How Imperial Bank boss stole Sh34 billion over 13 years
Imperial Bank’s former managing director Abdulmalek Janmohamed ran an elaborate fraud scheme that robbed the lender of Sh34 billion over a period of 13 years, forcing the central bank to shut it down earlier this month.
Mr Janmohammed used a network of 20 companies and individuals to execute and cover up the mega fraud that shook Kenya’s financial services sector to the core after the regulators shut it down two weeks ago, citing risks to depositors’ funds.
Details of the fraudulent scheme have emerged from the courts where Imperial Bank directors have sued 20 companies and individuals related to Mr Janmohamed seeking to recover the colossal amount.
FRAUDULENT SCHEME
Imperial Bank on Tuesday filed two suits at Nairobi’s Milimani Courts revealing the anatomy of Mr Janmohammed’s fraudulent scheme, which he kept secret by falsifying the lender’s books of accounts.
Proceeds of the fraud were mainly invested in real estate properties, offering fresh insights into the role that corruption and crime plays in driving Kenya’s housing market boom.
Mr Janmohamed, who died last month, left a vast estate, including prime real estate properties, shareholding in blue chip companies and loads of cash in various banks, according to documents Imperial Bank has filed in court.
The bank on Tuesday sought and got an order freezing all the assets belonging to individuals and companies named as having participated in the fraudulent scheme.
High Court judge Fred Ochieng issued the conservatory orders freezing the assets until Thursday when the defendants are expected to tell the court why the caveat should not be retained until the matter is heard and determined.
SIPHONED BILLIONS
Court documents show that Mr Janmohamed siphoned out billions of shillings from Imperial Bank and manipulated its software systems to hide it. All the irregular transactions were kept off the bank’s books and were known to a small clique of senior managers.
Imperial Bank argues in the suit filed under a certificate of urgency that a speedy determination of the case is necessary because “the receiver’s decision to reopen the bank or liquidate it will ultimately depend on whether the bank will manage to trace and recover the amounts that have been illegally and fraudulently obtained from the bank by the deceased and his associates”.
The court papers further reveal that Imperial Bank’s liability to depositors and buyers of the corporate bond it sold to local investors last month stands at a whopping Sh87 billion — nearly Sh20 billion more than the Sh58 billion that was said to have been at risk.
Imperial Bank, which is associated with the wealthy Popat family, became the second commercial bank to go into receivership since Patrick Njoroge took charge as CBK governor coming after the August closure of Dubai Bank.
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SOURCE: Business Daily
