Blogger Dikembe Dikembe reveals that like Tuskys Supermarket, there are reasons to warn those investing with Co-operative Bank to make hay while the sun shines. That sun is about to set. This is a story about a bank that’s being looted dry to make way for another bank.
It is also a story of a thriving SACCO institution being destroyed to make way for a private one-man business.
It is a story about Co-Operative Bank CEO Gideon Muriuki, and his evil maneuvers to kill Co-Op Bank for his own bank known as Kingdom Bank.
Lastly, its a story of a government regulatory environment that does nothing but watches, as criminals run down the banking, collapsing with millions of savings of ordinary Kenyans. Here is the story:
Africa’s and Kenya’s wealthiest Bank CEO Gideon Muriuki has capitalized on the raging Covid-19 crisis to pull off a major money heist in the form of a discreet personal investment in the banking industry hitherto flagged as a multi-billion fraud and earlier-on frustrated by mandarins in the Kibaki regime who periodically told him off.
Mr. Muriuki, the MD of Co-Operative Bank, became the wealthiest African banker by pulling an arduous insider trading in shares of the bank, ruthlessly buying out struggling investors and doing other crimes the sort of which will never go unpunished. In the meantime, however, by pulling off these crimes, he became the single biggest shareholder in the bank.
In a shrewd maneuver, Dr Muriuki has at last bulldozed the establishment of Kingdom Bank as a subsidiary of Co-operative bank, a fit he tried some years back, but top government officials who had gotten wind of his secret arrangement to sneakily make it independent and convert it into his personal Bank stopped him.
The recent acquisition of Jamii Bora Bank as a subsidiary of Co-operative Bank and its swift renaming as Kingdom Bank is the culmination of a long pursuit in Dr Muriuki’s struggle to exploit his incumbency at Kenya’s fourth-largest bank to establish a new bank to which to retire on leaving the Cooperative Bank.
Our investigations trace this fraud to the immediate aftermath of the exit of former long-serving Chairman Hosea Kiplagat and his predecessor CEO Erastus Mureithi when Dr Muriuki toyed with the idea of taking advantage of the Bank’s shaky financial base, almost being thrown into insolvency, to acquire it for himself with the help of his foreign friends who could pump in money if he acquired it and ran it in partnership with them.
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.
Highly placed sources have revealed that the scheme was nipped in the bud by alarmed Co-operative Bank Board Members and managements of various major Cooperative Societies (Saccos) who rightfully feared that the bank which is their most strategic investment was going to be snatched from them clandestinely. Instead they compelled Dr Muriuki to restrict himself to seeking Government bail-outs.
Unknown to many Kenyans, the often-hyped claim that Dr Muriuki single-handedly worked miracles to revive the bank which had been left in the red by the Hosea Kiplagat-Erastus Mureithi leadership is a white lie and self-aggrandizement for image laundry purposes.
Muriuki has however spent millions in Kenya’s mainstream press to launder his image with this bullshit. The facts are as below:
The bank’s true revival and financial re-engineering came in 2003 when a section of the new NARC Government Ministers and senior officials embarked on a deliberate maneuver to bulldoze business to the bank, mostly irregularly.
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 hitherto President Moi’s establishment banks, notably, Kenya Commercial Bank, National Bank and Trans National 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 the Co-operative Bank.
As fraudulent as this policy was, the NARC government was still very popular with the masses and the beneficiary was a well known mwananchi bank (owned by Saccos) so nobody raised a finger. It 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, Dr Muriuki had 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, Dr Muriuki started off Kingdom Securities as a personal agency.
When the government propelled success came to the Cooperative Bank, he pushed Kingdom Securities into over drive 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, Dr 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.
Of course, this is criminal.
The Capital Markets Authority (CMA) at one time launched investigations into Dr 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. Millions exchanged hands.
Towards the end of the rule of President Mwai Kibaki (2013), Dr Muriuki having shared millions of his loot with ministers and State House officials imagined he had compromised them thoroughly enough and he could revive the idea of setting up Kingdom Bank with less resistance. His idea now was to use smart legal maneuvers to delink Kingdom Securities from the Cooperative Bank and convert it into his Private retirement Bank.
However, with the benefit of history, some senior members of the cabinet and state house officials put a break to it once more warning that it could balloon into yet another terrible scandal like the Anglo-Leasing one that had badly tainted the Kibaki Presidency.
This shocked Dr 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, the Robert Mugabe of Harambee Sacco.
The Uhuru Kenyatta years in State House have been a bit hard for Dr Muriuki to robustly pursue his dream given that some few influential top officials who knew the scandal during Kibaki presidency still remained around and some elevated to more influential positions.
One such man is Mr 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.
But the Corona Pandemic crisis environment came as a blessing to Dr Muriuki. He was finally able to pull off the surprise 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, Dr 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.
Already some of the Board of Directors Members 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.
Cooperative Bank insiders keenly following the establishment of Kingdom Bank cite the appointment of Dr Muriuki’s relatives and cronies, and 99% from his ethnicity as the clearest sign that they have an assignment to execute a dirty scheme which requires utmost loyalty to the master and confidentiality to conclusion.
The whole plot is to ensure that Dr Muriuki retires into a Bank owner to rival Equity Bank’s Founder James Mwangi.
Once again, the rivalry of Mt. Kenya corporate elites will turn once thriving bank into another Tuskys Supermaket case – utter collapse!
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