In a dramatic legal twist, Equity Bank Kenya Limited has been barred from hiking interest rates on loans issued to its former head of internal audit, Bildad Khaemba Fwamba.
The former auditor, who was sacked in October 2024 over a reported Sh1.5 billion fraud at the bank’s salary processing unit, is now fighting back.
The High Court has granted him temporary relief, stopping the lender from adjusting his loan terms amid an unresolved employment dispute.
The court said Equity’s move would cause Khaemba irreversible damage while the bank holds enough collateral to stay secure.
If the court eventually rules that Mr. Khaemba’s firing was unjust, it could open up a wave of scrutiny into the bank’s internal investigation processes and how it treats long-serving employees under suspicion. [Photo: Courtesy]
Court Blocks Equity from Hiking Loan Rates in Sh83 Million Case
High Court judge Agnes Kitiku ruled in favor of Mr. Khaemba, stopping Equity Bank from adjusting his mortgage and equity release loan rates—initially offered at staff-friendly terms.
Khaemba, who served the lender for over two decades, had taken out loans worth Sh83 million between 2010 and 2023 while enjoying staff rebate rates of 6% and 8% respectively.
But just weeks after his October 9 dismissal, the bank sent him a letter dated November 27 stating his interest rates would rise sharply—his mortgage would go from 6% to commercial rates, while the staff equity release loan would jump to 13%.
The court stepped in, warning that the drastic hike would harm Khaemba, especially since his properties had been offered as collateral.
“The claimant continues to repay the loans at the agreed staff rates, and the bank has not shown he defaulted,” ruled Justice Kitiku. She added that Equity Bank still holds title deeds to the charged properties, shielding it from any real loss if the dispute drags on.
The judge noted that Khaemba had “satisfactorily demonstrated” the risk of suffering “irreparable loss” if the bank was allowed to change the loan terms before a final verdict on his case.
The legal standoff stems from Khaemba’s abrupt sacking in October 2024 over an alleged payroll fraud involving Sh1.5 billion. According to the bank, suspicious RTGS (Real Time Gross Settlement) transactions had been detected on its salary processing platform, prompting an internal probe.
The dismissal letter accused him of “several omissions or commissions, failure or negligence” in his role within the audit function. But Khaemba insists the accusations were vague, general, and not backed by specific claims of wrongdoing.
He argues that during the period in question, he was on secondment to Equity Group Holdings Ltd and was only briefly attached to the Kenyan unit—from February 15 to April 15, 2024. During this time, he says his focus was on preparing for a board audit committee meeting held on March 5 and other strategy assignments.
Khaemba claims he was not directly overseeing the payroll operations under investigation, a detail he believes undermines the bank’s reasons for termination.
He joined Equity in 2001, when it was still trading as Equity Building Society, and rose through the ranks to become the group’s chief internal auditor. His long service record, multiple transfers, and secondments across the group add weight to his claim that the dismissal was uncalled for.
Bank Claims Valid Dismissal and Denies Loan Rights
Equity Bank is defending its decision, arguing that the dismissal followed the law and that due process was followed. The lender insists that Khaemba’s reassignment to the Kenyan unit as Director of Internal Audit gave him direct responsibility over system controls, including the salary processing platform now under scrutiny.
The bank adds that only current employees are entitled to rebated interest rates on loans. Since Khaemba was terminated, they say, he no longer qualifies for staff benefits. Allowing him to continue enjoying the lower rates, Equity argues, would be equivalent to giving him back employment perks without a job.
In court documents, the bank said there was no proof that Khaemba was unable to pay the new rates, adding that he had been meeting his loan obligations without difficulty. However, the court found that financial hardship is not the only factor and that unfair treatment and possible reputational damage also count.
More Questions Than Answers
The Equity heist saga is far from over. While the court has blocked the bank from enforcing new loan rates—for now—the question of whether Mr. Khaemba was fairly dismissed remains central.
If the court eventually rules that his firing was unjust, it could open up a wave of scrutiny into the bank’s internal investigation processes and how it treats long-serving employees under suspicion.
On the flip side, if Equity proves that its case was valid, it could justify clawing back benefits from any employee linked to fraud or oversight failures.
But for now, the High Court has sent a clear message—banks must not weaponize financial tools to punish former employees whose cases are still pending.
The ruling preserves the principle of due process and serves as a warning to corporate giants that contract terms—even on loans—cannot be altered at will.
Renowned billionaire businessman Peter Munga, the founder of Equity Bank, has suffered a legal setback after the High Court dismissed his application to block the auction of his 75 million shares in Britam Holdings.
The shares, valued at approximately Sh604 million, are set to be auctioned by ABC Bank to recover a Sh433.76 million loan defaulted by Equatorial Nut Processors, a company in which Munga holds a 92% stake.
In a ruling delivered on Wednesday, High Court Judge Alfred Mabeya stated that Munga, as a guarantor of the loan, had no valid grounds to prevent ABC Bank from attaching his shares. The court emphasized that the businessman had willingly offered his shares as collateral and was legally bound to repay the loan following the default by Equatorial Nut Processors.
“In the absence of such payment, the court finds that the prayer for a permanent injunction preventing ABC Bank from realizing the security is untenable and is disallowed,” Justice Mabeya said in the judgment, which was delivered by his counterpart, Justice Francis Gikonyo.
The court also dismissed Munga’s application for a temporary injunction, filed in October 2024, to restrain ABC Bank, ABC Capital, and Equatorial Nut Processors from advertising, selling, or transferring his shares. The application sought to prevent the auction of the shares, which were used as security for a loan facility advanced to Equatorial Nut Processors to fund a World Food Programme contract.
The Loan Dispute
The dispute stems from a loan facility provided by ABC Bank to Equatorial Nut Processors, a macadamia, peanut, and cashew nut processing company located near Maragua town. Munga, who serves as a director of the company, signed a personal guarantee and indemnity in favor of ABC Bank, agreeing to repay the loan in the event of default.
When Equatorial Nut Processors failed to meet its repayment obligations, ABC Bank issued a demand letter to Munga on September 24, 2024, requiring him to pay Sh433,767,398.33. The bank threatened to sell his Britam shares if the payment was not made.
Munga, however, contested the bank’s demand, arguing that he intended to use the shares to secure another loan. He also claimed that the demand letter violated the in-duplum rule, which caps loan interest at the principal amount. Additionally, he maintained that other securities registered before his shares should be prioritized under the doctrine of priority.
Court’s Decision
In its ruling, the court rejected Munga’s arguments, stating that his plans to use the shares as collateral for another loan were irrelevant to the debt owed by Equatorial Nut Processors. The judges noted that Munga, as a guarantor, had assumed full responsibility for repaying the loan, including any outstanding principal, accrued interest, fees, and penalties.
“By executing the deed of guarantee, the plaintiff [Munga] assumed responsibility for the outstanding loan balance. This meant that the plaintiff is legally bound to repay the entire loan amount,” the court said. “The lender is entitled to initiate recovery actions directly against the plaintiff without first being required to pursue the borrower.”
The court also dismissed Munga’s claim that he would suffer irreparable loss if the shares were auctioned, noting that the shares’ value (Sh280 million) was insufficient to cover the loan amount (Sh433.76 million). The judges emphasized the need to balance Munga’s right to property with ABC Bank’s right to recover its funds.
A History of Debt Tussles
This is not the first time Munga has faced debt-related challenges. In 2023, three of his properties were set to be auctioned over unpaid dues. In 2017, he narrowly averted the auction of five houses in Nairobi’s Kasarani area, valued at Sh400 million, after making a last-minute payment to Jamii Bora Bank (now Kingdom Bank).
Despite these setbacks, Munga remains a significant player in Kenya’s business landscape. He directly owns 75 million shares in Britam and holds substantial stakes in two investment vehicles—EH Venture Capital and EHL 2022—which collectively own 405 million Britam shares worth Sh3.26 billion.
The auction of Munga’s Britam shares could have ripple effects on the insurer’s stock performance and investor confidence. Britam, a leading insurance and investment firm, has seen its shares fluctuate in recent years, and the sale of such a large block of shares could further impact its market valuation.
In April, 2023 detectives say someone hacked into Equity Bank’s payment and fraud management system, and changed security levels of three merchants who were registered with the lender for credit card payments.
In the Cybersource system, security levels for the three merchants are suspected to have been changed from three-dimensional, which involves multiple authentication processes before allowing payments, to two dimensional which has lower safeguards.
For the next three months, a number of transactions were allegedly run on fraudulent credit cards with payments done in favour of the three merchants.
Investigators say no goods or services had changed hands despite millions going to the three merchants, straight from the pot where Equity Bank stored funds for settlement of credit card transactions – the bank had been slowly but surely robbed.
By the time Equity Bank found out and reported the matter to the police, it had lost Sh322.1 million.
Correspondence between the Directorate of Criminal Investigations (DCI) and the Office of the Director of Public Prosecutions (ODPP) seen by Nation Africa has revealed how the loot was moved through multiple bank accounts, with an undisclosed portion of it ending up in the United Arab Emirates (UAE).
Investigators have recommended the prosecution of four suspects, whose names we have withheld for legal reasons.
The correspondence also gives insight into the difficulty in tracking down cybercrime suspects, as it took more than a year to investigate one of the numerous virtual robberies that have left lenders and security agencies chasing their tails while trying to recover stolen funds.
“Thus, the substance of the complaint is that between April, 2023 and July, 2023 three merchants namely (names withheld) each defrauded Equity Bank Kenya Ltd by changing their integration type in the CyberSource from 3D to 2D. This allowed the merchants to run scripts of fraudulent cards on the CyberSource platform which enabled them to obtain the sum of Sh322,154,851 directly from the bank’s settlement account,” the letter to the DPP reads.
The three merchants, would allegedly transfer money they received through the credit card fraud to an account at Middle East Bank operated by a company.
For some batches, one of the companies would wire funds to a local bank account operated by a Kenyan-Briton businessman.
The Kenyan-Briton moved the funds he received to a private company in Abu Dhabi.
The correspondence between the investigators and the prosecution does not indicate whether Kenyan authorities have engaged their UAE counterparts to aid in investigations or recover the stolen funds.
But in April, the DCI recommended to the DPP that the three merchants and their suspected Kenyan-Briton accomplice be prosecuted.
