A parliamentary committee is today expected to start
investigating the proposed takeover of National Bank of Kenya (NBK)
#ticker:NBK by KCB Group #ticker:KCB, focusing on the valuation and
whether the interests of pensioners, employees and taxpayers have been
protected in the deal.
The National Assembly Finance
and National Planning Committee has 60 days to present a report to the
House following a directive by Speaker Justin Muturi following a
petition by Nyatike MP Tom Odege.
Mr Odege said the
proposed takeover should be investigated to clear all the doubts
surrounding the deal, including establishing whether it was subjected to
public participation as required by law instead of leaving it to
boardroom dealings between the two banks in which the government owns
significant stakes.
The government and the National
Social Security Fund (NSSF) have a combined stake of 23.65 per cent in
KCB and 70.60 per cent in NBK.
Valuation
Mr
Odege, citing NBK's weak financial position, said it was also important
to establish whether the deal was properly valued and the interests of
pensioners and taxpayers protected.
KCB Group has offered to buy 100 per cent of NBK through a share
swap consisting of one KCB share for every 10 of NBK in a deal valuing
the bank at Sh6.6 billion.
NBK, which has fallen short
of most of the minimum capital requirements, will end up with a 4.5 per
cent stake in KCB, according to the deal terms.
“The
government ought to intervene so as to safeguard her interests and those
of the pensioners and employees and ensure that the takeover is done in
an open manner where public participation is conducted and all
stakeholders are involved,” Mr Odege says in the petition.
The
committee is also expected to establish why the entire process of the
acquisition was single-sourced and whether the government is trying to
create a monopoly in the banking sector.
But even as
MPs investigate the matter, approvals by the regulators — the Capital
Markets Authority (CMA), the Central Bank of Kenya (CBK), and the
Competition Authority of Kenya (CAK) — are pending.
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