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Ex-Chase Bank boss gave firms linked to him Sh1 billion unsecured loans

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Ex-Chase Bank chairman Zafrullah Khan. FILE PHOTO | NMG

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Summary

  • Mohammed Zafrullah Khan did not repay the loans advanced to Colnbrook Holdings Limited and Camellia Investments Limited between 2012 and 2015.
  • Mr Khan did not provide loan securities, details of directors and the financial standing of the companies when seeking the loans.
  • Chase Bank has since been bought by Mauritius’s SBM Holdings.

The former chairman of the collapsed Chase Bank advanced companies associated with him loans amounting to over Sh1 billion without securities, a court heard yesterday.

Testimony presented before senior principal magistrate Martha Mutuku showed Mohammed Zafrullah Khan did not repay the loans advanced to Colnbrook Holdings Limited and Camellia Investments Limited between 2012 and 2015.

The magistrate heard that Mr Khan did not provide loan securities, details of directors and the financial standing of the companies when seeking the loans.

A former senior credit manager at Chase Bank, James Kinuthia Njoroge, said on Tuesday that Camellia had not repaid an unsecured loan of Sh603,218,124 when the bank was put in receivership in April 2016.

He was testifying in a suit where Mr Khan and 10 others, including the bank’s senior managers, face nine charges, among them, stealing by a director and failing to comply with anti-money laundering procedures.

The bank has since been bought by Mauritius’s SBM Holdings.

The receiver manager seconded to Chase Bank from Kenya Commercial Bank, Paul Luso, wrote to Camellia to repay loans within seven days but the latter has not done so to date.

A dollar account loan of $4,715,000 had accrued interest to the tune of Sh482,108,750 as at December 30, 2015.

Mr Njoroge said that Camellia, whose directors were Mr Khan and a former Chase Bank general manager James Mwaura, has since changed its name to Riverside Mews Investments Limited.

Mr Khan is charged alongside former senior Chase Bank employees Duncan Kabui Gichui, James Mwaura and Makarious Omondi Agumbi, Amira Claudia Wagner, Mohammed Najifrullah Khan, and Camellia, Colnbrook, Golden Azure Investments and Cleopatra Holdings Ltd.

They have been charged with conspiring to defraud the bank by pretending that loan disbursements of Sh529,328,000 and $1,326,000 to Camellia, Colbrook, Golden Azure and Cleopatra were genuine.

They are accused of committing the offence between August 28, 2009 and March 3 2016.

Mr Khan claimed the monies were Musharak or sharia-complaint property loans.