Mbaru shifts blame to Equity Bank in Sh26m fraud case

Dyer and Blair Investment Bank chairman Jimnah Mbaru has accused Equity Bank of negligence for relying on forged documents when it allegedly paid Sh26.2 million from its business account to impostors.

Mr Mbaru, a key witness in a suit the investment bank has filed against Equity, wants the court to find the bank wholly liable for the loss. He has forwarded his witness statement to court ahead of the hearing on December 14.

Dyer and Blair’s former executive director Thomas Kabaki Wamwea is a party to the suit having allegedly authored a letter instructing Equity to make the “dubious” payments. He has denied giving such instructions either orally or in writing.

“Equity was grossly negligent and is wholly liable for the loss suffered by Dyer and Blair for making payments without authority,” says Mr Mbaru in his sworn statement.

He further states that he gave evidence in a case where one of the fraudsters was charged and convicted of stealing the money from Equity.

The investment bank is alleged to have instructed Equity, through a letter of 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 the Bank of Baroda in Tanzania.

But the two top bankers allege that the signatures on the purported letters are forgeries.

They blame Equity for failure to exercise more caution and due diligence in obtaining the information from Dyer & Blair.

The bank wants a refund of Sh26 million and interest at 12 per cent from the date of debiting the account. Equity has countered that it debited Dyer and Blair’s account by complying with clear and unequivocal instructions duly executed by the bank’s chairman and its former executive director, Mr Wamwea.