Chase Bank Kenya Executives Resign After Earnings Restatedby
Lender says deposits are safe as auditors qualify results
Chairman, managing director to `step aside,' Chase says
Chase Bank Kenya Ltd., a closely held lender, assured customers their deposits are safe as the company’s chairman and managing director resigned after financial results issued last week were restated to show loans to directors and employees more than quadrupled.
Chairman Zafrullah Khan and Managing Director Duncan Kabui “have stepped aside” from their positions following the release of the company’s 2015 earnings, the Nairobi-based lender said in an e-mailed statement on Wednesday, without giving reasons for the changes. The latest results received a qualified opinion from auditors Deloitte & Touche.
“The board would like to reassure all its customers, partners and the general public that Chase Bank is a strong, sound and transparent institution that has operated in Kenya for the last 20 years,” Chase said in the statement. The lender is aware of “malicious and irresponsible” comments circulating on social-media platforms, it said in a separate statement on its Twitter account, referring to remarks of panic withdrawals by account holders.
Chase Bank earlier on Wednesday published results in the Nairobi-based Standard newspaper showing total contingent liabilities of 26.6 billion shillings ($263 million) as of Dec. 31, 2015, compared with 13.2 billion shillings in 2014. On March 31, it reported liabilities of 13.2 billion shillings versus 25.8 billion shillings a year earlier. Loans to employees and directors in 2016 amounted to 13.6 billion shillings versus the 3.24 billion shillings reported last week.
Kenyan central bank spokesman Samson Burgei didn’t immediately respond to an e-mailed request for comment. Chase Bank Chief Executive Officer Paul Njaga didn’t answer calls to his mobile phone.
Muthoni Kuria, who has served on Chase Bank’s board for more than three years, has been appointed as chairwoman, the lender said. Njaga will continue as CEO, a position he has held since December 2014.
“The shareholders of the bank who count among the world’s leading institutional investors from Germany, France and Switzerland have fully supported the changes, and remain committed to the partnership with the bank,” Chase said. “We would like to reassure the general public that our customers’ funds and investments are safe.”