THE ROT AT SPIRE BANK: MERALLI DEBUNKED FROM HIS OWN BANK, ARE THE OTHER CLIENTS SAFE?

May 2024 · 4 minute read

Spire bank is majorly owned by Mwalimu National Sacco (75%) and Sameer Group (25 %.) The former Equitorial Bank, owned by Naushad Meralli was purchased by Mwalimu Sacco in a scheme meant to defraud teachers through Ex-CEO Robert Shibutse who has been a Meralli staff and mole. The shell Bank was purchased at kes 2.4Billion even after concerns were raised over lack of proper due diligence and conflict of interest. The bank has never made a profit since the purchase in 2004 and has been eating on the capital now standing at over negative one billion (kes 1 billion) against the statutory requirement of kes 1 Billion. The cumulative losses since the acquisition stands at kes 3.2 Billion and has flouted all the minimum regulatory capital requirements.

Despite the above historical schemes to defraud hard working teachers and depositors, the current leadership led by a moribund board that lacks expertise in financial and business matters, a hapless and puppet Managing Director ( Norman Ambunya)who operates like an accounting clerk of the bank with miserable leadership qualities and a General Manager (Onesmus Muia) who is the defacto deputy to the MD whose mental stability is questionable and his role in the bank is to openly harass and abuse staff possibly over compensating on a recent prostate surgery that went south. In open disregard to the mismanagement of the bank, the defiantly increased their salaries and in January 2019.

There are sharp differences between the two Shareholders of the Bank with Meralli, who holds 25% of the bank de-banking from his own bank. All Sameer group of companies closed their accounts in the bank withdrawing more that kes 5Billion in deposits and absconded all board meetings leaving Spire bank with a huge liquidity gap below the statutory minimum requirements of CBK.

Sacco Model fraud

The bank has been hoodwinking CBK, board and the clients that they are implimenting a Sacco model ( a copy will be shared) that will take 90% business from Co-operative Bank and catapult it to a 1st tier bank in 2 years. The impossibility of the strategy is mind boggling given the bank’s inexperienced and corrupt management, miserable liquidity position (around 0% as at 18th April), lack of skilled staff fuelled by naked nepotism and archaic technology where the bank doesn’t even have an internet banking platform.

 

How the rot is perpetuated;

Currently, the bank has been experiencing a run where clients are withdrawing deposits in droves. As at 18th April the liquidity was at 0.2% against a statutory requirement of minimum 20%. This has led to a queue of unpaid transfers with illiquid shareholder Mwalimu National unable to refinance the Bank.

CBK should intervene before another financial disaster hits our already fragile banking sector.

More to follow.

 

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