Shares of Kenya’s largest Mortgage lender, Housing Finance Group plunged to an 11 year low on Thursday’s early trading session after reports that CEO Frank Ireri and senior managers of the firm colluded over the years to hide more than Sh4.3 billion in non performing loans.
Since Tuesday when the story was first reported, the stock has fallen by about 16% to Sh 11.15 on the Nairobi Stock Exchange, touching its lowest price since October 2005.
The Bank’s former Credit Director, Kevin Isika claimed in court filings that he was wrongfully terminated after he questioned the the senior managers why they offered shareholders and regulators a false financial position.
According to Mr Isika, Housing Finance Group Managing Director, Frank Ireri and his counterpart, Sam Waweru, faciliated his sacking after he raised questions about the risk that such a huge and hidden bad loans book posed to the company. The suit papers further claim that a select group of Housing Finance employees have been exploiting a loophole in the bank’s system to exempt some borrowers from interest on loans taken, in return for kickbacks.
Housing Finance on Wednesday defended the allegations through a paid press statement on local dailies, saying this was a simple matter between the employer/employee and was subject to court hearing on 19th December.