DCI officers recommended that they be charged with stealing by agents contrary to section 283(1) of the penal code, money laundering contrary to section 3(a)(i)(iii) as read with section 16(i)(a)(b) of the Proceeds of Crime and Anti-Money Laundering Act, and computer fraud contrary to section 26(1)(c) as read with section 26(2)(b) of the Computer Misuse and Cybercrimes Act.
Even as the DCI hopes that the four suspects will be charged, its officers are still looking into other merchants believed to be part of the suspected credit card syndicate.
A laptop recovered from one of the suspects the DCI wants prosecuted was confiscated and detectives are confident that forensic analysis of the device will offer more leads.
Particularly, the forensic analysis is expected to reveal whether an Equity Bank staff member aided the theft.
Interestingly, Equity Bank suffered another round of losses from credit card fraud exactly one year later when fraudsters targeted Sh179.6 million.
Equity Bank was able to freeze Sh60 million. The Sh118.9 million balance had already been shipped out of the lender.
The theft proceeds had been stashed in 551 bank accounts, which then started shipping it out.
The suspected fraudsters transferred Sh63 million to numerous M-Pesa accounts, Sh39 million was moved to accounts in other banks.
In July, the bank was also robbed of Sh1.5 billion in a separate incident. The main suspect in that incident, David Machiri, has been missing since being picked up by DCI officers in August.
Equity Bank Group is going through a major crisis in the region. In Kenya, investigations are now reveling that the recent MasterCard fraud was an insider job. In Uganda, the bank is also in the middle of a $16 million insider loan scandal.
Equity Bank Tanzania the subsidiary of Equity Bank Kenya Limited is at the center of accusations of tampering with the growth of the country’s economy, a matter that is stemming from what they term as exploitative practices.
This points to a serious problem that debts the reputation of one of the biggest regional lenders.
The bank has come under harsh criticism from businessmen who’re now accusing the lender of violating their loan terms.
Equity Bank has recently lost multiple cases to Tanzanian firms in which about USD58million (Ksh7.8 billion) was lost in controversial loans that have been termed fraudulent.
The mega scandal has caused panic within the bank and seen a massive exodus and firing of executives from the lender according to sources speaking to Kenya Insights.
According to sources, among those dismissed unceremoniously include; The Director of Public Services, Director of Payments, Group Director of Finance, Group Director of Commercial, Director of Administration, Director of SME, Director of Credit, Managing Director, General Manager Administration and Executive Director.
Claims by the bank blaming the local businessmen for playing them dirty is being dismissed from many fronts, “the noise of Equity Bank being robbed is pure ignorance because these are the perpetrators and they are the ones responsible for causing their bank these problems!” Kigogo, a Tanzanian newspaper reported.
The current storm comes at a time when Equity Bank Tanzania Limited and Equity Bank Kenya Limited are challenging a High Court judgement made last year favoring State Oil Company.
Deceiving loans
In summary, Equity Bank lost a lot of money in Tanzania because they allegedly lied about financing a steel rods project. The bank was supposed to give money to Tanzanian firms, but instead another company gave them money. The court has ordered Equity Bank to pay damages to the firms they misled.
The original case was filed by State Oil against Equity Bank Tanzania following a dispute over the repayment of a $18.64 million loan owed by State Oil to Equity Bank Kenya, which was represented by Equity Bank Tanzania.
The company initiated the case after Equity Tanzania, which acted as the guarantor agent for Equity Bank Kenya in facilitating the loan, demanded repayment.
The case in question dates back to 2018, when State Oil took a $18.64 million loan from a foreign lender, Lamar Commodity Trading DMMC of Dubai, with Equity Bank Kenya’s guarantee.
To secure the loan, State Oil also pledged its assets to Equity Bank Kenya, under the supervision of Equity Tanzania.
However, State Oil either failed or neglected to repay the loan to Lamar, resulting in its guarantor, Equity Bank Kenya, having to settle it, thus becoming the creditor.
After the deadline for repaying the loan passed without payment, Equity Bank Tanzania demanded repayment from State Oil on behalf of Equity Bank Kenya as its agent entrusted with the guarantee. State Oil then sought refuge in the courts. In the case, the company requested the court order Equity Bank Tanzania to return the assets it had pledged as collateral for the guarantee from Equity Bank Kenya, arguing that it was not indebted to the banks.
During the trial, among the witnesses were representatives of Lamar, the lender, who testified that State Oil had failed to repay its loan and instead its guarantor, Equity Bank Kenya, had paid.
However, in its judgement issued by Justice Stephen Magoiga on October 1, 2021, the court agreed with State Oil’s claims that it had already repaid its debt in full, and thus the banks had no claims against it.
The judge ordered all assets pledged by State Oil to be returned to the company.
Finer details
The High Court in Dar es Salam accused Equity of deceiving regulators that it issued letters of credit to four Tanzania firms for receiving steel roads from Dubai’s Lamar Trading DMCC and edible and crude oil from Singapore’s Numora Trading PTE.
The Judge reckoned that Equity never issued letters of credit—a guarantee from a bank to settle defaulted suppliers’ dues—and instead acted as an agent in a deal that saw Numora and Lamar offer $35.16 million (Sh5.3 billion) in cash to Tanzanian firms despite not being recognised as financiers.
The court also declared the deal null and void in a decision that has seen the Kenyan lender lose its claim of Sh5.3 billion.
It ordered Equity Bank to pay Sh60.9 million in damages to the four firms, State Oil Tanzania, Nas Hauliers, Everest Freight and Tanga Petroleum for pursuit of the irregular loan.
In 2017, Equity Bank Kenya acted as a guarantor for State Oil Tanzania, which borrowed $18.64 million (Sh2.8 billion) from Dubai’s Lamar Trading DMCC.
In the paperwork, Equity Bank falsely stated that State Oil was purchasing steel rods worth Sh2.8 billion from Lamar, court papers show.
Equity Bank massaged the paperwork to avoid scrutiny from regulators, who would have flagged the deal because Lamar is registered as a trader, not a lender.
The bank emerged from the deal as one issuing letters of credit for the transaction where State Oil was purchasing steel rods worth $18.64 million (Sh2.8 billion) from Lamar on credit.
In reality, the Equity Bank was cited as an agent by the judge, who declared that the letters of credit were non-existent.
Everest Freight
The same script followed the Nas Hauliers, Everest Freight and Tanga Petroleum deal.
Equity Bank stated its role as issuance of letters of credit guaranteeing a $16.275 million (Sh2.4 billion) loan from Singapore’s Numora Trading PTE in 2019.
Just like Lamar, Numora is registered as a commodity dealer in food, edible and crude oil.
“Since the monies were not deposited in Tanzania by the lender, the regulator cannot allow repayment without first being brought to light about the underlying contract upon which the standby letter of credit (SLBC)/letter of credit (LC) is based as well as proof of fulfilment of the SBLC/LC of prior agreements,” Dar-es-Salaam Judge John Nangela ruled in an April judgement recently made public.
“All such concerns negatively impact on the defendants (Equity Bank Tanzania and Equity Bank Kenya), leave alone the fact that the respective SBLC/LC was not, as stated earlier, issued by Equity Bank Kenya,” the judge added.
The borrowers were all Equity Bank Tanzania clients. They had sought to borrow and offset other burdening loans.
But Tanzanian laws bar such huge amounts being lent to a single borrower, capping the lending to between 25 percent and five percent of core capital. In December, the Tanzanian subsidiary could lend a maximum of Sh1.12 billion to a single customer.
Equity Bank Tanzania referred the firms to its parent in Kenya counting on its outsized balance sheet.
Equity Bank Kenya channelled the firms to Nisk Capital, an East Africa focused investment bank and financial advisory firm Nairobi-based, which in turn led the companies to Lamar and Numora.
The side deal bound Equity to pay Lamar and Numora in the event the Tanzanian firms defaulted.
The loan was not listed with the Bank of Tanzania. Lamar and Numora wired funds to Equity Bank Kenya, which opened escrow accounts in Nairobi.
The Tanzanian firms defaulted, forcing Equity to pay Lamar and Numora in the hope of recovering the funds through auctioning security provided for the issuance of the letters of credit.
But in two judgments, Tanzania’s courts dashed Equity Bank’s hopes by ruling in favour of the borrowers, who separately sued the lender to stop the auction of their assets.
In both cases, the judges ruled that Equity Bank was just an agent, and had no right to demand loan repayment.
The judges argued that Lamar Commodity Trading DMCC and Numora Trading PTE should demand Sh5.3 billion as the lenders.
In April, Judge Nangela ordered Equity Bank to pay $300,000 (Sh45.7 million) to three firms – Nas Hauliers, Everest Freight and Tanga Petroleum – in damages for the pursuit of the debt.
Judge Stephen Magoiga had in October 2021 ordered that the lender pay State Oil Tanzania damages of $100,000 (Sh15.2 million) in 2021.
Judge Nangela in April said Equity risked landing in trouble if it submitted doctored documents to the Bank of Tanzania in pursuit of recovering funds lost in the loan deal Numora had with Nas Hauliers, Everest Freight and Tanga Petroleum.
Tanzanian firms
The court judgments may have sealed Equity Bank’s fate as the lender has been blocked from pursuing the Tanzanian firms and ordered to release cars and land it targeted for auction to recover Sh5.3 billion.
Stuck with the bills, Equity Bank Kenya paid $18.64 million (Sh2.8 billion) to Lamar on January 28, 2020, in line with the standby letter of credit.
For the Nas Hauliers transaction, Equity Bank Kenya released $16,275,000 (Sh2.48 billion) to Numora credit after the default.
The court papers do not specify when the amount was paid but show that payment was made to Numora’s account at Standard Chartered Bank Malaysia by Equity Bank through Citi Bank New York.
Lamar is one of the companies that bagged controversial multi-billion-shilling deals to supply the Kenya National Trading Corporation (KNTC) with farm inputs under President William Ruto’s subsidised fertiliser programme, which is aimed at lowering food production costs.
The firm has a Sh2.7 billion deal to supply the KNTC with 30,000 tonnes of NPK fertiliser.
State Oil Tanzania surrendered six title deeds for land in Dar-es-Salaam, Dodoma, Mwanza and Ruvuma. The firm also surrendered ownership documents for 30 Volvo trucks and 30 fuel tankers.
