Markets

Equity manager testifies in Dyer and Blair case

equity

People walk past Equity Bank branch, Kimathi Street, Nairobi. Dyer and Blair has accused the bank of negligence for relying on forged documents to transfer Sh26.2 million from its account to an impostor. Photo/File

A former operations manager at Equity Bank on Wednesday recalled how he tried to contact a senior executive of Dyer and Blair Investment Bank before he released Sh26.2 million to a man who turned out to be a fraudster.

Joseph Kamau, the operations manager at Equity’s Upper Hill branch in Nairobi between 2008 and 2009, told Mr Justice Eric Ogolla how he received instructions from the branch manager, Mr Stephen Gichuhi, to transfer the funds.

Mr Kamau was testifying in a case where Dyer and Blair has accused Equity of negligence for relying on forged documents to transfer Sh26.2 million from its business account to an impostor.

READ: Mbaru shifts blame to Equity Bank in Sh26m fraud case

Because the instructions were received in the evening of May 12, 2008, Mr Kamau said, he made efforts to contact Dyer and Blair without success.

And owing to the urgency of the transaction, he again tried to call the bank the following morning to no avail.

Thereafter, Mr Kamau said, he decided to contact Dyer and Blair’s former executive director Thomas Kabaki Wamwea to verify whether he was privy to the instructions given that he (Wamwea) and the chairman, Jimnah Mbaru, were signatories to the transaction.

Mr Kamau told the court that Mr Wamwea confirmed the transaction and he subsequently transferred the money.

Dyer and Blair wants the court to determine that Equity Bank was wholly responsible for the loss, saying that no instructions were given by the investment bank to move the funds from its account.

Mr Kamau said that he verified the instructions before releasing the money. But Mr Wamwea, who is a party to the suit, has denied authoring the instruction.

The court was further told that a magistrate’s court convicted the fraudster over the theft. Mr Kamau, however, disagreed with the trial magistrate’s ruling that he (Mr Kamau) was extremely negligent and should have detected the fraud and stopped it.

He tabled a copy of his mobile phone calls and data transcripts as exhibits which revealed that he communicated to Mr Wamwea before he transferred the disputed amount.

Dyer and Blair and Mr Wamwea’s lawyers objected to the authenticity of the document, saying that it could not be verified since the author was unknown.

To confirm whether Mr Kamau called Mr Wamwea, Equity is seeking summons to be issued to Safaricom’s CEO to appear in court and testify.

But Safaricom has opposed the application. On May 7, Mr Mbaru told the court that the funds were withdrawn from the investment bank’s Equity account without necessary approvals.

Dyer and Blair is alleged to have instructed Equity, through a letter dated May 12, 2008, purported to have been signed by Mr Mbaru and Mr Wamwea, to debit its business current account with Sh9,390,250 and transfer the money by electronic means to an account in Barclays Bank, Queensway House branch, held by Abdiwahab Ahmed Nur.

Another letter of May 12, 2008 allegedly authored by Mr Mbaru and Mr Wamwea again instructed Equity to debit Sh16,390,250 for the purchase of $265,000 and to transfer the funds to Tac Traders Ltd’s account at Bank of Baroda in Tanzania.

Mr Mbaru and Mr Wamwea claim the signatures on the purported letters were forgeries and blame Equity for failure to exercise caution and due diligence in obtaining the information from Dyer and Blair.

Dyer and Blair want a refund of Sh26 million and interest at 12 per cent from the date of debiting the account. Equity has opposed the suit saying it was complying with clear and unequivocal instructions duly executed by Mr Wamwea.

The case was adjourned to September 19.