The Central Bank of Kenya is demanding that The Nation Media Group retract a false story claiming that the regulator had paid its chairman, Mr Mohammed Nyaoga, “Sh6 million in allowances without holding a single board meeting”
On December 8, the Business Daily ran a front-page sensational headline “CBK pays its chair Sh6m retainer in year of no meeting” claiming that Central Bank of Kenya (CBK) had paid its chairman Mohamed Nyaoga Sh6 million yet the regulator had not held any meetings on the grounds that a board had not been fully constituted.
The NMG writer alleged that CBK Chairman Mr Nyaoga was paid Sh6 million during the year as a retainer at a rate of Sh500,000 per month.
The following day on December 9, the paper also ran an editorial claiming that CBK had no moral authority to enforce corporate governance in banks because it was unable to live by example.
On Sunday, the Central Bank through paid adverts on some local dailies disapproved the two stories in what it referred to as “erroneous” and “reckless” reporting, and went ahead to give more details on the the payments to its non-executive directors during the FY 2015/16.
The statement said “The article levels several misguided charges against the CBK, the CBK Board Chairman, and the CBK Governor. These accusations include: that the Chairman was paid Ksh.6 million in FY15/16 as a retainer (which was flagged as equivalent to Ksh.500,000 a month), and CBK’s purported failure to exercise prudence in the management of its resources. These allegations are repeated by Business Daily of December 9, 2016, page 2 and Editorial, page 14.”
In order to set the records straight, the statement revealed that the payments were not sitting allowances but retainer fees which it had no choice but to pay as stipulated under the law. The Bank also added that “no mileage expenses or sitting allowances were paid during this period”. The money Business Daily alleged was paid to Mr Thugge was paid to The National Treasury, and was a net total of Sh1.36 million.
A closer look at the audited accounts, however, clearly indicate that the Chairman of the CBK Board was paid Sh2.17 million for the financial year 2015/16 which included Sh70,000 for 12 days of financial year 2014/15 from the date his appointment took effect.
This was Sh3.83 million less than alleged by the Business Daily. Things only went further downhill from there as it emerged that the Sh6 million quoted by the writer was actually more than the entire amount paid to the non-executive directors of the CBK Board in the year under review, which was actually Sh5,887,815.
The net total paid out for non-executive directors’ retainer fees came to Sh3,535,000. The rest of the payments were for the directors’ net travel expenses that totaled Sh837,815 and which are clearly detailed in the audited statements.
According to inside sources with knowledge of the matter who asked not to be named, the CBK legal team had sent a letter to Nation Media Group demanding immediate retraction of the false story as well as an apology followed by a publication of the facts and failure to retract leaves the CBK with no option but to pursue all available legal actions and remedies.
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