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State Bank of Mauritius fined Rs151 million over ‘secret loan’

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State Bank of Mauritius fined Rs151 million over 'secret loan'
Photo credit: Business Daily

The State Bank of Mauritius (SBM) has been ordered to pay Sh400 million (Rs151 million) in taxes and penalties on a “secret Sh9.6 billion (Rs3.6Billion) interest- free loan” it took from the Central Bank of Kenya (CBK) during the purchase of collapsed Chase Bank assets – according to an article that appeared in Kenya’s Business Daily newspaper.

The Chairman of SBM was Kee Chong Lee Kwong Wing at the time of the deal.

Kenya’s tax tribunal quashed an appeal by SBM to stop the Kenya Revenue Authority (KRA) from claiming the payment after the lender refused to reveal its agreements with the banking sector regulator and the Kenya Deposit Insurance Corporation (KDIC) for the purchase of Chase Bank.

The tribunal said SBM also declined to give proof of payment for the acquisition, analysis, and valuations of the assets and liabilities taken over and supporting documents for the Sh9.6 Bn CBK liquidity support. Chase Bank – owned at 75% by SBM – is now under liquidation to pay the rest of the liabilities since most creditors did not get their money, including investors who had put in Sh4.8 billion in the Chase Bank bond that remains suspended.

Details of the transactions have reportedly not been revealed and the taxman claim has shed light on some of the arrangements that facilitated the expansion of the Mauritius lender into the Kenyan market.

Read the full story at Business Daily.
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