Nas Hauliers, Everest Freight and Tanga Petroleum have similar shareholding and directorship. They provided six title deeds for land in Shinyanga and Dar-es-Salaam as security. Both loans were to be offset within five years.
Interest on the loans was to be paid in advance, with the Tanzanian firms offsetting the principal in five equal instalments each year.
In State Oil Tanzania’s loan, the standby letters of credit issued indicated that the firm was purchasing 23,300 tonnes of hot steel in coils and cold rolled steel plates.
On December 10, 2018, Lamar disbursed $17.44 million (Sh2.65 billion) to Equity Bank Kenya to cater for State Oil Tanzania’s loan. Lamar had deducted $1.2 million (Sh1.8 billion) to cater for interest for the first year.
Equity Bank then opened an escrow account in Nairobi, with the lender and State Oil Tanzania as the joint owners.
State Oil Tanzania
In court, however, State Oil Tanzania claimed that Equity Bank Kenya was in full control of the escrow account. Equity Bank Kenya then paid off State Oil Tanzania’s loans.
State Oil Tanzania at the time owed Equity Bank Tanzania $10.183 million (Sh1.5 billion), ABC Bank $4.253 (Sh647 million), FNB $567,688 (Sh86.3 million) and TIB 332,769 (Sh50.6 million).
In the State Oil Tanzania deal, Equity Bank Kenya received $372,800 (Sh56.7 million) in commission. Nisk Capital received $750,000 (Sh114.1 million) in commission.
The $736,899 (Sh112.3 million) balance was paid into State Oil Tanzania’s account with Equity Bank Tanzania.
For Nas Hauliers and its sister firms, Lamar claimed to have surrendered all its rights under the deal to another company, Singapore-registered Numora Trading PTE.
On June 4, 2019, Numora Trading PTE disbursed $14,123,527 (Sh2.15 billion) to Equity Bank. The Singaporean firm had deducted $2.151 million (Sh327.9 million) to cater for interest for the first year.
Equity Bank Kenya opened an escrow account in Nairobi, with it and Nas Hauliers listed as the joint owners.
Nas Hauliers owed $8.87 million (Sh1.35 billion) to Equity Bank Tanzania, $1.49 million (Sh227 million) to Amana Bank and $450,000 (Sh68.4 million) to UBL Bank.
In this deal, Equity Bank Kenya enjoyed a commission of $390,600 (Sh59.5 million). Equity Bank Tanzania received $2 million (Sh304 million) for operational costs.
The $978,586 (Sh149.1 million) balance was paid into Nas Hauliers’ account with Equity Bank Tanzania.
After one year, the firms were set to start offsetting the principal amount. This meant that State Oil Tanzania should have paid $3.728 million (Sh568.2 million) in December 2019.
Nas Hauliers was due for a $3.255 million (Sh496.1 million) payment in June 2020.
Because the loans could not be registered with the Bank of Tanzania, there was no credit reference bureau in Tanzania indicating that the four firms had defaulted on any borrowings.
In court, State Oil Tanzania argued that Lamar breached the contract by sending money to Equity Bank Kenya.
Director Nilesh Suchak also argued that Equity Bank Kenya’s actions amounted to operating illegally in Tanzania and veiling the transaction by using Equity Bank Tanzania’s name and face.
In court, Equity Bank maintained that it issued letters of credit to help the Tanzanian firms secure the loans.
The letters of credit, the bank argued, were issued after the Tanzanian companies surrendered various assets as security.
Foul play
Businessmen in Tanzania are now blaming foreign banks such as Equity Group for frustrating economical growth in the country.
“The other day I read about the statistics of the number of billionaires in East African countries and I saw that Kenya is leading. I wondered why Tanzania does not make billionaires? Why is our economy not growing? I have come to discover that there is Economic Intelligence going on through these foreign banks against our businessmen in order to weaken them and bring them into bankruptcy.” A Tanzanian analyst who sought anonymity said.
He goes ahead to loud the Tanzanian judicial system in saving the investors from the rabbit hole they had been put.
“These businessmen have been able to get out of that trap only because they decided to stand in the primary case and used a lawyer who is honest and who cannot be manipulated, that is why they have won the case otherwise this Bank would have bankrupted them because that is their main goal. But also in the investigation conducted by the Central Bank in the flow of these cases, they have found out that there are many loans given by this bank without following the financial procedure, so they were acting against the financial law of the country.” He added.
He notes a consistency that he alleges is a mega scheme to derail the growth of Tanzanians, “This shows that there is a dirty game going on in these Banks to affect the economy of our Nation and this Game involves some of our fellow Tanzanians who are not patriotic in undermining the economy of Businessmen and the Nation in General.” He said linking the recent Ugandan $16million load fraud that we highlighted in a previous article.
In the case, some Equity Bank Uganda Ltd employees are under investigation for alleged fraud involving stock loan and agent float financing.
Cyber criminals have targeted Equity Bank and made away with Sh179 million in what is being described as the biggest heist in card fraud this year.
In a leaked letter by the bank’s insider seen by Kenya Insights, Sh179,677,736 was stolen from the bank’s MasterCard GL and transferred to 551 accounts.
How Equity Bank got hacked
In the letter signed by Gerald Munyiri, the Equity’s General Manager Security & Investigations alerting the Banking Fraud Investigations Department at the DCI seeking for help in investigating and prosecuting perpetrators, it details how the hackers moved the money from MasterCard and quickly spread it to the 551 accounts within the bank and through M-Pesa.
“Early 15/04/2024 the bank’s risk department discovered an upsurge of transactions emanating from the banks Incoming Master Card GL. Preliminary investigations revealed that between 09/04/2024 and 15/04/2024, Ksh. 179,677,736/- was paid out from the GL fraudulently to the 551 Equity Bank accounts.” Part of the letter reads.
It continues , “additionally, Ksh. 63,023,983/- was sent to Safaricom Mpesa and Ksh. 39,047,344/- to eleven commercial banks.”
From the letter, Equity has managed to block a fraction of looted cash by locking the accounts in question and in talks with Safaricom to trail help in retrieving rest of the cash that was offloaded through M-Pesa.
Equity bank’s history with hackers
The bank is not new to claims of fraud and customers losing money in unclear circumstances, in fact, a look into their social media accounts would paint the vivid picture from the complaints.
The bank’s cybersecurity systems have been faulted by experts for being vulnerable making it an easy target for hackers.
A recent case where a cybercrime gang including Kenyans were jailed in Rwanda for targeting the bank in a hacker attack, could explain how this is done.
In 2022, eight Kenyans who had hacked the bank were handed eight-year jail terms and fined Sh5.6 million.
The eight were part of a 12-man gang arrested in 2019 by the Rwandan Investigation Bureau (RIB) that included three Rwandese nationals and a Ugandan.
The gang arrested in Rwanda had successfully hacked in Kenya and Uganda and were on police watch when they were finally caught in Rwanda.
The gang were arrested while hacking into Equity Bank accounts and funnelling the cash to Rwandans to draw out funds through Eazzy banking and ATMs.
The Kenyans include Dedan Muchoki Muriuki, Samuel Wachira Nyuguto, Kinyua Erickson Macharia, Godfrey Gachiri Githinji, Eric Dickson Njagi Mutegi, Reuben Kirogothi Mwangi, Damaris Njeri Kamau and Steve Maina Wambugu.
The hackers operating with insiders to identify targets with huge deposits tried to intercept the lender’s 14 branch network and wrote computer scripts to move money to several local accounts of accomplices.
They attempted hacking using the Eazzy banking platform, which the bank and security agents intercepted since they had been alerted on their operations, including the recruitment of Rwandans they would use to take cash out of the accounts.
Cybercriminals are using ‘BIN’ attacks in card fraud
While it’s still not clear how the Equity’s heist was executed, Bank Identification Number (BIN) attack appears to be clear guess.
Cybersecurity networks may be getting stronger, but cyber-criminals always seem to outpace that progress by coming up with more sophisticated tactics. The latest troubling trend to emerge in the space is the use of “BIN attacks” by cyber-criminals to target small businesses. This involves manipulating the BIN of credit cards, allowing fraudsters to test stolen card details through trial and error on unsuspecting e-commerce sites. This sophisticated cybercrime tactic not only poses financial threats to businesses but also leaves consumers questioning the security of their online transactions.
Behind the scenes of the ‘BIN’ attacks
Kenyan banks has been losing staggering amounts of money over the past years. What initially seemed like a clerical error has turned out to be a sophisticated cybercrime technique that put both businesses and consumers on edge.
Cyber-criminals start by obtaining the first six digits of a credit card, known as the Bank Identification Number (BIN). With this information, they employ trial-and-error methods to decipher valid combinations of card numbers, expiration dates, and security codes. The stolen card details are then tested through small transactions that are hardly noticed, to determine their validity. Once confirmed, fraudsters either sell the compromised card numbers or use them for more larger fraudulent transactions.
Many find themselves victims of unauthorized transactions. Despite never using their cards online, some victims get shocked to discover transactions on their accounts, leaving them with doubts about the safety of their financial information, even though the bank reimbursed them.
Photo/ pixabay
Contrary to popular belief, credit card numbers are not as random or infinite as consumers might think. With 16 digits on a card, removing the six-digit BIN leaves just 10 digits that adhere to a specific pattern. The relatively limited possibilities make it feasible for cyber-criminals to use automated systems to rapidly guess valid combinations, posing a significant challenge for traditional security measures.
Role of financial institutions and businesses
While the affected businesses call for tighter safety protocols, the responsibility is not solely on the banks. Financial institutions, often the victims themselves, issue cards but are not always the entities processing the transactions. The attacks highlight the need for a multi-layered defense, with businesses employing robust fraud protection tools and payment processors like Stripe and Square that prioritize online store security. This is needed since the aftermath of a BIN attack can be financially crippling for businesses.
According to the Central Bank, bank card fraud occurs in several ways, including phishing, which is when fraudsters send an email or text message that appears to come from one’s bank or a reputable financial institution.
“They use various tactics to get you to share confidential information such as your PIN, account number, login details and passwords,” the CBK notes on its website.
“For instance, they may state that your account has an issue and that you need to update or verify the information through a website link or mobile phone device. Thereafter, they use the details to steal money from your account.”
