Top executives of the now-defunct Deloitte and Touché accounting firm were penalized by the Capital Markets Authority (CMA) for their suspected involvement in the 2015 sale of a Sh10 billion medium-term bond.
The regulator fined former Chase Bank managing director Duncan Kabui Sh5 million and barred him for ten years from serving as a director or key employee of any issuer in the Kenyan capital market.
Paul Njaga, a former CEO, and Ken Obimbo, a finance director, are both anticipated to pay a similar amount and serve a five-year suspension from trading on the Kenyan stock market.
“In line with its investor protection mandate, the CMA has taken enforcement action against former board members, senior management of Chase Bank Kenya Limited (CBKL) (the MTN Issuer) and CBKL reporting Accountant for their role in the issuance and use of MTN in 2015,” said CMA in a statement.
Further, CMA also penalized board members including Laurent Demey Rafiq Sharif, Muthoni Kuria and Anthony Gross a sum of Sh2.5 million each for their role in the issuance and use of the bond.
The above four were members of the audit and risk committee. Additionally, Gross has been ordered to attend corporate governance training for a minimum of five days.
“Deloitte and Touché, the CBKL reporting accountant at the material time have been fined Sh10 million. Further, the Committee recommends that the conduct of the accounting partners during the respective audit periods be referred matters be taken up by ICPAK,” Read a part of a statement by CMA.
Early this year, CMA investigations found that Deloitte’s annual audits of Chase Firm did not include a check of the collapsed lender’s IT system, leaving a gap that the bank’s management utilized to conceal information about billions of shillings that were embezzled from the bank.
After extensive fraud including insider loans of more than Sh13.62 billion issued to directors, owners, staff, and allies were uncovered at the bank, Chase Bank collapsed in 2016 under the weight of huge withdrawals from depositors.
The bank failed After receiving Sh4.8 billion from creditors as part of a Sh10 billion bond issuance.