CBK’s Legal Dilemma Reason why Zafrullah Khan, Former Chase Bank Chair, Still Heads Rafiki Microfinance Bank’s Board

Central Bank boss says little can be done at the moment to oust Zafrullah Khan from the helm of Rafiki Microfinance Bank’s board due to Kenya’s long and tedious legal system.

Governor Patrick Njoroge says Mr Khan, who was charged with conspiring to defraud Chase Bank Ksh1.6 billion in 2017, leading to its fall, is still the Chairman of Rafiki, questioning the mandate of the regulator in ensuring corporate governance among the lending institutions.

The legal process to enhance corporate governance in the banking system, and bringing to book individuals that engineered downfall of banking institutions, is being hampered by a lengthy trial process.

“The legal process is painful slow from my perspective,” he said during the Governor’s first press conference held at CBK offices.

Chase Bank experienced liquidity difficulties in 2016, and was placed under receivership by CBK to protect the depositors from unsafe financial conditions.

It has since been branded as SBM Kenya after SBM Holdings committed to recapitalise it and offset outstanding obligations Chase Bank had.

Chase Bank’s top brass – Zafrullah Khan, Duncan Kabui, James Mwaura and Makarios Omondi – have since had their day in court for using the lender’s assets to enrich them.

“You have to appreciate the work we have done since 2016 in strengthening the integrity of the banking sector in terms of improvement of governance, and in terms of holding people accountable for their actions. Nobody is untouchable, and we have shown our direction on that,” said Governor Njoroge.

Duncan Kabui is still a director with Rafiki, though we could not independently verify the information.

“There is due process, and also the need to follow the laid out procedure. We started those cases back then. But we are still there. We are not going to give up. This is not the time to give up. But a time for us to continue,” he added.

Before it met its end, Chase Bank owned 75 per cent of Rafiki. In the meantime, the microfinance bank will continue to retain the tainted individuals at its board as the regulator awaits justice system to right the unpleasant scenario in the banking sector.

“We have to follow the legal process. We, too, are recipients of justice. Not just ourselves, but depositors and others. This is the time we continue to stay the course,” signed off Governor Njoroge.