patrick Njoroge told journalists interested in information on Fidelity Bank shareholding to go and ask the directors of the bank.
“I cannot give you that information. If you want to know the shareholders you will have to go and ask Fidelity Bank directors,” said Njoroge in a press conference a day after the Monetary Policy committee meeting.
He was responding to a reporter who had asked him to provide a list of all Fidelity Bank shareholders.
Instructively, SBM had initially expressed interest in acquisition of Imperial Bank, just 13 days after it was placed under receivership.
“Without any commitment on our part, we would like to express our interest to assist in the restructuring of Imperial Bank Ltd, subject to the approval of the board of SBM Holding Ltd as well as relevant regulators and our mutual agreements on the terms of such assistance,” said SBM in a confidential letter.
However Njoroge flatly rejected the offer from the Mauritius bank. Instead, he directed the Mauritius bank to Fidelity Bank. The governor also rejected the offers from Imperial Bank’s large depositors as well as from I&M Holdings.