Fraud may also occur when card skimmers illegally copy information from the magnetic strip of a credit or ATM card. They then create copies of the card and make charges to one’s account.
In other instances, thieves use misplaced or stolen bank cards to make unauthorised purchases before the owners report them missing, the CBK adds.
According to data from the BFID, Kenyan banks lost Sh1. 5 billion (approximately US $17.64 million) over the last year, with only a third being recovered by investigators.
Last week, the National Assembly assented to the Computer Misuse and Cybercrime (Critical Information Infrastructure and Cybercrime Management) Regulations, 2024, giving security agencies more power to regulate cyberspace activities to curb fraud.
The regulations enhance protection measures for critical economic sectors such as telecoms, banking, transport and energy.
They stipulate how to deal with issues including scams, identity theft, hacking and internet fraud, and also address the cybercrime capacity and capability building for the public, businesses, government institutions, and private entities, to enhance their cybersecurity preparedness and prioritise cybersecurity.
Kenya’s highly digitised economy linked with mobile money through telcos and banks has made the country a target for cybercrime and online fraud.
Adapting to evolving threats
As cyberattacks become more sophisticated, businesses must adapt to protect themselves and their customers. Popular platforms like Stripe and Square can serve as valuable allies in the ongoing battle against cyber threats, providing an additional layer of defense for businesses and their customers.
In an era where convenience and speed define online transactions, the dark underbelly of cybercrime poses a persistent challenge. BIN attacks, with their focus on small businesses, remind us of the fragility of digital financial ecosystems. As businesses and financial institutions work to bolster their defenses, consumers are encouraged to remain vigilant and report any suspicious transactions promptly. The delicate balance between ease of use and security continues to be a tightrope walk in the digital age, with each innovation met by an equally cunning cyber threat.
A Nigerian firm that was at the centre of a multi-billion money laundering probe last year used fake documents to wire millions of dollars from Kenyan banks to American bank Citibank.
RemX Limited, which was investigated by the Assets Recovery Agency (ARA) on fears of card fraud and money laundering and later cleared, duped the bank’s compliance teams and Kenyan regulators using fake agreements, disclosures in a new case filed by Hong Kong-based firm at the High Court has revealed.
Whatsapp group messages among RemX and Lae Technologies Hong Kong Limited representatives filed in court have exposed how the payments service company forged documents to move billions of cash without raising suspicion for four years.
Lae Technologies wants the High Court to freeze RemX’s accounts and its affiliates pending the determination of a suit seeking payment of $88 million as the balance for software sold to the Nigerians.
Documents filed in court reveal a series of text messages from Nehikhare Eghosasere—a RemX director– sharing details of how they dodged regulatory dragnet to move huge sums of money in and out of the country through Kenyan banks and Citibank.
“To prevent probing questions from Citibank’s compliance team, we will need to ensure that the paper work is super super tight. Typically, how we have circumvented this in the past is to ensure that the beneficiary name in the SWIFT instruction is the same as the sender’s name. That’s why we have RemX set up in multiple countries so that it’s seen as “Same Company Funds Transfer”,” Mr Eghosasere said in a Whatsapp message dated October 9, 2020.
Nigerian company registry shows RemX is registered in the names of Nehikhare Eghosasere and Demuren Olufemi Olukunmi, with its offices on 16C Ruxton Road, Ikoyi, an island in Lagos, the commercial capital of Nigeria.
The Kenyan entity under the same name is owned by Mr Eghosasere with 200 shares and Demuren Olufemi Olubukunmi who holds 800 shares, according to information available in the Business Registration Service online portal.
The intended purpose of the transactions is not clear in the series of exchanges but ARA last year cited the company for moving illicit money that could have been proceeds of crime.
“… just want to put measures in place to ensure it’s sustainable and doesn’t become problematic down the line when Citibank starts asking questions. They would usually come to ask questions in 1-2 years after the transaction lol. They are such an annoying bank. If we have some sort of dummy agreement with the trust. Just to present to Citibank (whenever they ask questions), that will be great,” Mr Eghosasere told his would-be partners.
The two together with Olubunmi Akinbanjo Akinyemiju have cross-continental operations and have multiple companies registered in Kenya, the US, UAE and Nigeria.
The Lagos-based payments firm and other companies registered under the same names received over Sh84 billion and wired out Sh78 billion between 2019 and last year through Equity Bank and UBA, ARA investigations showed.
Their other companies that were part of last year’s probe and have been listed as interested parties in the latest court fight include Pumicells Ltd, OIT Africa Ltd, Avalon Offshore Logistics Ltd, RemX Capital Ltd and Multigate Limited.
Equity Bank and UBA Bank could find themselves in trouble following the revelations that the firm used fake agreements to move billions, failing the Know Your Customer (KYC) requirements meant to curb the flow of illicit cash and money laundering.
Kenyan banks are expected to alert the Financial Reporting Centre (FRC) of suspicious transactions under anti-money laundering laws, including reporting large transactions and undertaking due diligence on customers.
ARA has since withdrawn the case against RemX which saw the High Court lift orders to unfreeze Sh5.6 billion belonging to the firm.
The transactions into Kenya were done through multiple dollar accounts held at Equity and UBA. However, the funds sent to the US were wired from Equity through Citibank as the correspondent bank.
Mr Eghosasere in the exchanges said local banks did not pose any risk to their operations but Citibank had strict anti-money laundering (AML) rules which could land them in problems.
“Equity Bank is the sending bank, but Citibank is the correspondent bank. And they (Citibank always give the sending (and receiving banks) “headache”,” Mr Eghosasere told the group.
The documents have also revealed that before flying into regulatory turbulence last year, the Nigerians were keen on making Kenya their payment settlement hub which could partly explain the outsized amounts of foreign currencies wired during the period.
“RemX typically moves money globally around the world. We are currently looking to set up our settlement hub in Kenya, but they need us to get a remittance license anywhere else in the world… Makes sense? So, we just need a license in the easiest jurisdiction,” Mr Eghosasere.
The CBK and the Financial Reporting Centre —the agency that tracks illicit money—have maintained in the past that the transactions by the firms were illegal and the firms are not authorised to process payments in Kenya.
UBA and Equity Banks are currently embroiled in a legal tussle with Assets Recovery Agency (ARA) over Sh5.6B frozen in the two banks suspected to being proceeds of crime and a dark world money laundering scheme.
According to reports, the money is alleged to be linked to Deputy President William Ruto and in play are two Kenyans and two Nigerian nationals named in several money laundering schemes before.
The billions in the accounts in Equity Bank and UBA Bank were frozen by the High Court after the Assets Recovery Agency (ARA) applied to block the transfer or withdrawal, pending the filing of a petition to have the money forfeited to the government.
The money was wired into the country from multiple countries, including Nigeria, to three companies identified as OIT Africa Ltd, Avalon Offshore Logistics Ltd and RemiX Capital Ltd.
The ARA says the four directors of the firms—the two Nigerians and two Kenyans—shrugged off repeated summons to explain the source of the billions.
The State agency believes the two Kenyans, including one who graduated from a local public university in 2018, are fronts of the Nigerians who are suspected to have the backing of Ruto.
Equity Bank and UBA Bank (account number 5501030010886) could also find themselves in trouble following revelations that the suspicious billions started flowing into the accounts in 2020.
OIT Africa had Sh4.8 billion in two Equity accounts and one in UBA. Avalon Offshore Logistics had Sh43.5 million in two Equity accounts, while Remix Capital had Sh765 million in one UBA account.
A search at the registrar of companies revealed that Avalon Offshore is owned by Nigerians Jeffrey Nnaoma Michaels and Uduma Okoro Christopher Kalu. The company was registered in November 2020 and has its address in Westlands.
Both Kalu and Nnaoma are listed as directors of the company, with Kalu holding 1,600 ordinary shares while the rest are owned by his partner.
An online search reveals that Nnaoma is listed as a director of several companies registered in Nigeria, including a forex bureau.
The post office number of the two Nigerians was linked to several firms that operate from the 13th floor of the prestigious Delta Corner office block in Westlands.
OIT Africa is owned by Vionnah Akoth Odongo and Kenneth Odongo Raminya, with 500 shares each and the company was registered on July 14, 2017.
OIT Africa informed the registrar of companies that it operates from 680 Plaza, the building that hosts the 680 Hotel.
The mobile number is registered under the name of a different person, who denied knowledge of OIT Africa and Ms Odongo and Mr Raminya.
There is no record of any company by the name Remix Capital Limited in the Business Registration Service online portal, an indication that the firm could be non-existent.
Court documents state that transactions involving the Sh5.6 billion were conducted through suspicious transfers and withdrawals meant to hide the source.
The ARA says that it suspects that the money could be proceeds of crime because the transactions were conducted suspiciously through six bank accounts in Equity and UBA.
The agency says there is imminent danger that the funds might be transferred or withdrawn unless the court issues an order preserving the money.
Documents filed by the companies earlier seeking to stop the investigations state that they are an online remittance platform, which allows individuals from abroad to send money to their loved ones in Nigeria and Kenya.
The case was later withdrawn after they failed to block the probe.
The agency moved to court in March, seeking to investigate the three companies suspecting that they were involved in money laundering.
Justice Esther Maina barred the companies and their agents from withdrawing or transferring the money, pending the hearing of a petition by the ARA.
UBA Chief Executive Officer (CEO) is Chike Isiuwe, a Nigerian. The bank board chairman is Alphan Njeru.
United Bank of Africa Kenya CEO Chike Isiuwe at the lender’s offices on February 1, 2022. (UBA) Kenya CEOChike Isiuwe at the lender’s offices on February 1, 2022.
Apart from Isiuwe, top bank managers in hot soup are Mary Mulili, Evah Wahogo (Chief Operating Officer), John Oganda (Head of compliance), Debra Ogada(Country Head legal and company secretary) and Geoffrey Kimani (Head risk management).
The investigations by chain implicates the entire management and detectives will comb through the files of many. The international money laundering syndicate, it has emerged that the bank deposits started in 2020.
In November 2020, Deputy President William Ruto met with a controversial man on the run alongside former Nigerian vice-president Atiku Abubakar during his highly guarded trip to the emirate of Dubai.
