Prof. Njuguna Ndungu answers questions on his integrity

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During my time there is no bank that collapsed i was governor of the central bank of kenya from march 2007 to march to the to the beginning of march in 2015. that does not mean uh majority that there were no problems there were problems but you have to make sure that you bring in or you develop new solutions and new interventions to save the market and that’s

What we did there there were several mergers but those majors were actually geared towards preventing any corrupts of the banks because markets tuitions do change some projections in marketplace can change and so the regulator must know what to do a regulator is not someone who is waving an ax in the market a regulator is a person who is trying to understand the

Market help develop the market and the third one is regulate and protect the market so those three dimensions are very very important for a regulator and that is what i did for most of the time that i was there now of course the two the affidavits that have come up let me comment on them one the first point i would like to make mr chairman and honorable members who

Are glad to ask questions is that we want to stop at this at the at the first point of just mentioning what it is we don’t want to go further and see what has happened a case for example for the procurement i fought it through the courts to the court of appeal and there was a judgment the case of grad regency i think the statement is that i was adversely mentioned

I was still i was an agent of government and this was a government-to-government sale and that was i was the one to negotiate and to receive the payment which was actually received by the government and for your information the end result was that it gained 3.114 billion shillings that was actually used in lamu to break the port the idea in government then was

That such recovery from corruption proceeds should be used in fixed investments that would give kenyans perpetual benefits and that is how it was located there was a commission of inquiry that was started but it was supposed to check whether the sale was appropriately done now the whole issue was how was it appropriately done according to that commission it fired

The hotel at 1.8 billion then the question they were asked what about the central bank how did it value the hotel it was a 2.2 billion and then how much was the hotel sold by the central bank it was sold at 2.8 billion the difference between 2.8 billion and 3.1 for 114 is because of the retained earnings during the operations so in a sense it was value for money

And that was uh and that was what the committee was supposed to establish let me state this mr chairman with all due respect that we are and especially for me i’ve been a victim of abuse of the criminal justice system for example the procurement that has been mentioned the whole idea was to get joanna dung out of the central bank how do you do it that’s why

Even if you go to the to the records you will just be embarrassed the kind of facts now the biggest problem i have when i shower and the others who have asked the question is that the national human rights commission the kenya national human rights commission and the transmission international should be coming to our aid as victims of abuse of the criminal justice

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System but they are coming here to make us the victims it’s quite a paradox is is actually extremely i would like maybe to invite people to read even the judgment even the commission of inquiry on grad regency it’s so interesting that they find it that they’ve become uh also a victim it is something that we may want to check out mr chairman is something that we

Have to rethink about the mandate of some some of these institutions and it’s something that we need to correct from the very beginning yeah sorry to interrupt the good professor philly is on a tangent is now to blame the petitioners i i just wanted him to clarify because that was my question professor in the interest of the country and the economy we want to if

We approve you to approve someone that will be confident has no issues of integrity hanging over his head but you need to know you have is to make that clear and that’s why i asked the status the grand regency which i have heard you clearly stated that you you are generated by the commission of commission of inquiry uh well i hear my colleague saying no so we

Want to know what was the status what is the status of the charges on the 1.2 billion tender you you know it’s good to say it went to court all the way you fought into court of appeal thank you what was the budget thank you thank you thank you for clarifying yes uh the theater issue let me first of all say that it was very clear that ceos are not involved in that

In the procurement their work is only to appoint the procurement committee and that matter went all the way to the appeal and they showed that the problem was procurement to committee of the central bank and i was vedicated i had no role to play the the the the the grad regency again is an issue have shown that the government position was that the proceeds could

Be invested in they were really invested in the in in that case and maybe i can go to so in in actual fact my role was very very clear as an agent and my role was also very very clear that i had no law to pray in procurement but i wanted to go further to show that actually when such issues come although i’m trying to defend myself when such issues come also those

People who bring them up before the whole end is not helping us make progress for instance you think about talking about being vindicated in the ground agency say ing by who because the report of the commission is clear that you are you are indicted thank you thank you mr chairman with due respect and maybe i will seek your protection because i have never seen

The report i only remember that the government said those proceeds that the central bank has done well for lacing that kind of money it was invested in ramopot and you are aware of that and the whole conclusion was that if such resources coming from corruption proceeds i invested in the projects that provide perpetual benefits then everybody is happy let me also

Move on to sorry maybe as a procedural matter of guidance to the committee with all due respect to my colleague the leader of minority i don’t know when as a committee we allude to our reports is it not in other than as a procedural issue that a copy of that report is shared with a committee so that’s either the the nominee or other members of the committee are

