Mass withdrawals at troubled teachers’ Spire Bank – Weekly Citizen

The management woes bedeviling Spire Bank has been linked to current acting chief executive officer Onesmus Muia, Weekly Citizen has established from insider sources within the banking institution.

For Muia to rise within the bank, he staged what is described as perceived management crisis with the help of Asian shareholder Naushad Merali. Merali is out to take control of the bank if it goes under using his Sameer Africa.

Muia is Merali’s spanner boy at the bank. Muia worked as head of assets and leasing at Equitorial Bank.After being bought by Mwalimu National Sacco to Spire bank, Muia was among those who moved to occupy top management position at Spire Bank holding position of general manager. Merali was associated with Equitorial Bank.

Merali

Muia’s target from the word go was then CEO Norman Ambunya. To sabotage Ambunya, Muia had on his side Dan Ameyo a director of Equitorial Bank who was accommodated at Spire. Another name featuring in the wars is that of Robert Shibutse. Before joining Mwalimu Sacco as CEO, Shibutse was an employee of Merali. Shibutse was instrumental in brokering the behind-the-scene deals that saw the emergency of Spire Bank. In the deal, directors at Mwalimu Sacco behind the buy of the bank were paid millions.

Shibutse has acquired multi-million prime properties in Nairobi from the deal. But as Shibutse enjoys the teachers’ sweat, members of the giant Mwalimu National Sacco are in for a rude shock after reports filtered they have invested billions of shillings in a bank that stands on shaky ground.

Njoroge

In what is perceived to be damage control, the current management is putting on a brave face saying they have embarked on restructuring its operations to meet business requirements which will guarantee profitability and dividends to all shareholders, including teachers.

Merali sold the controlling stake to the teachers’ Sacco. A visit by Weekly Citizen undercover team at the bank headquarters courtesy of a top manager not happy with the ongoings showed low staff morale that has led to mass exodus in search of green pastures, poor working conditions and no significant recruitment of new customers mainly non-teachers.

Ameyo

We were shown records indicating that since the boardroom wars surfaced at Spire Bank and Muia taking over, the bank has managed to recruit a percentage of 0.2 in terms of new customers. This is against a higher projected percentage of customers closing accounts voluntarily or those accounts going dormant due to natural attrition.

Staff we talked to blamed Muia who traces his background in Asian managed banks that are known for internal trading, money laundering and giving unsecured loans to top managers and board of directors. Infact, the removal of Ambunya was on grounds, those protecting Merali’s interests at the bank wanted unsecured internal borrowing for Asian businessmen operating accounts at the bank something he was opposed to.

To fix Ambunya, Muia is said to have brought on board managers at Central Bank of Kenya. Remember by then Ambunya was still the CEO. A story is told of how Ambunya and top managers were summoned at CBK to meet Governor Patrick Njoroge a well known staunch catholic. At the meeting, Njoroge in less than five minutes chased Ambunya out of the boardroom telling him to go and put his ailing bank in order. Ambunya was not given any minute to explain what modalities he was putting in place to rescue the ailing bank.

Dejected and with his team having been shown the door by none rather than the CBK boss, Ambunya was forced to quit knowing well that the pro-Merali forces on the board of directors were not going to allow his stay. Ambunya, a holder of a doctorate degree was also concerned about his future employment opportunities.

As this was happening, the money-hungry Muia was mark timing.

One of the things Ambunya wanted to tell CBK boss was that, Spire Bank is experiencing critical capital and liquidity deficiencies and the only way out was to seek capital injections from its shareholders.

Ambunya left the bank in 2019 a frustrated man. In his resignation letter in our possession he complained, key matters confronting the bank that required immediate attention were not being addressed and he feared the bank would collapse.

Part of the letter reads: “They include immediate stable funding without which deposit mobilisation efforts are unlikely to yield sufficient results for financial sustainability. The deposits held at the bank are largely for working capital and are very short term. The customers use the funds on a daily basis.”

