More
damning details are now emerging that Equity Bank, a respected financial
institution, has been compelled by the Central Bank of Kenya to explain
circumstances under which it is Four Ways Towers branch opened and operated “a
fraudulent account” where millions of shillings are said to have been lost by
an aggrieved party.
Central
Bank of Kenya manager in charge of the bank’s supervision Stephen K’Odera, in a
letter seen by your favourite authoritative newspaper Weekly Citizen told
Equity Bank’s managing director James Mwangi, to furnish him with information
regarding account No 0010293196441 owned by Interactive Advertising Limited,
after George Karanja wrote to him complaining that the branch had failed to do
proper due diligence when opening the account which was later used to defraud
his company.
CBK
is said to have asked Mwangi: “Please investigate the issue raised and advise
us on the circumstances surrounding the case and resolution thereof.”
The
matter has since been filed before the High Court in which it is alleged that
Equity Bank connived to open a fraudulent account for a customer without his
approval or authority and thereof loss of millions of shillings.
Equity
Bank must clear its name given the fact that the case has been dragging on for
months. The leading regional bank, with a sordid customer base will be hard
pressed to explain to the current status and would be account openers and if it
was not in any way not privy to
underhand deals that might have
occasioned the account opening, operations and the related activities including
communications that might have taken place between the bank and those who have
been alleged, both before the High Court and CBK, to have operated it.
This
is also at a time the bank craves for confidence as it launches thin sim
overlay technology toward the end of this month of August. The bank having
created a subsidiary, Finserve, to run its Mobile Virtual Network Operator and
it now remains to be seen if customers can trust them while they face these
serious integrity issues.
The
bank might even be compelled to seek to settle the matter out of court as
documents in our possessions show that the sooner it is dispensed with the
better, according to an insider at CBK
who did not want to be named.
Equity
Bank through its Four Way Towers – Corporate Section is sued in a case in which
money totaling Sh19,197,200 is said to have been variously withdrawn from
account No 0010293196441 opened under
name of Interactive Advertising Limited.
The
signatories are alleged to be Edith Njeri Kimani and Diana Kanyi Wambugu,
alleged directors of company, leaving out original and the prominent director
and owner. It is alleged that a senior manager at Equity is known to Kimani.
The
Plaintiff, George Karanja, through
Atonga Miyare and Advocates allege that documents which were used were
fraudulently prepared and used to open an account without his authority and
approval, and Equity Bank on its part, allegedly failed to exercise due diligence at the Attorney General’s
Chambers to ascertain who the real directors of the company.
Questions
arise as to who were the authorising
signatories in opening of the account at
its Four Way Towers on November 19 2008
where the said amount was deposited and subsequently withdrawn on various
dates.
According
to documents lodged in the High Court, Equity bank, Four-Ways Towers branch
allowed Ms. Kimani of ID No 5482883 (PIN: A00126534F) and Ms Wambugu of ID No.
22541623 (PIN: A003750595D) as directors of the company.
Other
documents which have been filed in court include an alleged copy of memorandum
of understanding of articles of association which has been allegedly doctored
to include Ms Wambugu as a director in place of Karanja, the lead director of
the advertising company. The handwritings indicate that the document true to
the facts is indeed invalid.
The
signatories and names appended on certificate of incorporation of the Interactive
Advertisement Limited, and the domestic taxes department of the Kenya Revenue
Authority among others, used in opening the accounts are the same, and where Ms
Wambugu originates as a director
The
Equity Bank will have to explain why between November 19 2008 and March 24 2011
it collected money totaling Sh19,197,200 in the foregoing fraudulent and secret
account held in the same name of Interactive Advertising Limited. Karanja also
disputes a meeting that was allegedly held November 3 2008 where resolutions to
open the account with Equity Bank were made via a board resolution.
The
plaintiff categorically states that these irregularities have been perpetrated against him and the
company sinceNovember 19 2008 until the
bank account became dormant sometimes in February 2013, with the full
knowledge, connivance and acquiescence of Equity Bank, thus “permitting a
stranger to be signatory to his bank’s account”.
He
says Equity Bank conduct amounts to conflict of interest and a gross derogation
of bank customer relationship and the Central Bank of Kenya Prudential
Guidelines while acting negligently towards the plaintiff resulting into loss
of funds by him and the company.
The
lawyers claim that Equity Bank failed to conduct and/or carry out due diligence
before opening the account and allowing an imposter to pose as a director and
secretary of the company in the opening of the account fraudulently and without
mandatory information.
The
Equity Bank is also alleged to have used Karanja’s co-director’s personal
address mobile phone number, email address and other personal contact details
instead of those of Interactive Advertising Limited officially registered
postal and email statements of the account and communications thereon.
He
therefore, claims loss of Sh19,197,200 and further losses of business and
income as a result of the bank’s conduct who on many accounts ignored several
demands and entreaties by the plaintiff. This will also include interest on the
sum total, general damages for loss of income and business and costs at
commercial rates from November 19 2008 to present.
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