Kenya prosecutor says ex-Family Bank executives to be charged

NAIROBI (Reuters) - Kenya's director of public prosecution has ordered seven former executives at mid-tier lender Family Bank be charged with aiding or abetting money laundering as the East African nation looks to tighten banking oversight. Family Bank, whose shares are traded on the Nairobi Securities Exchange's over the counter market, appointed a new managing director and chief executive, David Thuku, in May to replace outgoing CEO Peter Munyiri. Munyiri, who worked at the bank for five years, is one of the executives named. Six other former executives cited by the director of public prosecution include the former senior branch manager and the ex-head of risk and compliance. Kenya has stepped up supervision after three small banks were taken into administration in the past year or so. It has also tightened rules against money laundering to support its goal of creating an international financial hub. "I direct that the bank and the responsible bank officials named ... be charged for aiding or abetting the commission of a money laundering offence," Keriako Tobiko, director of public prosecution, said in a letter obtained by Reuters. The letter is part of documents submitted at the country's high court, by the prosecutor's office, in response to a case brought by Family Bank seeking orders to stop prosecution over the allegations of aiding money laundering. In the letter, Tobiko also ordered that the bank and Munyiri with three executives be charged with failure to comply with reporting obligations. The letter was addressed to the director of criminal investigations, Ndegwa Muhoro. A Family Bank official said the bank was aware of the document but had no immediate comment. He also confirmed that all those named were no longer working at the bank. CEO Thuku said he needed time to review the statement. It was not immediately possible to reach Munyiri or other former executives named by the director of public prosecution. This week, Family Bank issued a profit warning for 2016 citing higher funding costs and expenses associated with job cuts at the institution. It did not give details about how may jobs were being eliminated. (Reporting by Humphrey Malalo and Duncan Miriri; writing by Edmund Blair; editing by Jason Neely)