DPP Noordin Haji last week announced a deferred prosecution deal with five commercial banks which paid fines totalling Sh385 million to defer prosecution of the lenders and their executives for violating anti-money laundering laws.
The deal temporarily eased worries for the banks and their executives of going to jail but that does not mean the banks are off the hook completely.
According to the DPP, his office will initiate prosecution should the banks breach a set of agreement between his office and them.
Bank executives are still open to prosecution for facilitating theft of billions of shillings at the National Youth Service despite paying Sh385 million to avoid court charges over fraud at the youth agency.
The Director of Public Prosecutions (DPP) Noordin Haji last week announced a deferred prosecution deal with five commercial banks which paid fines totalling Sh385 million to defer prosecution of the lenders and their executives for violating anti-money laundering laws.
The deal temporarily eased worries for the banks and their executives of going to jail but that does not mean the banks are off the hook completely.
According to the DPP, his office will initiate prosecution should the banks breach a set of agreement between his office and them.
“We’ve entered into deferred prosecution which means if they continue breaching the agreements we will prosecute them,” the DPP said while announcing the deal.
The five top commercial banks were to face criminal prosecution for facilitating the NYS scam after they received about Sh3.5 billion believed to have been stolen from the State agency.
The DPP said the banks had failed to report large transactions or to undertake proper due diligence on customers. He also accused them of approving large transactions without proper documents.
In the deal that will see the bank bosses escape jail for now, Equity Bank, Kenya’s biggest bank by customer numbers, paid the biggest fine to ODPP to avoid being prosecuted for failing to report suspicious transactions linked with the theft of funds at the NYS.
Equity Bank #ticker:EQTY paid Sh120 million while Standard Chartered Kenya #ticker:SCBK, Diamond Trust #ticker:DTK, KCB Group #ticker:KCB - Kenya’s biggest bank by assets, and Co-operative Bank #ticker:COOP paid Sh100 million, Sh80 million, Sh60 million and Sh25 million respectively.
In 2018, the Central Bank of Kenya had fined the five banks Sh392.5 million for failing to report suspicious transactions linked to the NYS scam.
Under the deal, the agreement requires the bank to implement various anti-money laundering measures, which include taking disciplinary action against all staff members who were involved or implicated in the scandal.
“The bank shall institute an internal disciplinary mechanism related to the offences and shall report to the ODPP within the term the action taken against the staff if found culpable,” says the agreement between the DPP and the lenders.
Under the agreement, the banks were also compelled to provide information that would help State agencies nab persons suspected to have siphoned cash from the NYS. The ODPP said that it would today reveal what each of the five banks had paid to avoid prosecution.
Mr Haji told the lenders that they also risk prosecution should they demand reimbursements from insurance firms to cover the millions paid to the office of DPP and Central Bank of Kenya (CBK) for facilitating the fraud.
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