Popat brother sucked into raging Imperial Bank war

Simba Corporation, the motor and hospitality company owned by businessman Adil Popat, withdrew Sh729 million from Imperial Bank four days before the lender collapsed, the Kenya Deposit Insurance Corporation (KDIC) has said.

The KDIC, which is the bank’s receiver manager, says in documents filed at the High Court in Nairobi that Simba Corporation withdrew the colossal amount in four instalments from one of 29 accounts it held at Imperial Bank.

Mohamud Ahmed, Imperial Bank’s receiver manager, says in court papers that the manner in which Simba Corporation withdrew the Sh729 million suggests that the company was either tipped off by the collapsed lender’s directors or was being cushioned against the impending collapse. 

Mr Ahmed says American audit firm FTI Consulting has established through a forensic audit that Simba Corporation also transferred millions of shillings from its Standard Chartered account to several accounts held at Imperial Bank and that the American audit firm is investigating all the 29 accounts Simba held at the bank.

FTI has also discovered 12 suspicious transfers totalling Sh190 million, some of which involved direct wiring of funds from Standard Chartered to fictitious accounts at Imperial Bank.

In some instances, money would be transferred to one of Simba’s accounts at Imperial Bank before being redirected to the numerous accounts.

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Insider information

“The records at Imperial Bank show that between October 1, 7, 8 and 9, 2015, following the unexplained death of the then group managing director and when Alnashir Popat, as the chairman, was in charge of running the bank, a total of Sh729,057,404 was withdrawn by Simba Corporation in circumstances that suggest that the directors led by Alnashir Popat were misusing insider information relating to the massive fraud to either protect related parties or further defraud the bank,” Mr Ahmed says.

Mr Alnashir Popat, the former chairman of Imperial Bank’s board of directors, is a brother to Mr Adil Popat, who owns Simba Corporation. The two are sons of the late billionaire businessman Abdul Karim Popat.

The senior Popat, previously served as chairman of both Simba and Imperial Bank. But upon his death in March, 2013, the family wealth was distributed among his four children.

Simba Corporation has interests in the motor industry where it owns Simba Colt Motors and in the hospitality sector, where it owns the five-star Villa Rosa Kempinski, and Kisumu’s three-star Acacia Premier hotel.

Simba Corporation had in an earlier interview revealed that the company was among the big depositors at Imperial Bank but insisted that “there are no related party transactions” between Simba and Imperial Bank.

Dinesh Kotecha, the company’s executive director, said in the interview that Standard Chartered and Citibank were Simba Corporation’s primary bankers.

The KDIC’s claims, which have effectively pulled the unassuming Mr Adil Popat into the Imperial Bank saga, made the claims in reply to a suit two companies — Sandview Properties and Upperview Properties — have filed against the fallen bank and its receivers.

Sandview and Upperview Properties are jointly owned by Imperial Bank’s former managing director, Abdulmalek Janmohammed, and some of the bank’s directors, including Mr Alnashir Popat.

The KDIC says that the three fictitious accounts it claims are related to Simba Corporation, and which had transactions with Imperial Bank, are listed as B Mohamed, M Khan and Jignesh Shah.

Mr Alnashir Popat has opposed the KDIC’s allegations, arguing that they are a diversionary tactic the receiver manager is using to undermine Sandview and Upperview’s case before the court.

“The documents relied upon and which Alnashir Popat avers are with Imperial Bank (under receivership) have not been furnished to the court. The said averments by Mr Ahmed are diversionary and meant to lead the applicants and the court into issues and matters that are tangential to the real issues at hand,” says Mr Alnashir Popat, who is also a director of Sandview and Upperview.

The KDIC says it is important that the court understands the relationship between Sandview, Upperview and Imperial Bank directors and their intentions to create a smokescreen that will stall the receiver manager’s plans to determine the culpability of the collapsed lender’s shareholders.

The Imperial Bank receiver manager says the FTI audit will reveal the true purpose of the Simba Corporation’s transactions with accounts in the names of non-existent customers. The fictitious accounts, he adds, were used to cover up massive theft of funds from the collapsed lender.

Mr Ahmed reckons that there are four further transactions involving Mr Adil Popat, Simba Colt Motors and the fictitious B Mohamed account.

“B Mohamed is written in the name field for a savings withdrawal dated March 20, 2013 but it is evident that Mr and Mrs Adil Popat was written and then crossed out. This form was signed by Adil Popat. In addition a chit is attached to the savings form addressed to NS, presumably Naeem Shah, and written in Abdulmalek Janmohammed’s handwriting,” Mr Ahmed says.

The KDIC believes that Mr Janmohammed orchestrated a Sh34 billion embezzlement scheme at Imperial Bank and enlisted the help of senior bank managers James Kaburu and Naeem Shah.

The receiver manager holds that players in the cloak-and-dagger embezzlement scheme used handwritten chits to make various fraudulent cash transfers.

Mr Alnashir Popat, on behalf of other Sandview shareholders, has opposed Mr Ahmed’s referral to the death of the managing director, Mr Janmohammed, as “convenient and unexplained”, saying the statement is scandalous.

Mr Ahmed has, in the same suit, claimed that the owners of Imperial Bank registered a separate company which they used to acquire a stake in a new bank.