Kenya’s chief prosecutor has struck an out-of-court deal with five banks involved in the Sh11 billion National Youth Service scandal, which has seen the lenders refund the taxpayer Sh385 million.
Standard
Chartered Kenya, Equity, Diamond Trust, Co-operative, and Kenya
Commercial Bank have collectively refunded Sh385 million to government,
just a fraction of the Sh11 billion that was lost through the scandal.
PENALTY
The
five banks last year paid a total of Sh271 million in fines for failing
to report suspicious transactions to the Central Bank of Kenya as
required by the Banking Act and the industry regulator's guidelines.
Director
of Public Prosecutions Noordin Haji on Thursday said his office opted
for the deal because the banks and its managers were not directly
involved in the plunder of NYS.
Their only crime, he said, was failure to report suspicious transactions.
In the deferred prosecution arrangement, bank managers who were targeted for prosecution will now get reprieve, as plans to charge them in court for aiding money laundering have been put on hold.
"You
will be seeing more of this between us and banks where you will see
that prosecution is not the only option in regards to graft and money
laundering," Mr Haji said on Thursday in Nairobi.
“If
they continue breaching the agreements we have made then we shall
prosecute them. This is the first deferred prosecution deal in Kenya.”
At
the press conference also attended by Directorate of Criminal
Investigations boss George Kinoti and Ethics and Anti-Corruption
Commission chief Twalib Mbarak, Mr Haji held that the other cases
involving the scandal will proceed in court.
Mr
Haji and Mr Kinoti also downplayed an alleged rift between their
offices over the prosecution of Kenya Ports Authority boss Daniel
Manduku, arguing that investigations into the state corporation are
still ongoing.
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