The DP met Abubakar alongside one Timi Frank.
Mr Frank, a high-flying but controversial political activist, is wanted in Nigeria on various accusations of character assassination.
Nigeria’s Federal Inland Revenue Service in 2019 announced that it was suing him over a series of fraud allegations he made against the agency, while the current Nigerian vice-president Yemi Osinbajo last year announced that he was suing Mr Frank for defaming him by making corruption allegations against him.
Before his travel to Dubai, Mr Frank had visited Nairobi where he met with DP Ruto and organized the meeting with Abubakar. It is this meeting that intelligence sources suspect a money laundering scheme was crafted.
Mr Frank is a close associate of Mr Atiku, a fabulously wealthy former Nigerian vice-president who has been described by his former boss, President Olusegun Obasanjo, as “not trustworthy” and other not very kind terms.
Mr Abubakar is a wealthy Nigerian with vast investments in oil, but President Obasanjo, in his 2014 biography My Watch, described him in unsavoury terms.
“What I did not know, which came out glaringly later, was his parental background, which was somewhat shadowy, his propensity to corruption, his tendency to disloyalty, his inability to say and stick to the truth all the time, a propensity for poor judgment, his belief and reliance on marabouts (religious teachers), his lack of transparency, his trust in money to buy his way out on all issues, and his readiness to sacrifice morality, integrity, propriety, truth and national interest for self and selfish interest.”
Mr Atiku publicly fell out with President Obasanjo and even decamped from then ruling People’s Democratic Party to the Action Congress of Nigeria, but lost the 2007 presidential election, which was won by the now-deceased Umaru Yar’Adua.
Abubakar had promised to fund the ‘Hustler Nation’ campaigns.
Both Dr Ruto and Mr Atiku have political aspirations. Dr Ruto will be taking a stab at the presidency in 2022, while Mr Abubakar is the candidate for the People’s Democratic Party (PDP) in the Nigerian presidential race a year later, in 2023.
In February, the High Court ordered the freezing of Sh227 million that was recovered from a man associated with Deputy President William Ruto’s United Democratic Alliance (UDA).
Monies in US dollars were intercepted from one Andrew Kipkemboi at the Jomo Kenyatta International Airport cargo shipping point as he arrived in the country from Bujumbura, Burundi, last Thursday.
The DP’s office distanced itself from the man who is said to be eyeing the Chesumei parliamentary seat in Nandi County on a UDA ticket. Sources however claim that the money was linked to the DP.
UDA party office also denied knowledge of the man, insisting the party is yet to go through the list of all individuals who have declared interest for parliamentary seats on its ticket.
According to a local newspaper, investigations further want to unravel the period the UBA bank has been engaged in clearing billions of shillings in the height of 2022 elections. It is claimed that the bank has been used by powerful politicians to launder billions of shillings.
The paper further claims that a senior sitting on CBK board with connections to a senior state official who has since fallen out with the high powers, was commanded to cushion the bank from any troubles given his position at CBK.
Ms Viola Achola who’s in her 20s and the listed as the director of Oit Africa Limited, the firm under probe, she’s claimed to be close to the wife of mentioned CBK board member.
Kenya Insights reached out to the bank on the above mentioned claims but they didn’t comment citing court orders.
Equity Bank
In August last year, Equity Bank found itself in similar circumstances that UBA is in today following claims that they were part of an alleged Sh15B money laundering scheme.
The state’s intelligence had intercepted and arrested a Turkish businessman Harun Aydin from flying out of the country to Uganda where he was to establish a vaccine making plant. According to intelligence at the time, Aydin was supposedly being used by the Deputy President William Ruto to cycle through a money laundering scheme.
The DP didn’t distance himself from his relationship with the flagged businessman.
Speaking during an interview with a local radio station yesterday, Ruto claimed he had helped Aydin to acquire a Sh15 billion loan from Equity Bank to set up a vaccine processing factory in Uganda, which he and three other businessmen alongside his close allies were scheduled to commission on Monday.
“I helped him on one phone call. He said the benefits Ugandans will get are the same that Kenyans will get.”
Many questioned as to how simple it is for Equity to dish out Sh15B as a loan merely from a phone call and to foreigners whose past are questionable.
Claim by Ruto that he secured the loan of such magnitude by simply placing a call has elicited reactions from Kenyans who’ve been victims of banks collapsing in insider, fraudulent loans.
Aydin was deported to Turkey following negotiations between the two states. The controversial businessman had been linked to terror activities before.
Nigeria
A Nigerian court in November last year, had charged regulatory bodies to withdraw the licences of the banks including UBA fir aiding aiding fraud which benefitted from the proceeds of illegal transactions.
Justice Okon Abang of the Federal High Court, Abuja berated The United Bank for Africa, UBA, and Fidelity Bank Plc for aiding fraud, while handing down judgement in a case of N2billion fraud involving a former chairperson of the defunct Pension Reform Task Team, PRTT, Abdulrasheed Maina noted that UBA and Fidelity Bank Plc which were used by Maina as “conduit” to defraud pensioners ought to have been charged alongside Maina. He stated that, “UBA and Fidelity Bank provided the channels with which the convict Mr Maina used in defrauding the federal government.”
The Judge said the banks abdicated their responsibilities by failing to carry out due diligence to establish the true identities of persons in whose names Mr Maina opened and operated the fictitious bank accounts.
In the instance UBA Kenya, did they conduct a due diligence on the flagged account/client? It must be noted that like an ocean, there’s always a ripple effect.
According to an American investigative body, The Sentry, weak financial institutions has made it possible for Kenya to become an epicenter of money laundering. Banks, real estate firms have been singled out. KCB has been on the receiving end for allegedly aiding the money laundering from the bloodshed South Sudan.
Locally, numerous banks have been found guilty of engaging in the illicit activity. However, the Vice has never stopped simply because the banks are treated to a slow motion slap on then wrist with paltry fines that can’t shake a leaf. If CBK grew bigger balls and slapped heavy fines, hold individual rogue managers responsible sending them to jail, and ultimately denying such fraud banks licenses, maybe they’d listen but until then, more money laundering headlines will keep hitting your headlines.
Money laundering, according to authorities, seeks to hide the source of money believed to have been obtained illegally, by passing it through channels including commercial transactions and other forms of investment.
According to the Financial Reporting Centre, such schemes seek to hide and legalise the funds without catching the attention of authorities and also making sure all connections of the funds to criminal activities is removed.
Finally, the “cleansed” money returns to the owner in an indirect way, and is used for legitimate purposes.
According to the United Nations Office on Drugs and Crime (UNODC) about Sh200 trillion is laundered globally every year.
Banks and agencies tasked with fighting the flow of illicit cash must step up their efforts to protect the country from criminal elements.
Equity Bank has been given a go ahead to sell houses belonging to real estate firm Suraya Property Group to recover its loans. This follows a ruling by the Court of Appeal on the prolonged battle that has seen several parties trying to take over the mansions in Kiambu.
The bench judge agreed with Equity Bank as a reputable lender and the real estate firm can still recover their money, in case the appeal, which is yet to be heard succeeds.
Justices Roselyn Nambuye, Hannah Okwengu, and Imaana Laibuta said the lender can auction the mansions subject to the issuance of fresh notices, as it was directed by the High Court in 2020.
The houses in dispute were constructed by China Wu-Yi company and financed by Equity Bank at a tune of more than Sh1 billion.
But the real state firm has been xperiencing financial woes after Muga Developers, a joint venture which is partly by Suraya was placed under receivership in 2020 by Equity Bank with Mr Muniu Thoithi and Mr George Weru being appointed as the administrators.
“The applicant having offered the suit property as security, it has become a commercial entity that can be compensated in monetary value,” the ruling reads.
The Fourways Junction Estate [p/courtesy]The court also noted that Muga Developers compeletly failed to demonstrate any efforts to pay back the loan. Equity has also failed in all its attempts to recover the millions it lent the developer to finance the housing scheme.
Suraya Property is owned by Peter Muraya and his wife Susan with whom he formed Muga Developers with the family of the late Samuel Gatabaki in 2007 to develop fourways junction estate. Gatabakis provided the land while Suraya was to source for funds to finance the development.
The luxarious estate which boasts of a mix of apartments, office blocks, a shopping mall, a fully-fledged country club and a three-star hotel is strategically located closer to the leafy Runda Estate.
China Wu-Yi which constructed the estate is also fighting to get some 10 houses as part of the payment for their services.
But Suraya Property has denied the claims stating that even if there was a deal to that effect, the property is charged to Equity Bank which granted the Sh1.76 billion loan to finance the project.
It’s feeling darker for the Belgian National Marc Freddy H De Mesel a supposed cryptocurrency guru who for the past months has been on the spotlight for alleged money laundering. He’s now been profiled By Kenyan security agencies as a money launderer.
In reported instances, De Mesel has relentlessly been trying bring his funds to Kenya through different women whom he say to be his lovers.
In yet another attempt, this time a man, has been thwarted.
In a case filed under certificate of urgency Assets recovery Agency (ARA) wants the USD 390,038.72 equivalent to Sh. 44,425,410.21 belonging to businessman Timothy Waigwa Maina held at Stanbic Bank, frozen pending the filing of a petition of forfeiture.
“There are reasonable grounds and evidence demonstrating that the funds held by Waigwa in the specified bank account are direct or indirect benefits, profits or proceeds of crime obtained from a complex money laundering scheme and are liable to be forfeited to the State under the Proceeds of Crime and Anti-Money Laundering Act,” added the agency.
According to court documents, Waigwa is suspected to be part of a syndicate involved in a complex money laundering scheme involving a Belgian National Marc Freddy H De Mesel.
He first received Euros 370,990 in one transaction on April 6, 2021 in his closed bank account at Standard Chartered Bank account drawn from various jurisdictions including Belgium on the pretense that the fund is a “gifts made in favour of the Waigwa”.
ARA argue that there is imminent danger Waigwa might dispose, transfer and dissipate the money unless the court issues preservation orders.
“It is in the interest of justice that preservation orders do issue prohibiting Waigwa or his agents or representatives from dealing in any manner with the aforementioned assets,” said ARA.
The Agency received information into a suspected case of money laundering schemes, and proceeds of crime involving multiple money transactions from foreign jurisdiction whose source could not legitimately be established.
