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CMA, CBK tussle over bond deals
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MoneyMonger
#1 Posted : Monday, November 26, 2012 2:26:38 PM
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Joined: 4/25/2012
Posts: 110
What is your take on this issue. I lean on the CMA's side based on their arguments. I however dont understand how the statement below in the article could apply.

"The recommendation by CMA, which if implemented could affect the flow of liquidity in the banking system and also diminish the Central Bank (CBK’s) ability to borrow money on behalf of the Treasury through sale of bonds, did not seem to go well with the CBK."

Best.
There is nothing as dangerous as an Idea, when there is only one Idea
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maka
#2 Posted : Tuesday, November 27, 2012 11:49:24 AM
Rank: Elder


Joined: 4/22/2010
Posts: 11,522
Location: Nairobi
MoneyMonger wrote:
What is your take on this issue. I lean on the CMA's side based on their arguments. I however dont understand how the statement below in the article could apply.

"The recommendation by CMA, which if implemented could affect the flow of liquidity in the banking system and also diminish the Central Bank (CBK’s) ability to borrow money on behalf of the Treasury through sale of bonds, did not seem to go well with the CBK."

Best.

...I totally agree with CMA if we want to compete with the best of the best in financial services we should strive to adopt best market practices any reasonable accountant will tell u that what is being done by the banks is wrong since it dsnt represent true and correct value of the firm at that particular time...manipulating and doctoring figures so as to present a healthy bottom line should not be allowed,the investment hall of shame has countless stories of firms and individuals who by "playing bright" brought huge financial losses to their employers and at times even total collapse of the firms...one bank i know which doesnt participate in this SBB thing to manipulate earnings is NBK thats why they usually have bad bonds on their books but the others kwanza........do it every quarter.
possunt quia posse videntur
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Mukiri
#3 Posted : Tuesday, November 27, 2012 12:41:34 PM
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Joined: 7/11/2012
Posts: 5,222
maka wrote:
MoneyMonger wrote:
What is your take on this issue. I lean on the CMA's side based on their arguments. I however dont understand how the statement below in the article could apply.

"The recommendation by CMA, which if implemented could affect the flow of liquidity in the banking system and also diminish the Central Bank (CBK’s) ability to borrow money on behalf of the Treasury through sale of bonds, did not seem to go well with the CBK."

Best.

...I totally agree with CMA if we want to compete with the best of the best in financial services we should strive to adopt best market practices any reasonable accountant will tell u that what is being done by the banks is wrong since it dsnt represent true and correct value of the firm at that particular time...manipulating and doctoring figures so as to present a healthy bottom line should not be allowed,the investment hall of shame has countless stories of firms and individuals who by "playing bright" brought huge financial losses to their employers and at times even total collapse of the firms...one bank i know which doesnt participate in this SBB thing to manipulate earnings is NBK thats why they usually have bad bonds on their books but the others kwanza........do it every quarter.


@maka Mulika mwizi!

Kenya is finally waking up. Financial crime is beginning to take a beating and what better time than when mpigs are fighting for air.

Proverbs 19:21
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VituVingiSana
#4 Posted : Wednesday, January 02, 2013 10:08:00 AM
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Joined: 1/3/2007
Posts: 18,097
Location: Nairobi
CBK issues fake bonds. Is this the tip of the iceberg?
http://www.nation.co.ke/...t/-/h28131z/-/index.html
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Obi 1 Kanobi
#5 Posted : Wednesday, January 02, 2013 12:22:37 PM
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Joined: 7/23/2008
Posts: 3,017
I don't understand the problem here, Sale and buy back is perfetly legal everywhere in the world, the challange is reporting.

You can sell and buy back as much as you want, but when it comes to reporting, the substance of the transactions take precedence over their form. To me this is a reporting issue to be dealt with by the institutions directors and their auditors.

Offcourse the regulators can reject the financial statements if they have evidence of misrepresentation of reports made to the public and penalise the errant directors/management and auditors accordingly.
"The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
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maka
#6 Posted : Wednesday, January 02, 2013 12:55:13 PM
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Joined: 4/22/2010
Posts: 11,522
Location: Nairobi
[quote=VituVingiSana]CBK issues fake bonds. Is this the tip of the iceberg?
http://www.nation.co.ke/.../-/h28131z/-/index.html[/quote]
...then you wonder how someone who has a take home of around 200-300k own expansive real estate,changes rides like he own a factory etc etc...this is crazy n guyz really think,btw this is a massive scandal am sure they will water down the story...
possunt quia posse videntur
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Obi 1 Kanobi
#7 Posted : Wednesday, January 02, 2013 9:59:31 PM
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Joined: 7/23/2008
Posts: 3,017
maka wrote:
[quote=VituVingiSana]CBK issues fake bonds. Is this the tip of the iceberg?
http://www.nation.co.ke/.../-/h28131z/-/index.html[/quote]
...then you wonder how someone who has a take home of around 200-300k own expansive real estate,changes rides like he own a factory etc etc...this is crazy n guyz really think,btw this is a massive scandal am sure they will water down the story...


Had not bothered to read this article. It can't be that simple to create a government bond, fake or not. I thot this things were securitised, gazzetted, their issue dated etc. Plus you would need to create them on the CBK operating/reporting system. It almost comical for the writer to suggest that one person can bypass all this preventive controls and completely ignore the detective control (reconciliation) that eventually caught him. But I could be wrong, I must be missing something
"The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
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rayscaffo
#8 Posted : Saturday, January 05, 2013 1:28:57 AM
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Joined: 1/5/2013
Posts: 1
this is all media sensationalism.The media are suggesting that fake bonds were created and issued.this story makes no sense. I'd suggest we wait for all the details to come out before speculating however Creating fake bonds is one thing, however issuing them is another. Kenyan Bonds are not only traded OTC but they are listed on the Stock Exchange as well which would mean according to the media the stock exchange or individuals at the stock exchange were involved in registering fake bonds?also ,Everytime a bond is issued there has to be a public announcement to both local and international banks and brokers on the CBK website,on Reuters, Bloomberg, Factset and all the other registered vendors, so how exactly could this person have issued these bonds without such an official announcement? assuming he found a way to do so, that would mean the bank and brokers that bought those bonds would have to have been complicit in this backdoor deal?also if these bonds were issued what are the isin codes?these should be public if they were "created". I think theres a bit of fantasy in this story. I can believe that fraud happens at secondry market level but not with the actual creation of bonds.That would be extremely difficult and costly.This does however prove how far Kenya still has to go. The solution for all this is very simple.But i wont dive into that now.Thanks for the forum.You gentlemen might also be interested in senninfinance.com for a more stock specific discussion on kenya and africa.
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guru267
#9 Posted : Saturday, January 05, 2013 8:55:14 AM
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Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
VituVingiSana wrote:
CBK issues fake bonds. Is this the tip of the iceberg?
http://www.nation.co.ke/.../-/h28131z/-/index.html


Didn't Pattni also create duplicate shares certificates in marshalls company & sold them without the knowledge of CMA??
Mark 12:29
Deuteronomy 4:16
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hisah
#10 Posted : Sunday, January 13, 2013 11:44:33 PM
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Joined: 8/4/2010
Posts: 8,977
The Pandora's box...

http://www.theeastafrica.../-/7sq3g0z/-/index.html

Wonder which bank(s) will be left holding the poop bag...
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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KulaRaha
#11 Posted : Monday, January 14, 2013 9:04:40 AM
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Joined: 7/26/2007
Posts: 6,514
That bond market is filthy...and most of the players are compromised in one way or another.
Business opportunities are like buses,there's always another one coming
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