Standard Chartered Bank #ticker:SCBK has terminated two bank accounts linked to companies of a businessman alleged to have received Sh1.61 billion from National Youth Service (NYS).
In a letter to Assets Recovery Agency (ARA), the lender said it was terminating two accounts holding about Sh4.3 million by June 30, forcing ARA to seek an order for funds to be transferred to its account at KCB #ticker:KCB, KICC branch. A further Sh2.9 million is being held at Equity Bank #ticker:EQTY.
The funds belong to Active Electrons Africa ltd, First Supplies and Ameritrade ltd, linked to businessman James Nderitu Thuita.
In the application before High Court Judge James Wakiaga, ARA said there are reasonable grounds to believe that the funds in the three bank accounts are proceeds of crime.
“There is imminent danger the respondents shall dispose, transfer and dissipate the said funds as there are no court orders currently preserving the funds in issue,” Mr Mohamed Adow of ARA submitted.
Mr Nderitu and his associates were charged in May 29, 2018 and investigations were commenced by DCI into the loss of Sh467 million at NYS.
Earlier court filings show that Mr Nderitu and his firms received Sh1.61 billion from the NYS in the 11 months to November 2017. But only Sh33.8 million was left in the Standard Chartered Bank and Equity Bank accounts on September 7, 2018, when ARA obtained court orders to freeze the accounts.
Mr Nderitu are among dozens of civil servants and business people who have been charged with loss of hundreds of millions at the NYS through fictitious invoices for goods such as firewood and stationery and multiple payments on one supplier invoice.
Last year, Justice Mumbi Ngugi ordered that Sh35 million, which was being held in some 10 accounts belonging to Mr Nderitu, be forfeited to the government after he failed to explain the source of the funds.
The judge said the businessman failed to explain the large deposits from NYS, and in the absence of reasonable explanation, the funds could be assumed to be proceeds of crime.
“In the absence of an explanation regarding the legitimate basis for the transfer of funds, the conclusion is that the funds are proceeds of crime and liable to forfeiture is inevitable,” the Judge said.
Justice Ngugi said Mr Nderitu, Flagstone Merchants, Firstling Supplies among others failed to provide evidence, to show how the suspect funds from NYS were received in their accounts.