Ambunya also blamed falling interest income from dwindling lending, leading to shrinking margins which were increasing losses and capital.

Muia

Exist Ambunya and enter Muia as acting CEO at the ailing bank. It is said immediately he landed in the plum position, Muia held a party for a section of bank directors allied to Merali. On top of the agenda was how to deal with rebel directors. The rebel directors are said to be those known to be sympathetic to Ambunya. The said directors were to be linked to a number of scandals and Muia, a media happy CEO was to expose the targets in papers. Keen observers of happenings at Spire Bank will agree, negative reports on a section on the board were rife last year.

When Muia took over from Ambunya mid last he embarked on witchhunting of senior managers he suspected were allies of Ambunya.

Weekly Citizen has information, some workers are complaining of Muia sex lust and fraudulent activities at the bank. Of great concern is giving Asian firms that held accounts in Equitorial Bank and Southern Credit Bank that were part of the merging to form Spire Bank unsecured loans.

Recently, Muia was linked to suspicious Sh79 million from the bank that was at Family Bank account in Ruiru. According to an insider, the matter was raised at management level with Muia being linked to inside trading. Muia boasts to operate a dollar account at a local bank.

Mwalimu National Sacco owns 75pc and Sameer Group 25pc.

In fact banking industry players say, CBK banks monitoring department has been lenient on Spire as it is well known, Merali worked behind the scenes to have Mwalimu Sacco purchase his bank in a scheme meant to defraud the teachers through former CEO Shibutse who had been a Meralli employee.

The bank was purchased at Sh2.4 billion even after concerns were raised over lack of proper due diligence and conflict of interest.

The bank has never made a profit since the purchase in 2004 and has been eating on the capital which at one time stood at over negative Sh1billion against the statutory requirement of Sh1 billion.

The Sh6 billion investment that the teachers made seemed like a bad decision forcing some to leave.

During the purchase, former officials of Mwalimu were accused of having conflict of interest, with Shibutse having worked for Equatorial Commercial Bank and other companies associated with Merali.

Ahead of the transaction, the lender transferred its office building, Equatorial Fidelity Centre in Nairobi’s Westlands area, to its associate company Fidelity Shield Insurance in which it held a minority stake at the time.

Staff we talked to are even questioning Muia’s health and mental capabilities. Claims are rife Muia at times faints in office. He sometimes back underwent prostate surgery that was not successful. It affected his brains and that is why at times Muia acts like a mad man when handling members of staff at time resorting to harassment.

In fact while general manager, Muia was instrumental in having all Sameer group of companies close their accounts in the bank withdrawing Sh5billion they held in deposits. The move saw Spire bank experience huge liquidity gap below the statutory minimum requirements of CBK.

Muia has been withdrawing millions from the bank operations accounts claiming to be a budget to facilitate CBK monitoring department managers not to crack whip at Spire Bank.To survive, the bank has written to CBK, board and the clients that they are implementing a Sacco model that will take 90pc business from Co-operative Bank and catapult it to a first tier bank in two years. The bank management more so Muia has been blaming Cooperative Bank MD Gideon Muriuki for being behind the current negative wars to bring it down fearing stiff competition expected ahead.

Apart from internal looting, Miua has been linked to nepotism and sexual abuse. Due to internal suspicious transactions, during Muia reign all is not well as with core capital said to be negative.

How Spire eyes to overtake Coop Bank in its current situation when deposits are dwindling and directors on looting spree has left many wondering. Internal memos reveal the bank rescue process has completely failed and is just a matter of time CBK puts it under receivership.

In fact, a section of the directors with the help of Muia are working day and night to have Mwalimu offload its shares from the bank and have Merali have the controlling majority shares and invite a foreign firm acquire shares as it happened with Chase Bank that was acquired by Mauritius SBM and Imperial Bank that was taken over by KCB. How Spire board has allowed Muia to be at the helm of the bank he is working for its downfall with his masters begs a lot of questions.