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Spire Bank CEO Onesmus Muia accused of fraud and money laundering

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Was the bank slogan “Inspiring you to do more” actually inspired the acting Spire Bank CEO Onesmus Muia to do MORE? Well, it is said that the Spire Bank acting Chief Executive officer Onesmus Muia hired police officers from Ruiru to track down, intimidate and threaten two human rights activists, Alex Maina and Eric Omeny, who blew whistle on his alleged insider fraud at the Spire bank.

The two activists being harassed had prepared a dossier detailing how Muia colludes with law firms to defraud Spire Bank.

According to the activists, Muia colludes with the said law firms to raise fictitious legal fees against the bank and then promptly pays the claims.

The law firm then sends the money to Muia’s personal dollar account at Family Bank, Ruiru Branch.

As of last week, the account had 758,261 dollars (about Shs 80 million).

Muia is in acting capacity after previous CEO Norman Ambunya was sacked over similar incident.

As Muia is on the stealing spree, the Bank is teetering on the brink of collapse.

Muia vehemently denied the allegations when reached for questions,

“Nothing factual here…please confirm with family Bank Directly,” he said. “ You can also confirm with Ruiru Police as well, nothing at all.”

This fictitious fraud has piled up losses over the last decade, from Shs. 326million five years ago to Shs. 2.255 billion in 2018.

Although its losses before tax reduced from Sh1.576 billion in 2017 to Sh307.3 million in 2018, Spire Bank’s total losses increased to Shs. 2.254bn after it accounted for deferred tax arrears.

Nearly a decade of losses, except for a small reprieve in 2013, have left the lender with a negative asset base of Shs. 1 billion.

It is now struggling with critical capital and liquidity deficiencies, even as it seeks capital injections from its shareholders and an unnamed strategic investor.

Spire Bank is majority owned by Mwalimu National Sacco, the largest savings and credit group in Kenya. Mwalimu Sacco bought a 51 percent stake in late 2015 and have since increased its stake to 75 percent.

The controversial purchase could perhaps have done with greater due diligence. The sacco’s executives at the time said that in addition to it being an investment, it would help the organisation save on banking fees.

It was bought from Kenyan tycoon Naushad Merali.

The ownership changes were triggered in part by regulatory rules on ownership structures, as the bank had been majority-owned by Merali since its founding in 1995.

It was known as Equatorial Commercial Bank (ECB) at the time, before rebranding to Spire Bank in 2016.

In 2010, the bank merged with Southern Credit Banking Corporation to create a new bank that met the regulator’s requirements of a core capital of Shs. 1 billion.

The Kenyan Central Bank’s silence on Spire Bank’s status has triggered a wave of speculation, as the current governor’s term began with the closure of the smallest bank in Kenya at the time, Dubai Bank.

The bank had been suffering liquidity and capital deficiencies at the time, while the next two banks to be closed were bigger Tier II banks with a solid capital base but other significant issues.

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