Kenya School of Monetary Studies to be dissolved
An aerial view of Kenya School of Monetary Studies (KSMS) on Thika road.
What you need to know:
- The Treasury Cabinet Secretary objected to the dissolution of the KSMS as a legal entity and was pursuing options to revitalise the school.
- This is despite an agreement to dissolve the school and transfer all assets and liabilities to the banking sector regulator.
Parliament has directed the Registrar of Companies to proceed with the process of winding up the Kenya School of Monetary Studies (KSMS) in line with earlier State plans.
The National Assembly’s Public Investments Committee on Commercial Affairs and Energy has overruled the Treasury’s objection which blocked the dissolution of the Ruaraka-based institution for the last three years.
The Registrar of Companies gazetted a notice to dissolve the Ruaraka-based institution in 2020, but the Treasury wrote to the Solicitor General stopping the process.
The Treasury Cabinet Secretary objected to the dissolution of the KSMS as a legal entity and was pursuing options to revitalise the school.
This is despite an agreement to dissolve the school and transfer all assets and liabilities to the banking sector regulator.
KSMS is owned by the Central Bank of Kenya (CBK) for purposes of training manpower for the financial services sector.
The CBK had expressed frustrations over the slow pace of dissolving the Kenya School of Monetary Studies Limited, a private entity which runs the school that is fully owned by the banking sector regulator.
“The committee recommends that there being no justifiable reason as to why the National Treasury objected the dissolution of the KSMS, the Registrar of Companies to proceed with the winding up process of KSMS, within 60 days of tabling this report,” David Pkosing, who chairs the committee said.
“The committee recommends that within 60 days of tabling this report, the dissolved KSMS be made a directorate under the CBK given that all the assets and liabilities are currently owned and borne by CBK.”
The KSMS is a corporate body by guarantee under the Companies Act, with the CBK as its principal shareholder with a 99 per cent share and the National Treasury as a minority shareholder with one share.
The Treasury Cabinet Secretary objected to the dissolution of the KSMS as a legal entity and was pursuing options to revitalise the school.
“Thereafter, there was a request made by the Cabinet Secretary, National Treasury and Planning dated May 27, 2020, that KSMS should not be dissolved pending broad consultations within the government,” the committee said in its report to the House.
“The Registrar of Companies suspended the process of dissolution of the KSMS as guided by the Companies Act, 2015.”
The CBK board wanted to transform the KSMS into a department within the bank. The CBK had sought the advice of the Attorney General who wrote to the Treasury Cabinet Secretary on April 11, 2022, advising that he should withdraw the objection filed with the Registrar of Companies to enable the finalisation of the dissolution process.
In the alternative, the Attorney General asked the Cabinet Secretary to provide reasons for any continued objection to the said process.
On June 13, 2022, the Treasury informed the Attorney General that given the enormous public investment and infrastructure development at the school, there is a need for broader consultations within the government to determine the best way forward concerning the future of the institution.
The CBK resolved to dissolve KSMS because it was unviable as a subsidiary and required a guarantee from the CBK each year to obtain a clean audit report.
“The committee noted that despite KSMS being a separate legal entity, it fully depends on the CBK for its operations,” Mr Pkosing said in a report on the scrutiny of CBK books of accounts for the year to June 2022.
“The committee further noted that the request by the CBK to dissolve the KSMS will make the institution fully a department of CBK hence certainty in its going concern.”
Auditor-General Nancy Gathungu in her CBK audit report for the year ended June 30, 2021, called for dissolution, noting KSMS had operated without a functional board for the past six years.
