HF Group Chairman Steve Mainda has assured borrowers that its loan approval process is fool proof and dismissed allegations that its top executives awarded loans under unclear circumstances. Responding to claims that HF Group Managing Director Frank Ireri overruled his employees and approved loan applications earlier declined, the chair said HFC Limited, as a regulated entity, has very clear credit policies and an approval matrix approved by the Board which has always been followed to the letter.
Mr Mainda said the approval matrix sets certain limits that apply to the Management Lending Committee, the Group Managing Director, the Board Credit Committee and the Full Board. “Upon review of the cases specifically mentioned, we state that the Board is fully satisfied that the approval matrix was and continues to be strictly adhered to,” said Mainda.
The lender reiterates it has a well-documented policy on insider lending that see all required disclosures, both at the Board level and to Regulators done in all the matters highlighted. “For avoidance of doubt, all the lending mentioned in the Sunday Standard newspaper was at arm’s length, fully secured and with a clear business case,” Mr Mainda said.
“It is therefore not true, as alleged in the article or at all, that HFC intentionally misreported the Non-Performing Loans position during the Rights Issue and state that this is actuated by malice and intended to serve other collateral purposes,” added Mr Mainda.
HF Group, said its subsidiary, HFC has a focused strategy on ensuring sound asset quality, with the necessary disclosures on asset quality made to the relevant stakeholders from time to time. Moreover, the management lending committee of Company meets every two weeks to approve new credits and also to review the asset book and exit non performing clients through recovery avenues open to the Lender.
The Group has confirmed that the consulting firm McKinsey was contracted by the Board to assist in crafting the HF Group’s five year strategy.