Caption: Scandalous East African Development Bank
EVIDENCE OF FALSIFICATION OF NPL’S RATIO & PROFITS BY AVOIDING TO PROVIDE FULLY FOR SOME PROJECTS – EXAMPLES OF IRREGULAR CLASSIFICATION AND FAVORS TO KENYAN PROJECTS AS OPPOSED TO PROJECTS IN OTHER COUNTRIES.
We shall leave evidence on Dari (a Kenyan project financed against policy) to be presented in another series because it is overwhelming. In this email, we shall focus on Benvar Estates and Aberdares, both Kenyan projects. I have attached documents 1, 2, 3 and 5 which I will use to testify the mess orchestrated by the EADB Director General to lie to the board about some Kenyan projects and yet she is very harsh on projects from other countries
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Arbadares was restructured and the restructured terms reflected in the bank system illegally to show the board that this project was performing and yet it was not performing. Arbadares did not fulfill the restructuring conditions and at the same time the restructuring documents were not formalized, which would make it illegal for the restructuring terms to be reflected in the system and upgrading the client from non-performing to performing. This action was illegal and against policy and used to cover up non-performing loans. Document 5 attached was very clear in point number 1, that at a PROCO (Projects Committee) meeting held on Dec 2015, it was discovered that the
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restructuring conditions were not met and yet restructuring had been effected in the bank system on the directives of the DG way back in August 2015.
This restructuring should have been reversed and Abardares reported as an NPL and provided for in the period ending Dec 2015. In another Document 1 attached, it clearly indicated that even after the board during the meeting in July 2016 held in Kampala had been assured that Abardares and Benvar would have paid all the arrears and exited the bank portfolio by end of 2016 (which was another lie) the updates in document 1 shows that the two projects are far from clearing their arrears, leave alone exiting the bank’s portfolio another proof that the board was told lies to cover up NPLs and not to fully provide for non-performing loans.
However the favors are only being done for Kenyan projects. In document 2 attached, the DG was asking if abardares and Benvar projects restructuring were effected in the system and go on to the email attached as document 3 (a section circled as 4) to instruct finance department to effect the restructuring simply because the client paid restructuring fees.
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Payment of restructuring fees was not the only condition the client had to meet in order for the restructuring to be effected. Other conditions like clearing all interest in arrears, formalizing the restructuring documents, among others, had to be fulfilled before restructuring could be reflected in the system. The DG was well aware of all the above through email communications and the PROCO minutes which were submitted to her.
She goes on to harass staff by saying that clients are being penalized by delays to effect the restructuring and yet the client does not qualify for the restructure. The DG further says in this document that restructuring should have been effected at the beginning of 2015. It is clear that the DG was bending policy as a favor for these clients to the extent of intimidating staff members to do the wrong thing when she had all information to show that this restructuring was not supposed to be done.
She also wanted all the arrears and penalties accrued on interest on these projects since 2015 to be dropped. If you remember the case of Eden International School, a project in Uganda owned by Justice Kenneth Kakuru who took the Bank to court simply because the bank had promised to write off the arrears and penalties on interest but the DG, later on, refused, much as there was another irregularity on the side of the Bank which forced the Judge to go to court on top of the DG being too arrogant with him.
Caption: Criminal Operative Vivienne Yeda Apopo
Why should this Ugandan project be punished and yet the Kenyan projects get away with it? The other case we can remind you if of the none refund of appraisal fees for some projects who failed to fulfill loan offer conditions?
These clients forfeited the appraisal fees and at the same time, the loans were not disbursed. Why would the DG push for a restructuring of these Kenyan projects simply because they paid appraisal fees? Why should the rules apply differently when it comes to Kenyan projects? These are some of the examples of the lies we have told you that the DG has fed on the board members several times.
Abardares has requested for a second restructuring which the DG is also pushing to effect even when the first restructuring was done illegally and ought to be reversed. According to bank policy, a project can only be restructured twice during the entire life of the loan and the time period between the first restructuring and the second restructuring should be at least 3 years. Therefore Aberdare’s did not qualify for the first restructuring and does not qualify for the second restructuring. Benvar is a non-performing loan and has never been restructured much as the DG would also like it to be restructured and the restructured terms reflected in the system starting back in early 2015, which is against policy.
Benvar can be restructured now if it meets the restructuring terms and conditions but will remain an NPL for at least two loan installment repayment periods (a minimum of 6 months if performing according to the restructuring terms). DG is pushing for the restructuring of these two projects to be effected and
backdated to early 2015 so that the project can immediately be upgraded from NPL to performing and don’t attract any provisions.
You might say DG has turned around the Bank, but I think you have been told many lies. So many dubious entries have been passed to paint a good picture and yet not true.
