Revisited: Sweet NCBA Deal Rigathi Used to Hammer Uhuru

Kenya Kwanza Deputy Presidential candidate Rigathi Gachagua kept his guns trained on President Uhuru Kenyatta during his debate with Azimio DP candidate Martha Karua on Tuesday, July 19. While they went back and forth, Gachagua reiterated allegations of state capture against the current administration led by Kenyatta.

At one point, he zeroed in on a deal involving NCBA Bank – citing a gazette notice. “Through a gazette notice and by a single signature, two companies owned by the first family were exempted from paying Ksh350 million, money that can put up 35 Level 3 hospitals in Kenya,” Rigathi stated as he continued to tear into the President.

The Kenya Kwanza team has hinted at setting up a probe to look into alleged state capture during Uhuru’s tenure.

What are the facts?

In 2019, the National Treasury then led by Cabinet Secretary Henry Rotich exempted the merged CBA and NIC bank (NCBA) from paying share transfer tax amounting to hundreds of millions of shillings. Rotich exempted the transfer of CBA shares into NIC Bank from paying stamp duty of one percent of the worth of the unquoted stocks being transferred.

Rotich through a legal notice exempted the transfer of CBA shares to NIC Bank from paying stamp duty of one percent of worth of the unquoted stocks transferred in the merger. While the value of CBA shares was not quoted in the deal, analysts estimated the value of 53% stake at Ksh35 billion based on the book value of Ksh65 billion at the time of the deal’s announcement —placing the stamp duty charge north of Ksh350 million.

The merger was undertaken through a share swap between the  banks, with the NIC group shareholders owning 47 percent of the merged entity and CBA shareholders including the Kenyatta family owning 53 percent of the merged entity.

READ>>Kenyatta Family Biggest Shareholder in Newly Merged Bank

“The Cabinet Secretary for the National Treasury and Planning, on the recommendation of the Cabinet Secretary for Lands and Physical Planning, directs that the instruments executed in respect of the transactions relating to the merger of NIC Group PLC and Commercial Bank of Africa shall be exempt from the provisions of the Act,” the notice from Rotich dated June 26 read in part.

As of 2022, the Kenyattas, to whom President Uhuru Kenyatta belongs, are the largest shareholders of NCBA with a 13.2% stake valued at Ksh5.4 billion, followed by the Ndegwas, the family of former Central Bank of Kenya (CBK) Governor Philip Ndegwa, with a 12.52% stake valued at Ksh5.1 billion.

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