The appointment of Dr Dominic Njeru as the acting CEO of Consolidated Bank of Kenya has plunged the government-owned lender into controversy. Stakeholders are raising alarms over his alleged involvement in Sh19 million fraud under investigation by the Ethics and Anti-Corruption Commission.
The move bypassed standard governance protocols, drawing sharp criticism from the Central Bank of Kenya and the banking sector. Meanwhile, the bank continues to post profits, but questions linger over whether the leadership crisis could undermine its fragile recovery.
Appointment of Scandalous Dominic Njeru As Consolidated Bank Boss Triggers Regulatory and Political Uproar
The Treasury’s unilateral decision to place Dr. Dominic Njeru at the helm of Consolidated Bank has provoked a storm among regulators and board members. Njeru, a University of Nairobi lecturer, is under scrutiny by the Ethics and Anti-Corruption Commission (EACC) over allegations of misappropriating Sh19 million. The funds were reportedly linked to Direct Service Providers payments at the Faculty of Business and Management Sciences, with possible mismanagement of Sh468 million over five years.
The Central Bank of Kenya (CBK) has refused to clear Njeru pending the mandatory fit and proper test. Timothy Kimutai, Deputy Director of Bank Supervision, wrote to the bank highlighting Section 9A of the Banking Act. The law forbids appointing anyone as a senior officer without CBK certification. CBK Prudential Guideline CBK/PG/02 Clause 3.7.3 reinforces that no senior officer can assume their role without regulator approval.
CBK demanded submission of the Fit and Proper Form CBK/IF 1-2, along with supporting documentation, to legitimize Njeru’s appointment. The regulator’s stance underscores growing concern over governance lapses at the government-owned lender.
Political compromise drives controversial appointment
Dr Njeru’s rise to CEO stems from a political compromise orchestrated by President William Ruto. Initially, Njeru and his brother, Charles Muriuki Njagagua, were linked to the impending Mbeere North parliamentary seat. Njagagua, who became chairman of Consolidated Bank in February 2023, was later shifted to serve as the President’s legal adviser.
Upon Njagagua’s exit in October 2025, he proposed his brother Njeru as CEO, sidestepping conventional protocols. The outgoing CEO, Sam Muturi, had recently secured a three-year contract but was abruptly dismissed. Muturi has petitioned the court, alleging the Treasury unlawfully overruled the board, violated his constitutional rights, and denied fair labour practices.
The political interference has heightened scrutiny of the bank, with critics questioning whether appointments are being made to serve political interests rather than corporate governance.
Allegations of fraud shadow Njeru
Dr Njeru’s tenure is already clouded by allegations of fraud. The University of Nairobi wrote to the EACC requesting an investigation into alleged misuse of Sh468 million over five years in faculty payments. EACC has yet to conclude investigations, leaving Njeru under a cloud of suspicion.
Despite these allegations, Njeru assumed control of the CEO office and even used the bank car for political campaigns in Mbeere North for UDA candidate Njeru Muthende. Such actions have sparked ethical and legal debates, raising questions about accountability in state-owned enterprises.
Bank performance continues amid governance crisis
While the boardroom faces upheaval, Consolidated Bank has reported a Sh80.2 million profit for the nine months ending September 2025. This marked a significant turnaround from a Sh131.9 million loss in the same period a year earlier. The gains were fueled by interest earnings from Treasury bills and bonds, which rose to Sh583 million from Sh278 million, while interest expenses declined by 9 percent to Sh581 million.
Acting Head of Finance Fred Ronoh confirmed that net interest income grew 27 percent, from Sh711 million to Sh903 million. Government securities held by the bank increased to Sh8 billion, up from Sh4.6 billion, even as the loan book shrunk 2.3 percent due to cautious lending practices amid rising defaults.
However, governance remains fragile. The bank operates without a substantive board or permanent CEO, and more than half of top management is serving in acting capacities. Florence Oluoch, the sole board director, signed the financial statements, highlighting the structural gaps in authority and accountability.
The Treasury, which owns 93.5 percent of the bank, remains silent on the delayed appointment of a substantive board and permanent CEO. The move to install Dr Njeru in acting capacity without regulatory clearance reflects deep tensions between political influence and corporate governance norms.
As the scandal unfolds, investors, regulators, and the public will closely watch whether Consolidated Bank can sustain its financial recovery or if leadership controversies will erode gains. The saga of Scandalous Dominic Njeru underscores the fragile balance between politics, accountability, and financial stewardship in Kenya’s state-owned institutions.