The agency argues that preliminary investigations have established that Waigwa executed a complex scheme of money laundering designed to conceal, disguise the nature, source, disposition and movement of the illicit funds, suspected to constitute proceeds of crime and which are the subject matter of the application.
‘Girlfriend’
Felesta Nyamathira Njoroge, a college student used by De Mesel as his ‘girlfriend’ to wire hundreds of millions, is at risk of losing Sh109 million after Asset Recovery Agency filed a formal application to have her forfeit the money for being proceeds of crime.
According to the agency, she is part of an international ring of fraudsters engaged in money laundering.
“We have discovered that she is part of a syndicate involving complex money laundering schemes with individuals from various countries including Belgium from where she received the money on the pretext that it was a gift from her boyfriend,” said ARA through lawyer Stephen Githinji.
The agency wants Njoroge’s USD914,967 (Sh104,205,591) held at Co-operative Bank and Sh5 million held at Stanbic Bank to be forfeited to the State over allegations that she was being used by her foreign partners as a conduit for the illicit funds.
ARA had in November last year obtained an order freezing Njoroge’s accounts for 90 days to complete investigations into the allegations of money laundering.
Githinji told the court that after completing investigations, they have established that the 21-year-old student at Nairobi Technical Training Institute executed a complex scheme of money laundering designed to conceal and disguise the nature and sources of her funds.
“There are reasonable grounds and evidence demonstrating that the funds are direct and indirect benefits of proceeds of crime obtained from an international money laundering scheme and are liable for forfeiture to the government,” said Githinji.
The agency’s investigator Fredrick Musyoki said they discovered that Njoroge opened the dollar account at Co-operative Bank on August 2, 2021 with nil balance but within four days, the account had been credited with USD914,967 (Sh104,205,591) in four transactions.
“Our investigations established that she opened the accounts for the sole purpose of receiving the said funds which she declared the source to be from her boyfriend for her to invest in land projects and traveling,” said Musyoki.
The investigator stated that when they summoned Njoroge for questioning over her source of funds, she escaped to Tanzania by crossing the Namanga border as a pedestrian on October 2, 2021.
Musyoki added that De Mesel, who was in the country at the time, also escaped using the same route to Tanzania. According to the investigator, De Mesel transferred a total of Sh650 million to five different individuals between February 2020 and August 2021 without disclosing the source of the funds.
Another ‘girlfriend’
In another familiar incident, De Mesel sent Tebby Wambuku Kago, a friend of Felista Njoroge Sh102.8m ($909,900) in what is loosely modeled pattern of fraud that any intelligence agency can knit, anti-corruption court ordered that the money held up at Kago’s account be frozen last year in December.
Justice Esther Maina was told that Kago received the Sh108 on August 10, 2021, and an additional Sh37m in early November 2021.
However, when ARA accessed Kago’s account, it was discovered that out of the total Sh139.8m, her Equity account had only Sh102.8m.
Records indicate that the money was wired into Kago’s account by Felista Njoroge’s Belgian boyfriend, Marc De Mesel.
Unlike Felista, who was introduced in court as a 21-year-old student of Nairobi Technical Training Institute (NTTI), Kago’s age or occupation wasn’t given.
The only hint at her occupation was “self-employed businesswoman” as per court documents.
This is a story of an Equity Bank agent who was doing well for the bank at one point making huge profits for the firm. All were merry and he was the darling of the company, the poster boy whose success story ran on banking halls until one day he failed to meet his daily targets and the bank turned its back on him.
The man went from hero to zero, his successful business which inspired many in the region, went under. His beautiful family was completely shuttered, from running a business where he could make about Sh200K daily, the withered businessman ran away from home where those he owed were on his tail, he sold family land abs everything to pay off Equity who didn’t back off even after the tits ran dry to vending water for survival.
The sad story is narrated by a friend and below is the full story.
“I just listened to heart shredding story of an equity bank agent (personal friend) completely decapitated (financially) by the bank in most cruel extortionist arrangement never discussed in media.” He posted.
He continued, ‘The story, as promised. A THREAD My friend had a very successful retail business in Meru. Equity bank recruited him as one of their agents. In no time, he was best agent in Meru county & was invited for a seminar in Thika, to enhance the ‘partnership’. That’s where trouble began’.
A brief background
In 2000, he was baking cakes in Meru’s Kooje slums & distributed them in his bicycle. Through sheer hardwork, he transitioned into retail business & relocated. By 2005, he had established a successful retail business. That’s when he hired me as shop assistant.
I worked for him for 7 months as I waited to join university. He was a shrewd & diligent businessman. A committed Christian. During my stay, we made sales of ksh100k/day. Business was good. By 2009, he was making ksh200K/day in sales. Banks courted him for loans. He was reluctant.
When equity bank rolled out agency banking, he was a prime candidate. He was recruited. It was time to diversify & grow. In no time, he was the banks best agent in Meru county & was feted by the bank. He was a constant feature at bank halls, opening accounts & registering equitel.
It’s on this basis that he was selected for a seminar/ training on enhanced partnership. At the seminar, they’re offered a facility through which they could access short-term float to offer seamless services. They would borrow & repay same day at zero interest. No contract signed.
Back to business, he went full throttle. He borrowed between ksh200k -ksh500k daily & repaid the same day without a hitch. Everything was good. Equity bank called often, made videos of his business & ran it in its banking halls. His calls were on priority list.
Then came the rude shock day. He had borrowed ksh200k on that day. By end of day, he had ~ ksh170k in float. He made frantic calls to fellow agents to buy additional float. They’d none. Frustrated, he went to bed & decided to make settlement the following morning. Shock awaited!
In the morning, as usual, he logged & checked his account balance. He almost fainted. The bank had charged him ksh18K daily for the facility. For entire 3 months. That totalled >ksh1M in interest for money he had repaid same day & was sold as zero interest facility. He cried
He rushed to the bank manager & sought audience. The mood had changed. The manager said bank position on facility had changed. He had to pay. For a week, he walked into every office, made calls, he was no longer welcome. His videos were pulled down, threats followed.
He ran out of options & decided to start payments. Further shock awaited. Every time he deposited for a customer, bank would deduct ksh18K & CR customer with the rest. Customers would go mad. He would need additional float by using business cash for withdrawal. Business dipped.
Same thing with withdraw. If customer made ksh30k withdraw, bank would take ksh18K float leaving him with ksh12. Meanwhile customer would take ksh30K in cash. His business could no longer sustain this assault. Bank was relentless. He hid his vehicle, sold plot to repay.
The story, as promised. A THREAD My friend had a very successful retail business in Meru. Equity bank recruited him as one of their agents. In no time, he was best agent in Meru county & was invited for a seminar in Thika, to enhance the 'partnership'. That's where trouble began. https://t.co/knhmsIw3SX
Still, he had to borrow more money to top up customer deposits, pay equity & clear older debts. Meanwhile, interest kept growing & equity grew deaf. He was arrested on complaint of creditors X2. His rent went into arrears for a year & shop went empty. With nowhere to turn he self-exiled.
At last, a random friend helped clear equity balance. Pacified, the bank relented. They never picked their gadgets. Meanwhile the shop closed doors 7 months ago. Rent in arrears over one year & soaking in debts. The family can’t pay fees for children, can’t buy food
From exile in neighboring county, my friend hawks water & fruits to pay off debts. Nothing left for family. The wife struggles with kids & rely on well-wishers.
This is a street narrative picked & shared at impulse. In September 2020, while preparing for my wedding, I visited my friend & former employer to invite him. I noticed that his shop was conspicuously empty. I told my fiancée, I sensed something was terribly wrong.
The couple was very guarded on what they were going through but admitted they were facing financial challenges origination from their equity agency business. Maybe they didn’t want to mess our wedding plans with depressing details. We agreed to talk after wedding. We didn’t.
In May this year, he reached out. His daughter was joining college & he had nothing to get her admitted. I was very disturbing. But this wasn’t time for questions. We organised for a small fund mobilisation. She went to college.
Few days ago, the wife reached out. She was requesting for ksh1000 for her younger daughter’s shopping. I became very worried & requested for a meeting. That meeting was yesterday (14th Dec 2021). I rode my bike from Nanyuki, got in Meru by nightfall. We sat down until 12.15 am today (15th Dec 2021).
She tearfully narrated. I listened. My eyes wet. Voice lost. I asked few questions for clarity. My mind got numb & unresponsive. She saw me off at the gate at 12.35am & said goodnight. He story made me so physically vulnerable that I requested she wishes me safe journey instead.
Four Kilometre down the road, (to my parents place) a car suddenly came to life behind me. I grew apprehensive, took a diversion on a rough road. I knew my Yamaha DT was king here. Two corners & lights shore behind me. They were tailing me. Survival mode activated, I accelerated & lost them
I got home 15 minutes later. Switched the lights on. There was none. I eased into the chair. Tried making a draft but phone went off. It was 2.30am. I wondered:
1. Why would equity charge ksh18K for a facility repaid same day?
2. Why change position midway & apply retroactively?
3. Why not negotiate settlement instead of this financial atrocity.
4. Why risk customer deposits yet they knew their agent was insolvent?
5. Why take/ intercept customer money to settle their debts?
6. Where is Central Bank of Kenya (CBK) in all this arrangement?
This is not an isolated case, despite being a top bank in Kenya, Equity has been a hub of complaints with many gullible customers losing big chunks of money to schemes internally and beyond.
Kenyan Equity Bank is on the spot over corruption and bribery in South Sudan.
According to a report by United Nations’ Human Rights Council, a security printing firm De La Rue may have paid bribes to South Sudan officials through a Kenyan Equity Bank account, Lavington branch in Nairobi.
In the report, the council notes that the United Kingdom Serious Fraud Office announced the opening of an investigation regarding the De La Rue Group of companies and associated persons concerning their activity in South Sudan.
The investigation is believed to relate to a contract to design and print bank notes which was awarded to De La Rue PLC by the Government of South Sudan.
In 2016, the security printing firm transferred $1,400,384.08 USD (Sh155 million) to an Equity Bank account held in the name of a man called Emmanuel Makuach Ayuel, a consultant at Bank of South Sudan.
