Why exempt Equity Bank

Wanakenya,

Caveat Emptor !!!!!

There must be a bombshell in this Equity.

Jagwassi
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EDITORIALS

Why exempt Equity Bank
Publication Date: 2007/12/18

Maybe there are good reasons why Finance minister Amos Kimunya has exempted Equity Bank from disclosing who its real shareholders are.

But then there must be equally good reasons why Section 13 (3) of the Banking Act — from which the minister has exempted the bank in a gazette notice — was promulgated in the first place.

The section was designed to check the trend of bank ownership being hidden through front companies, lawyers, accountants and other nominees. Banking is business that requires more disclosure and transparency than many others. It is only fair that those who entrust their funds to banks and other financial institutions have a clear idea of who they are dealing with.

It is within the remit of Central Bank to ensure that people of questionable record are not allowed to control or manage a bank. It also ensures that rules regarding maximum share-holding, caps on shares held by executive officers, and checks on insider lending, are not flouted.

Equity Bank, one of the most admired institutions of its kind in the world, only recently announced a record-breaking deal with private equity fund, Helios AB, which makes it the biggest bank in Kenya by market capitalisation.

The deal has been trumpeted as a sign that despite local naysayers, Equity enjoys the confidence of the global marketplace. Which is precisely why the exemption granted by Mr Kimunya is so ill-advised.

The bank has overcome plenty of negative propaganda in an election year to maintain its forward march. Why then does it need to be shielded from the scrutiny that other banks must comply with?