Equity to refund Dyer & Blair Sh20m paid out to fraudster

Equity Bank has lost a protracted court battle with Dyer and Blair Investment Bank after the court directed it to refund over Sh20 million that was fraudulently transferred from one of its client’s account.

High Court Judge Eric Ogola has directed the bank to pay Dyer & Blair Sh26,250,250 plus interests at court rates from May 12, 2008, being the time when the funds were transferred into the account of a fraudster who had claimed to be a director of the investment bank.

An employee of Equity Bank had testified in court that his branch manager gave him two instructions emanating from Dyer & Blair. These were two sets of letters which he was to confirm and then transfer the money.

He said he called one of the directors of Dyer & Blair using a phone on the account application form. He alleged that the said director did not pick up the phone so he wrote a text message. The said director then allegedly called him and authorised the transactions.

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An officer who testified in court produced a printout showing the Equity Bank employee had sent the text message, but Mr Justice Ogola said his evidence could not be relied upon since he had not been authorised by Safaricom to testify.

“In the absence of any such documentary evidence to show that the said director called Equity Bank to confirm the instructions in the disputed letters, it is difficult for the court to ascertain the veracity of Equity Bank’s position that the said director confirmed the disputed letters,” Mr Justice Ogola said.

He said Equity Bank ought to have checked and verified details of the letter or better still, it should have confirmed the authenticity of the letter in a more official manner.

In his testimony before the court, the alleged Dyer & Blair director denied issuing instructions authorising the transfer through a phone conversation and further dismissed the signatures on the purported letters of instructions dated May 12, 2008 as forgeries.

“The phone calls made appeared rather casual and in my view cannot meet the standards of due diligence and care required of such an office,” said Mr Justice Ogola.