Lifting the veil off Imperial Bank’s 13-year elaborate fraud scheme
GRAPHIC | CHRISPUS BARGORETT
What you need to know:
Depositors and bondholders have to wait for an ongoing forensic audit of the lender to be complete before they know the full extent of the massive fraud ring.
The Central Bank of Kenya has hired Washington DC-based FTI Consulting to comb through Imperial Bank’s books.
Revelations that Imperial Bank’s long-serving group managing director Abdulmalek Janmohamed discreetly siphoned Sh2.6 billion annually from the mid-tier lender has sent shockwaves in Kenya’s banking sector.
Mr Janmohamed is alleged to have fraudulently transferred a total of Sh34 billion from depositors’ cash to his entities and bank accounts between 2002 to September 15, 2015 when he died, according to court filings.
The 56-year-old banking executive pulled off the elaborate scheme that was so smart way that only his death opened a Pandora’s box into his deceptive dealings. Mr Janmohamed held a bachelor’s degree in finance and management of data systems from Syracuse University, one of America’s prestigious schools.
To execute the decade-old scheme, he enlisted the services of Imperial Bank’s head of credit Naeem Shah and chief finance officer, James Kaburu, documents filed at the High Court show.
Mr Shah, currently the Imperial Bank’s acting managing director and Mr Kaburu (current deputy managing director) were the whistle-blowers of the grand scam at the lending empire owned by the wealthy Popat family.
“The deceased (Mr Janmohamed) had for some time instructed them to carry out certain false, fraudulent, unlawful and illegal activities in the Bank,” reads one of the sworn affidavits filed on Tuesday.
“They had been instructed to manipulate the Bank’s books so as to allow the false, fraudulent and unlawful acts.”
Mr Janmohamed had been with Imperial Bank since its inception in 1993, rising through the ranks to head the lender in 2006. He individually owned a five per cent stake at the lender. The court documents say that cash was wired to his companies and bank accounts.
E. Tilley (Muthaiga) Ltd, one such company, has admitted to receiving Sh10 billion from Imperial Bank and has expressed readiness to return the loot, according to court documents.
Depositors and bondholders have to wait for an ongoing forensic audit of the lender to be complete before they know the full extent of the massive fraud ring. The Central Bank of Kenya has hired Washington DC-based FTI Consulting to comb through Imperial Bank’s books.
The bank was unexpectedly placed under receivership on October 13, the same day it was to list a corporate bond on the Nairobi bourse.