“The Commission was unable to obtain access to the actual account statements of Emmanuel Makuach Ayuel. Following the deposit of $253,166.87 USD ( Sh28 million), the next nine transactions were cash withdrawals to the total value of $70,000 USD. After the deposit of $202,528.31 USD (Sh22 million), of the next six transactions, three were cash withdrawals to the value of $70,090 USD (Sh7.7 million), one was a transfer to the value of $90,000 USD (Sh10 million), and two are cash deposits to the value of $50,000 USD (Sh5.5 million). All of the cash transactions were made in Lavington (Kenya), an affluent residential neighbourhood in the north-west of the Kenyan capital Nairobi,” stated the report.
De La Rue has done business with South Sudan since the country was established in 2011, designing and printing the country’s banknotes. The company produces notes for countries worldwide and is also the biggest commercial printer of passports.
In order to determine the precise nature and extent to which these payments were transacted, the Commission made a number of formal requests for information to De La Rue, South Sudanese Ministry of Finance and Economic Planning, the Bank of South Sudan, Equity Bank and to Emmanuel.
According to the commission, Equity Bank subsequently engaged with the Commission and stated that it was considering the request for information.
“If these payments represented legitimate business transactions, they would have been expected to have been made into a business account – rather than into a personal account. Moreover, as Emmanuel Makuach Ayuel is apparently a consultant with the Bank of South Sudan, it would be expected that the Bank of South Sudan itself make remuneration payments, rather than a third party,” stated the report.
Ugandan tycoon Matthias Magoola of Dei Pharmaceuticals Company is the businessman who Deputy President William Ruto negotiated a Sh15 billion loan from Equity Bank using the single phone call to the bank’s managers in Nairobi, as lightly approved by the CEO during interrogations by the parliamentary committee.
What passed many in the whole saga as the bank fought relentlessly to distance themselves from Turkish citizen, a suspected terrorist and declared money launderer Harun Aydin, is yet another well documented money launderer and fraud Ugandan businessman, Matthias Magoola, who had seen the chance given Ruto’s links and good relations with Uganda’s dictator Museveni to strike a money laundering deal using the COVID-19 vaccination plant, a project that was hurriedly launched without any feasibility study done. It wasn’t meant to materialize, it was meant purely to launder cash before the Kenyan intelligence agencies got ahead of the deal and put a stop to it. So…
Who is Matthias Magoola?
Matthias
At some point in time in 2020 -Ugandans bayed for blood of Ugandan man who was filmed convincing President Yoweri Kaguta Museveni along with Speaker Rebecca Kadaga that Uganda will in the next two weeks (after first corona virus case was reported in the country) begin producing a spray that will kill Coronavirus.
An excited Speaker would later update parliament with conviction that a Ugandan (Matthias Magoola) and more so from Busoga region was behind the invention of this super sanitizer.
Mathias Magoola in his charlatan character duped Museveni that this ‘miraculous’ disinfectant would kill any bacteria and other virus that emerge in future. He said he had teamed up with an alleged American professor Safraz Njaz who was also available in the clip trying to explain to the President Museveni.
But it was fishy how timely the two scientists planned to ‘invent’ the drug in the shortest time possible, how possible the disinfectant which had not been approved by the United States of America or anywhere, where the said professor came from could and only be launched in Uganda without recognition from CDC or even WHO and why would the US give the patent of a potential cure to the country with no single case when it had several thousand cases? Fundamental questions that were overlooked intentionally because a few people wanted to rip off the vulnerable citizens.
According to Magoola (who’s not a scientist) the sanitizer was to be co-produced by his company DEI GROUP which runs over 10 subsidiaries; Dei Industries International Limited, Dei Natural Products International Limited, Dei Minerals International Limited, Dei Tech LLC, USA, Dei Technologies International Limited, Dei Farms International Limited, Dei Pharmaceuticals, Dei Import and Export International Limited and Dei Investments International Limited.
According to Wikipedia, Sarfaraz Khan Niazi was born in Lucknow, India in 1949; he migrated to Karachi, Pakistan in 1962 and to the United States in 1970. He is an expert in biopharmaceutical manufacturing and has worked in academia and in industry, and as an entrepreneur. He has written books in the field of pharmaceutical sciences, biotechnology, consumer healthcare and poetry. Niazi earned a Bachelor of Science degree in pharmacy from the University of Karachi in 1969. In 1970 he moved to the United States. He obtained his Master of Science degree in pharmaceutical sciences in 1971 from Washington State University in Pullman, WA, and then moved to Illinois. In 1974, he obtained his doctorate in pharmaceutical sciences from the University Of Illinois At Chicago. Prof Niazi was in the country and met President Museveni.
At the immediate right hand side of President Museveni in white shirt.
During the meeting, attended by Kadaga, one of Niazi’s associates tells Museveni that “it is only this product in the world that kills the virus including Sars.” The President then asked in case Coronavirus is contained would the chemical be able to fight other viruses, to which the associate stammers, ‘Including bacteria.’
Seven years prior, local media published stories about the arrest of Minister Isaac Musumba and Ugandan MP Micheal Mawanda who were held in India on charges of fraud. But the arrest involved in a third party- little Matthias Magoola a businessman who turned to be a mastermind of the game.
The fraud involved shs 50 billion which he sought from Videocon an Indian firm.Magoola had allegedly wanted to sell ghost minerals to these Indians. Whereas Magoola had been placed under investigations by Indian police, he later switched the version of his story saying he had been fleeced of his mining licence by Videocon.
It all began in September 2006, according to documents seen by our source. Magoola, working as a proxy for some powerful officials in the ministry of Energy, got the largest wolfram mine in the country, located on 600 acres of land in the western district of Kisoro.
Currently China is the largest consumer of wolfram, which is used in the manufacture of engines for planes and bombs, among other uses. Under the trading name of Dei Minerals International, Magoola was given a licence barely 10 days after applying for it.He was also given prospecting rights to produce an acceptable feasibility study to develop the mine.
He, however, failed to avail the feasibility study, although records show that Magoola had previously worked in the department of Mines and Geological Survey and Mines.On August 21, 2008, Magoola sold 60 per cent majority shareholding to the Indian firm, Videocon Natural Resources PLC, whose chairman, Martin X. Fernandes, got him arrested in India.
After selling a snake oil in the name of ‘super sanitizer’ which really didn’t even take off, the charlatan moved to another dream project of a Covid-19 vaccine producing plant, with full knowledge that the country doesn’t have the capacity, but given his connection to Museveni and with free money from foreigners, liaised with Kenya’s DP Ruto to launch the vaccine project which was clothed as having been financed by Equity Bank in the tune of Sh15B, a farce and a nut on the face for a national bank.
………………….
Speaking during an interview with a local radio station, DP Ruto claimed he had helped Aydin which later turned out to had been Uganda Tycoon Mathias Magoola —acquire a Sh15 billion loan from Equity Bank to set up a vaccine processing factory in Uganda, which he (Ruto) and three other businessmen alongside his close allies were scheduled to commission. “I helped him on one phone call. He said the benefits Ugandans will get are the same that Kenyans will get.”
Link between Equity bank DP Ruto, Equity bank and Matthias Magoola
August 25th, Equity Bankofficials appeared before a parliamentary committee on to testify on allegations made by Deputy President William Ruto that it had advanced Sh15 billion loan to a Turkish national Aydin Harun who was deported to Istanbul in a dramatic turn of events that saw DP Ruto barred from traveling to Uganda by the authorities.
Through its chief executive officer James Mwangi, who was represented by the managing director Gerald Warui, the lender told members of Parliament that it has no customer by the name Harun Aydin.
The bank also denied advancing a Sh15 billion loan to Mr Aydin, who is linked to DP Ruto. Mr Warui also told MPs that Equity Bank has never received any phone calls from anyone to advance a loan to Mr Aydin.
The bank, however, admitted it has a banking relationship with Dei Group of Companies, associated with Aydin, which was setting up the said medical factory that Uganda’s President Yoweri Museveni described as world-class and which would produce enough medicine, including Covid-19 vaccines.
“The relationship between Equity bank and Dei Group in Uganda dates back to 2014. It’s an old relationship and the directors of Dei Group are Matthias Magoola and Kellen Kamurungi. Those are the shareholders according to the records of the bank,” Equity told the committee.
The relationship between Equity bank, Dei group owned by Mathias Magoola was similarly confirmed by Museveni .
Banks have been used before in channeling dirty money Siphoning dirty money and even with fines which Equity has been a casualty of CBK in several plunder of public funds, has never stopped the trade.
Equity Bank was fined Ksh 120 million for facilitating NYS and other scandals where money was packed in bags. Banking industry is the second largest criminal cartel in Kenya second only to the government.
Money laundering, according to authorities, seeks to hide the source of money believed to have been obtained illegally, by passing it through channels including commercial transactions and other forms of investment.
According to the Financial Reporting Centre, such schemes seek to hide and legalise the funds without catching the attention of authorities and also making sure all connections of the funds to criminal activities is removed.
Finally, the “cleansed” money returns to the owner in an indirect way, and is used for legitimate purposes.
Fake currency dispensation at Equity bank ATMs.
Not so long when recently around mid August 2021 – an alleged case of fake currency dispensing at one of Equity bank branch in Donholm was reported by a Netizen on Twitter sparking new concerns as to how many fake notes of the same have circulated within the area and if this a normality is only an isolated case or replicated elsewhere and whether Equity bank has been upto the task put in place security measures by the regulator of curbing fake currency circulation, it’s a big shame for a big bank as Equity to be painted with such allegations as it casts many doubts on its security system- Bankers Association to tame such cases.
This is equity bank Donholm branch, avoid, they have fake notes, they have fake notes, avoid, avoid, infact we are waiting to see if they will change those notes. pic.twitter.com/mBrN5fB6MR
Equity Bank’s mobile banking service named Eazzy Banking, has had the most complaints with the the customers say is prone to hackers. There has been endless cases of customers having their cash swept out from their accounts without authorization.
Check the social media pages of the bank and it’s chaotic with complaints of mysterious missing funds.
In a fraud case registered under OB /62/24/8/2020a Nyeri man lost his entire savings in Equity Bank. According to his son Edward Karungu, the old man had gone to bed with money sitting in his account only to wake up to an empty shell in what he now suspects to be an insider job and a weak link in the bank’s system.
