Insiders at Cooperative Bank are angry with the establishment of Kingdom Bank which is a subsidiary of the Bank.
They told Hot News that money belonging to Cooperative Bank is being diverted to fund the subsidiary at the expense of developing the mother Bank.
The insiders blamed the Bank management led by current MD Gideon Muriuki.
They want the Central Bank to intervene and save millions of Kenyans their cash.
They said Cooperative MD Gideon Muriuki is the single largest shareholder in cooperative Bank and that he is making decisions that favor him and not the Bank.
To vent their anger, the Insiders have been leaking crucial bank information on social media.
They said efforts to establish Kingdom in the past had been stopped by the Kibaki regime.
The insiders said the recent acquisition of Jamii Bora Bank as a subsidiary of Co-operative Bank and its swift renaming as Kingdom Bank raises questions on the management of the Bank.
“We know that after having served for long in the Banking Industry, Muriuki wants to establish a new bank to which he will retire after leaving Cooperative Bank,” said an insider who sought anonymity.
The insiders went on to say that after the exit of former long-serving Chairman Hosea Kiplagat and his predecessor CEO Erastus Mureithi , Muriuki initiated the idea of establishing Kingdom Bank.
“But the scheme could have ended up being a major international money laundering scandal. At the time, the idea was to capture Co-operative Bank itself, privatize it and rename it Kingdom Bank. Despite having compromised the then Board Chairman Stanley Muriithi, pressure from those opposed to the plan prevailed” they said.
Highly placed sources revealed that the scheme was nipped in the bud by alarmed Co-operative Bank Board Members and managements of various major Cooperative Societies (Saccos).
The SACCOs rightfully feared that the bank which is their most strategic investment was going to be snatched from them.
Instead they compelled Muriuki to restrict himself to seeking Government bailouts.
Through the government assistance spearheaded by then ministers Karisa Maitha (Local Government), Njeru Ndwiga (Co-operatives), Kipruto Arap Kirwa (Agriculture) and David Mwiraria (Finance), many government entities were forced to transfer all their major transaction accounts:- eg- employee Salaries (Local authorities’ workers, Agricultural and Co-operatives salary accounts etc), parastatal salaries and procurement deals accounts and many others to Co-operative Bank.
Most affected by this bold move were President Moi’s established Banks, Kenya Commercial Bank, National Bank and Transnational Bank.
With this policy change, they lost thousands of active transaction accounts to Co-Op Bank, hence massive business, and profits all which went to Co-operative Bank.
This helped Co-operative bank to bounce back into massive profitability unmatched.
This period coincided with increased activities by the Cooperative Bank to cement its position in the listing at the then National Stock Exchange (Today’s Nairobi Securities Exchange – NSE).
Not to lose the idea of using the Cooperative Bank to craft Kingdom Bank as a private financial institution, Muriuki had allegedly craftily set up Kingdom Securities as one of the subsidiaries of the Cooperative Bank to be trading in stocks at the NSE.
Insiders reveal that apart from packing the management and all strategic jobs with his relatives and cronies, Muriuki started off Kingdom Securities as a personal agency.
When the government propelled success came to the Cooperative Bank, he pushed Kingdom Securities into overdrive to become profitable.
But one sneaky arrangement which is spoken of in murmurs is his maneuvering to be buying of the special category of shares of Cooperative Bank restricted to Cooperative Societies.
Because of the structure of the shares, many Saccos who got them have been stuck with them as dead stock and all their efforts to sell them off have been impossible.
Capitalizing on the desperation and being a secret shareholder, I siders say Muriuki has been sneaking in on such desperate sellers and acquiring the shares at throw away prices thus pilling up his strategically hidden shareholding, hence his unassailable level as the single most individual shareholder in Co-operative Bank.
The Capital Markets Authority (CMA) at one time launched investigations into Muriuki’s complicity and culpability in this criminal racket of insider trading which could have led to throwing out of Cooperative Bank and Kingdom Securities from the NSE listing and trading, but the matter died.
The insiders added that Muriuki since he had done everything in preparation including purging the Cooperative Bank Board of Management of all independent minded directors and brought on board sycophants and cronies led by One M ’Cloud Malonza, long serving Harambee Sacco boss.
The insiders said that Joseph Kinyua, the Head of Public Service, who had encountered this matter many times earlier when he served as the Permanent Secretary at the Ministry of Finance is determined the save Kenyans their millions.
However, Muriuki finally pulled off the deal disguised as setting up a subsidiary for Cooperative Bank.
Sources have revealed that he also capitalized on the recent chain of bank acquisitions by peers: – KCB and President Uhuru Family’s Commercial Bank of Africa.
“In the latest script which appears unstoppable now unless State House Intervenes, Muriuki will engineer the diversion of over 80% of Co-operative Bank business and lucrative accounts to the new Kingdom Bank disguised as in-house adjustments then use the current highly subservient Board of Directors of Cooperative Bank to allow Kingdom Bank to go solo and leave the mother bank a shell like he found it,” an insider said.
Insiders added that some of the Board of Directors have been promised to swap for better pay as directors at Kingdom Bank once successfully delinked.
Others have been promised supplies contracts and other personal benefits if they cooperate.
They added that Kingdom Bank employees are mostly from Muruikis ethnic community.
Muriuki did not respond to text messages and phone calls when reached for comment.
ALSO READ: HotNews – We tell the stories others are afraid of telling