Abubakar Hassan
Advest Company Ltd
Capital Markets Authority
Central Bank of Kenya
Chris Kisire
Edge Capital
Fozi Investment Ltd
High Court’s Judicial Review Division
Lawrence Aswani
Messrs Advest Company Ltd
Munir Ahmed
National Bank
National Bank of Kenya
Sheikh & Company Advocate
Solomon Alubala

How National Bank lost cash in suspect scheme

NAIROBI, KENYA: The bosses of the National Bank of Kenya made deals to enable them to siphon billions while at the same time hiding from the public the lender’s true state, an affidavit filed in court has said.


CMA: How bosses schemed to loot bank

The scheme involved fictitious firms drawing blank cheques and back-dating of money from property sales.

This is according to a replying affidavit filed at the High Court’s Judicial Review Division by the head of investigations at the Capital Markets Authority (CMA), Abubakar Hassan, against former NBK boss Munir Ahmed.

Mr Ahmed is seeking to be exempted from the CMA punishment. The affidavit says NBK, which had liquidity issues, approached two firms to help it convince large depositors to put their money in the bank.

Edge Capital Consultancy and Advest Company Ltd were selected. Edge was not even a registered company when National Bank contracted it in May 2014. The firm got registered four months later.

“The contract sign-off forms for Messrs Advest Company Ltd and Edge Capital consultancy, who were deposit mobilisation agents, were signed by the applicant (Munir Ahmed), Finance Manager Lawrence Aswani, former chief finance officer Chris Kisire and the former head of Treasury, Solomon Alubala,” Mr Hassan said.

He added that the firms defrauded the bank of Sh991 million, claiming they had brought State agencies on board. However, when pressed, they said they had not met the mobilisers.

Ahmed was said to have approved the questionable invoices for up to Sh5 million. All this happened under the watchful eye of the Central Bank of Kenya. The lender also hid 11 non-performing loans by claiming they had been restructured.

CMA said NBK overstated its profits by hiding bad loans of Sh2.5 billion in the June and September numbers, and only made good its books at the end of December 2015.

The bank sold off branches and lied to the public that it had made Sh847 million by June, only for the figure to be scaled down to Sh111 million by December. “Other income (which included disposal of assets) reduced from Sh1.23 billion in the September 2015 published accounts to Sh466 million in December 2015,” Abubakar said in his affidavit.

Ahmed has also been accused of influencing his brother’s firm, Fozi Investment Ltd, to get a loan on friendly terms at the bank while his sister’s firm, Sheikh & Company Advocate, was hired to offer legal services to NBK. Ahmed has disputed the Sh5 million fine slapped on him by CMA.

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