•The planned acquisition of National Bank of Kenya by KCB Group has run into a hurdle after a case was filed to challenge it.
Evans Aseto and John Kiptoo are questioning the legality of the deal and want the transaction stopped pending determination of their case.
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The planned acquisition of National Bank of Kenya by KCB Group has run into a hurdle after a case was filed to challenge it.
Evans Aseto and John Kiptoo are questioning the legality of the deal and want the transaction stopped pending determination of their case.
The two argue that the share swap and transfer is irregular as there has been no public participation contrary to constitutional requirements.
They contend that since the National Treasury and National Social Security Fund have up to 50 per cent of shareholding in NBK its transfer ought to be subjected to public participation.
The planned share swap follows offer by KCB on April 18 to acquire 100 per cent shares of NBK by way of share swap of ten ordinary shares of NBK for one shares of KCB.
KCB shareholders have already approved the deal.
However the two applicants argue that if the acquisition is allowed to proceed, issues like staff welfare will be left hanging, the two say.
“We are apprehensive that the acquisition of 1st respondent by the 2nd respondent will occasion loss of jobs to may Kenyans under the employment of respondents as there is high likelihood that various positions will be declared redundant,” the two argue in their suit.
They are further say details on the acquisition are scanty an indicator of clandestine manner in which it is being handled.
Under the constitution the two banks are meant to ensure there is transparency in the process, they said.
Most importantly, they said, the two banks did not obtain authorizing order from the Competition Authority of Kenya which is mandated to oversee such transaction and subsequently give or deny approval.
They want court to order for independent audit into NBK.
To support the need for audit the two argued that NBK books have not been audited by the auditor general and therefore it's true status or financial health is not clear which means it is hard to know if the National Treasury is getting value for money.
Also sought is an order to compel the two banks to provide information and documents relating to the transaction.
A letter from Public Investment Committee notes that the NBK has not been audited.
It explains that efforts by office of the Auditor General to audit the bank have been futile.