Cheserem: well i do not have the details here but obviously when it was put under liquidation, the first major creditor was the Central Bank.
Bosire: But are you sure it was paid?
Cheserem: Not the whole amount my lords.
Miller: There is evidence by Mr Marambii that it was cleared through cheque kiting, arc you aware of that?
Cheserem: Cheque kiting my lords does not clear anything. Thin where you put up cheques and there is no money. so thin was not cleared and remains a debt with the CBK and when the officials come they will tell you how much is outstanding.
Miler: We will now move on to Trade Bank sir, l will go to part of what you said to the PAC and I read: “Trade Bank was not looking for an asset by liquid cash no it approached the Treasury and an agreement was reached where Treasury advanced Trade bank Sh 200 million and the security was Yaya Centre. Is this Sh200 million treated as a separate issue because we are aware of Sh600 million.
Cheserem: Let me clarify this one my lords. Sh200 million wan a mistake. Trade bank was advanced Sh600 million by Deposit Protection Fund and as you have heard From people like Mr Marambii, some of this money went to Trade Bank, some went to Pan African Bank.
Miller :You have talked about this sh 600 million loan and against the security of Yaya Centre and how they disputed the legality and how the cases dragged in omit until you left CBK before it was resolved. Now I do appreciate the fact that you were not there when this loan was advanced but perhaps you can enlighten us on the steps that you took in view of the fact this was one of the issues which faced you when you went there?
Cheserem: When I came we were man-aging Yaya Centre and we had a manager appointed to do that because we had the charge of this property. But became of the court cases, first we lost the management of that building. So the management reverted to Honourable Biwott’s group. Even the money we had ‘managed to collect an rent to try and use it. the court decided we must return it. And because of the level of the fees we were paying my lords, we were paying a lot of money. I tried my best as the chairman of the Deposit Protection Fund to talk to Mr Biwott, I asked him “Why did you buy this property. We are ready, pay ourselves and then finish with this matter.” He knew I thought he was going to buy it and there was even a letter From his lawyers offering Sh 100 million to close the whole deal. The board of the DPF thought this was very small amount :considering the decision was that I should continue in court and let these records stay for posterity so that maybe one day. somebody may want to read them. The most stressful thing my lords is the amount of fees we had to pay every time the bank lost a case against the Biwott group of companies. But the board was categorical that there should be no out of court settlement even if we were losing as long as he facts were left as they were.
Miller: You say you had requested Hon Biwott to buy the hotel is that correct sir?
Cheserem: That is correct my lords because there was some pressure but I could not just go and say here is the title. There was Sh600 million that had been advanced to the bank and the title of Yaya given to DPF, he was disputing the legality of the transfer but he was not disputing the payments. I was trying to resolve one of the many issues that I faced but unfortunately I was not able to by the time I moved out.
Miller: I understand you sir and that there was a loan given to his company HZ Limited which was non performing at trade Bank and then there was the Sh 600 million given to his company by DPI. Flow did he end up being offered Ito purchase the building?
Cheserem: Along the way, the DPF obviously not getting its money back from Trade Bank they wanted to manage Yaya and they wanted to sell it because this is depositors’ money paid by all commercial banks as an insurance and has to be repaid back, do you follow?
Miller: I Follow you sir. So DPF eventually lost that charge on Yaya centre is that so sir?
Cheserem: When l left the document was dill with the DPF and I still believe it is still with them but if it was released to him, I do not know my lords.
Miller: Do you know whether the Sh 600Million was ever repaid?
Cheserem It was never repaid during my time
Miller: Finally, if it was never repaid and obviously this was one of the money you were trying to have recovered isn’t it?
Cheserem: Obviously, this money was paid to clear an account and has to be paid to Deposit Protection Fund.
Miller: So your position is that it should should be paid back?
Cheserem: It should be paid back, the 600 million plus interest
Miller. That is all my lords.