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Able to benefit from that so that’s honorable speaker we avoid the um issues of raising issues to the public gallery and i say that with a lot of respect to my brother because the alia dominique was here professor kindiki had the same issue on an issue that my brother was not able to again clear up properly that indeed the allegations were against the law firm of

Honest massive tumorable common and company not the law firm of honorable so maybe a speaker you could guide us on that issue there were affidavits one or two sent to the committee through the clock i instructed that they’d be furnished to the nominee i believe you have been sound and i did hear the two members make reference to joseph 11s i would encourage the

Nominee to answer questions that’s why i said precise and concise when we go on to a long journey we end up stumbling somewhere so i would uh what do you professor the three questions that were asked that cast expressions on your integrity by chungwa or die and jeanette just answer them straight and clear are they true they are not was they are called process

How did it end did your wife go to thailand on holiday paid by imperial bank was it imperial bank if it wasn’t because an allegation being raised by unit i’ve seen no evidence that it happened do you is did it happen or did it not it’s as simple as that care not to interrupt your chair with your indulgence also you know we are on our handset the nominee alluded in

His response that even the report of the commission made him a victim he said that when he was responding so that means his private to the commission’s report i live on then i think he was on a struggle to defend himself he said he’s been a victim of many things yeah yeah so now that we have put him on track let’s hear his answers to your questions which i’m sure

Is privy to thank you thank you chairman i i get your advice and i’ll take um i’ll be in that um let me say that um and the first issue and the second issue i think what i’ve said is that i’ve defended myself in terms of their i divided myself through the court process the commission of inquiry in terms of the grab regency i was asked to surrender the money to

Bridge the the ramu port all the proceeds were given you are asked us or as governor of the center as governor of the central bank and also the agent who transacted that particular deal the printing contract that uh united with due respect thank you very much that matter came to parliament it was debated and in the end it was not the central bank that determined

The printing contract because it was there even before i joined in and also i was exonerated of that and the reports are very clear i’ve never been involved in contract for publishing of for any currency printing and again the treasury also went uh into into joint venture with the delaru and that is how the issues were determined so it was not a purview of the

Central bank and the matter was dissolved that way in the central man the imperial bank never collapsed when i was in the central bank i had already left and it was several years when i had to live and the bottom line is that i was never part of that and i never flouted and also the floating of the the procurement rules i never floated in the ruse because since

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Then they have been revised and bear me with that since then the procurement law has been revised the ceo of an organization his role was or his or her role was to appoint the procurement committee if the procurement committee made a decision the ceo could not vary that decision since then when they had already left the central bank of things that would have

Changed and the role has been revised let me also say the issue of banks propping the sharing that was not correct it is like the same situation we are in now we are having surprise side shocks and because of the persistent shocks you can see the thought of the torah supply has been minimal and so in a sense when you look at our current account deficit it is the

One that signals whether the currency is going to depreciate or appreciate and that is the same situation with external shocks and this is consistent with the african economies again we went through the motion with a special parliamentary committee on that and we dissolve the matter that actually this was the preference that is why mr chairman i mentioned that i

Had issues with saying how do we create buffers that help us to mitigate short-term shocks and the whole issue the whole issue of imperial bank and my wife going to thailand this is a paid service he was an agent of that that company that was giving those uh the services and it was very clear what he asked yes that in certain procedures the former owner of imperial

Bank are late that he paid for an expensive holiday for your family when you land of it you cut short the holiday came back and collapsed the bank that’s what he elected yes and that’s what you should respond thank you thank you chairman the bank collapsed in 19 in 2017 and i was not governor then and i was even away from the country i was working from outside the

Country so it did not collapse in when i was a governor thank you chairman the issue of the shelling that i raised it is true that the scenario looks like now but the chair just as a supplementary question this shilling now we start at that level but that time a committee of parliament was formed and i suspect you were in parliament by then after the investigation

Of parliament ended in a month or a month and a half the children came back from 120 came back to 90. did the trip to thailand happened or did not happen in spite of the bank collapsing in 2017 . thank you thank you chairman let me say this once the crisis has been resolved then there is infra or foreign exchange and because we have an open capital account and

A floating exchange rate their precision will always take place because their precision is that precision is coming because of scarcity and that’s what happened you can even produce graphs to that effect that is i wanted to correct that the trip to naira took place in 2014 and then the agent of uh of that was himself i can’t remember the name of the one you have

Mentioned and he was we were paying him in advance to god so it was a trip that was paid for you pay him so it took place it was an agent of that particular resort and you paid him directly and then you and and all those details are there did you pay for the holiday i paid for that holiday for my wife yes

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Prof. Njuguna Ndung’u answers questions on his integrity By NTV Kenya