It was the 26th largest bank in Kenya at the end of 2005 with assets of 4.2 billion and made a profit of 122 million shillings. It was the financial arm of the Kingsway Group which includes Creative Innovations, Kingsway Tyres, Digital World and the landmark Village Market in Gigiri.
While it is rare for a financially sound bank to be shut down, the Finance Minister made a good point that he wanted to prevent a run on the Bank. Rumours & stories about a takeover/restructuring/ownership change at a bank can truly cause panic in the banking sector since Kenyans have over the years lost billions of shilling in collapsed banks. At a recent bank meeting, the Chairman was very candid that some depositors had withdrawn huge amounts from his bank following some inaccurate reports appearing in the media.
Likely Outcome
Despite this, the legal grounds for the closure are not very strong although the Bank has weathered several money laundering storms over the years.
Charterhouse which was formerly Middle East Bank Kenya and at one time 10% owned by Nakumatt who also hosted several branches should re-open in a few months with the help of some smart lawyers and an aggressive market campaign.
Let me see, company accused of money laundering, then charges somehow dissappear… hmm… then I put my life savings into the account… yeah right. There is too much smoke. With the U.S. confirmming that it mines for data coming from SWIFT(the intrabank network) how sure is one that there won’t be a situation where the bank get’s itself involved in shady dealings that trigger an International investigation? What are the ramifications of such an association? Imagine being on a terrorist financial watchlist? Wonder if that visa denial has somehthing to do with being on a watchlist? Things make me say hmmm..
The laws have not been strenthened to cover money laundering. Remember a few years ago when somone received a suspicious 2 billion shilling transfer? CBK held up the payment in court but eventualy it was collected by the customer and vanished.
There is some monitoring watchlist e.g. bank transfers to Sudan and Somalia are closely watched and sometimes interecepted
CBK swammed in just as my pal was going to draw the remain coins…. in the meantime, download
http://home.comcast.net/~marauder00/report1.pdf
Also
http://home.comcast.net/~marauder00/report2.pdf
I have no idea on the accurancy of these reports but, “if it walks like a duck and looks like a duck….”
I thought DUBAI BANK was the former Middle East Bank… I remember a MEBank branch near GPO.
Who is the forerunner of Dubai Bank?
Ig-know-rant: Thanks, your report appears to be the real deal
coldtusker: Still checking on Charter as there is still an Middle East Bank near GPO with HQ in Milimani. But Dubai bank used to be called Bank Mashreq.
i seem to agree with Bankelele if there are no laws on money llaundering in kenya yet and there is no clear picture of the laundering by the CHB then why can it not stand the storm again. ofcourse as he said with representation in court by the smart lawyers around?
i beleive it is possible for the bank to get bak to its feet again. smart lwayers, no law on money laundering why not?
bankelele i agree with you that then when the bank was being closed there was no law on money laundering.This is not the case to date there is actualy a law that could be used to sue the charter house bank over money laundering.Its however good to note that nothing has been found on the bank yet even after four years of closure.The bank is not guilty according to KRA and KACC and thus should be resuming operation which is a good idea.The depositors found guilty of all this allegations should be the ones being sued and not the bank itself.The bank roles when it gets its customers is not to be a detective but should only highlight to the authorities
@Bankelele. i support you totally. it is good to see that you have done your research well and this is what Kenyans need to do before we get malicious and rumour monger. Both KRA and KACC found no illegal dealings at CHB therefore there would be no need for it to remain closed with the common mwananchi’s money held up. i any case its not the work of the bank to investigate the customer, so the KACC should have investigated the above companies you mentioned. kudos
you people dont seem to have your facts straight. have you thought about the honest people who had their accounts there and their accounts were frozen. hard earned cash through sweat gone down the drain???
what is it that the state law office(STO)is not telling us? do we really need to be pushed by the international community to do according to their bid?
arent we a sovereign state?
i feel as if we pee and spit only when Americans tell us to.
I agree with naila.I was one of the people who had an account with charter house bank.and over the years.I have been a keen follower on its happening.and one thing is clear to me the closure of charter house bank is a mystery because there is no solid evidence as to why the bank was closed.as far as I am concerned it is the clients who were in involved in money laundering not the bank.
recently KRA denied being the reason for the closure of charter house bank.They said that there was nothing wrong with charter house bank.it was the customers with the problem.
If someone is found innocent on a matter then let him go free.if nothing substantial is found against charter house bank ten.let it be reopened.let the client who were involved in money laundering be punished instead
how safe is our money in banks if a bank can be closed without paying its customers
@senorita i think that means we cannot really trust these banks we can as well put our money under the mattress like the old days. the decision made out of this case will really make us the Middle-class Kenyans to know if we are protected by the banking act or even the government. maybe for now what we have to do is wait and see.
Kate: the bank should not get a license again as they flouted banking practices
Nailal: a lot has been found at the bank, which shows that it engaged it negligent banking practices
Nina: kamlesh pattni went from bank to bank, during the Goldenberg heyday, and each time they got suspicious and raised questions, he simply took his ‘business’ to another bank. This went on until he somehow got a banking license and was able to operate now without external scrutiny. CB seems to have been a home without scrutiny
Bee: the state law office may not have all the facts (or is scared) but has enough to know not to re-open the bank
Senoritadoroda: what kind of a/c did you have?
Jacinta Mwatela, the former acting governor of the central bank of kenya lost her job because of questioning this funny bank
true that Bankelele…closing a bank without sufficient evidence on money laundering is wrong….i trust the lawyers working on the case will do a good job..am positive about it. the customers of the bank need not to fear since all those claims are just allegations..