In Last two weeksin Uganda, upto 11 customers came out so far to demand that Equity Bank Uganda replenishes their money totaling Shs25M which they claim went missing from their accounts.
In 2020, Banks advised those who had received fake currencies either through ATMs or over the counters to report the cases to the Central Bank’s Fraud Investigating Unit, or their respective banks as soon as possible.
Kenya Bankers Association Chief Executive Habil Olaka told the Nation that cases of fake notes getting into circulation from banks are “remote”, but said banks are willing to ensure the incidents do not recur.
“I would like to emphasize that a bank-related fraud, no matter how small, is investigated as a criminal offence by Central Bank of Kenya’s Bank Fraud Investigations Department. Each case does matter despite its magnitude,” Mr Olaka said in a statement.
“Bearing in mind the control measures exercised by most banks during cash handling, we urge members of the public alleging to have been issued with fake notes to report and present the suspicious notes to their respective banks or CBK’s Banking Frauds Investigation Department.”
The Association which represents commercial banks in the country was responding to a story we published in the Nation in which a number of Kenyans claimed they had withdrawn money from automated teller machines only to turn our fake.
Kenyans continued to share their experience with fake currency notes as some accused banking staff of conning out banks.
”This is how it’s done, the tellers accept fake money, they balance their accounts at the end of their shift, the money is put into the ATM, he gets his share and life goes on. Because you can’t deposit fake money through ATM. Don’t look further Banks should screen their staffs,” claimed Stephen Hanya, a Netizen in a comment.
The Consumer Federation of Kenya asked banks to acknowledge the problem and do something about it.
But banks argued the procedure of loading cash in ATMs follows a very strict routine to ensure notes customers get are authentic. According to Mr Olaka, each bank has installed counting devices which ensure the notes are genuine. “Any coins and notes that do not meet the serviceability threshold are filtered from the system and assessed further for their authenticity, hence ensuring they do not get into circulation,” the bankers chief continued. “All the ATMs have installed in their cash dispensers technology that besides detecting the currency and denomination also detects if the note is authentic before dispensing the same to the customer.”
Mr Olaka said notes that fail to meet the criteria are not dispensed to the customer but are put in a special “reject bin” within the ATM. These notes, banks say, are then collected by their staff and examined.
“While this is not a completely fool-proof system against fake notes we believe that the chances of a fake note passing through the cash management system, and the ATM machine are extremely remote,” he argued.
Banks dispelled fears that contracted staff from outside firms could be involved replacing genuine notes with fake ones, saying that each contracted individual must follow the laid-down procedure as indicated in their contracts.
But in retaliation to the cases. The controls banks said they had put in place:
1. All cash handling is under CCTV monitoring and always under dual custody of both bank staff and the contracted cash management firm.
2. Cash received in banks is scanned through a machine at point of receiving (by tellers) that validates and detects any fakes currencies.
3. Cash is then moved to Strong Rooms where again it is validated by a different team with bigger machines that will certainly catch any fake currencies no matter how sophisticated.
4. The cash is then loaded into locked trays that go into the ATMs. These “trays” cannot be manually opened or accessed.
5. The trays are inserted into the ATMs and only the ATM machine can pull out cash from the machines.
Not so long when recently an alleged case of fake currency dispensing at one of Equity bank branch in Donholm was reported by a Netizen on Twitter sparking new concerns as to how many fake notes of the same have circulated within the area and if this a normality is only an isolated case or replicated elsewhere and whether Equity bank has been upto the task put in place security measures by the regulator of curbing fake currency circulation, it’s a big shame for a big bank as Equity to be painted with such allegations as it casts many doubts on its security system- Bankers Association to tame such cases.
This is equity bank Donholm branch, avoid, they have fake notes, they have fake notes, avoid, avoid, infact we are waiting to see if they will change those notes. pic.twitter.com/mBrN5fB6MR
A tweet under which a section of Kenyans went ahead to castigate Equity bank management for employing inexperienced employees as tellers whom they referred to as underage staffs from their ‘wings to fly’ education initiative hence deteriorating customer service.
That place have conmen; That’s the problem of employing form 4 leavers as tellers 😹😹 hiyo branch imejaa watoto. Usikubali kutoka hapo kama hawajabadilisha. They once tried that shit on me.
As of the time of publication, Equity was yet to publicly comment on the above allegations.
Equity bank‘s weak links to frauds and fraudsters have put in on the international money laundering watch following recent allegations and links to DP Ruto Shs15billion loan phone call to a an investor crony of his —Ugandan tycoon Matthias Magoola of Dei Pharmaceuticals Company.The businessman who he negotiated a Sh15 billion loan from Equity Bank using the single phone call. An incident that have led to its management be summoned by Members of Parliament special committee.
Equity Bank’s mobile banking service named Eazzy Banking, has had the most complaints with the the customers say is prone to hackers. There has been endless cases of customers having their cash swept out from their accounts without authorization.
Check the social media pages of the bank and it’s chaotic with complaints of mysterious missing funds.
In a fraud case registered under OB /62/24/8/2020 a Nyeri man lost his entire savings in Equity Bank. According to his son Edward Karungu, the old man had gone to bed with money sitting in his account only to wake up to an empty shell in what he now suspects to be an insider job and a weak link in the bank’s system.
Last week in Uganda, upto 11 customers came out so far to demand that Equity Bank Uganda replenishes their money totaling Shs25M which they claim went missing from their accounts.
Conclusion
If an ATM dispenses fake notes, the accountability lies with the concerned bank. Banks have machines installed to detect forged notes that check currencies before they are handed over to agencies to stash ATMs. Failure to detect fake notes will be treated as the bank’s willful attempt to circulate counterfeit currencies. A penalty that should be imposed on the bank.
However, Here is what to do if you suspect a fake currency:
Hold fake note in front of ATM’s CCTV camera. Most of us leave an ATM without checking notes, committing the biggest mistake.
Before leaving the ATM, do check the authenticity of the notes. If they are fake, it is advisable to turn towards the CCTV camera and report it, for evidence. A security guard’s presence isn’t the only proof.
Keep the transaction slip, write down the note’s serial number, and then file an FIR.
If you get a fake note, submit it to the bank, which they’ll stamp with COUNTERFEIT BANKNOTE IMPOUNDED.
Gloves are off for President Uhuru who now more than ever appears to be moving rocks to hit his friend turned foe and his deputy, Ruto.
It all started with the blockade of his flight to Uganda in a move that was directed from the Statehouse, while making a clearance on the issue, Interior PS said that Ruto didn’t meet the requirements to fly out and more so that he needed to acquire a clearance from the President himself given he’s not only a civil servant but his deputy.
Ruto on his end has said that the blockade was meant to ridicule and embarrass him saying that he has never had to seek clearance or permission from the president to travel.
Reports are now emerging that the decision to block Deputy President William Ruto from travelling to Uganda was made on July 31 following concerns by the government that his frequent travels to the neighbouring country could be linked to money laundering schemes.
And even as debate on the aborted trip rages, focus by security officials has shifted to seven Turkish nationals, six men and a woman, who have been shuttling between Istanbul, Entebbe and Nairobi for the past few months.
Their activities, which culminated in the standoff at Nairobi’s Wilson Airport on Monday when Ruto was blocked from travelling out of the country by immigration, have been closely monitored for months by Kenyan authorities.
Ruto has claimed that he was leading a delegation to commission a Covid-19 vaccine plant that he had helped Turkish businessman Harun Aydin to put up.
Speaking during an interview with a local radio station yesterday, Ruto claimed he had helped Aydin to acquire a Sh15 billion loan from Equity Bank to set up a vaccine processing factory in Uganda, which he and three other businessmen alongside his close allies were scheduled to commission on Monday.
“I helped him on one phone call. He said the benefits Ugandans will get are the same that Kenyans will get.”
Many have questioned as to how simple it is for Equity to dish out Sh15B as a loan merely from a phone call and to foreigners whose past are questionable.
Claim by Ruto that he secured the loan of such magnitude by simply placing a call has elicited reactions from Kenyans who’ve been victims of banks collapsing in insider, fraudulent loans.
One phone call from Doktari William Ruto to Equity Bank can give you kes. 15 Billion…15B…. Some of these Banks have a lot of idle liquidity.
Would you feel safe as a depositor at a bank if a phone call by a politician guarantees a foreigner Kshs. 15 billion loan? With the hindsight of Chase Bank, Imperial Bank, Euro Bank…
Why did Ruto mention the bank and amount? Is Ruto out to destroy Equity Bank?
Unauthenticated letter doing rounds on social media allegedly from Equity Bank, has distanced the bank from the claims by DP that he secured the loan via a phone call.
The unauthentic letter doing rounds.
However, Uganda President Museveni affirmed that indeed it was Equity Bank that financed the project.
The facility, a brainchild of Mathias Magoola and funded by Equity Bank Ltd will focus on applying biotechnology to solve the health challenges of humanity through the creation of novel drugs, vaccines, and diagnostics.
— Yoweri K Museveni (@KagutaMuseveni) July 6, 2021
The focus is now on the Bank and how easily manipulated it can be that a phone call broke the ice and foreigners easily given Sh15B an amount that can collapse an institution.
Detectives on trailing the money flow and possible fraud in laundering, puts the bank in the middle of a circus that includes the deputy President, the foreign investors in what could be a long chain with conspirators. Banks have been used before in channeling dirty moneySiphoning dirty money and even with fines which Equity has been a casualty of CBK in several plunder of public funds, has never stopped the trade.
Equity Bank was fined Ksh 120 million for facilitating NYS and other scandals where money was packed in bags. Banking industry is the second largest criminal cartel in Kenya second only to the government.
Intelligence sources believe that Ruto by virtue of his office, influenced, brokered and ‘secured’ a loan from Equity Bank while working with Turkish nationals in the suspected money laundering scheme in Uganda before he was caught pants down. Bank allegedly used as a conduit. The new developments now put the bank under investigation and it’s only a matter of time before the truth come to surface. Question is how many such risky deals could be going on without public’s attention. And just how safe is depositors and investors money held at equity safe if a phone call can get Sh15B lifted from their bank with so much ease. Was this a political bargain and part of deal between Ruto and Equity Bank?
All this Wilson airport, Entebe, Uganda, Turks debacle raises more questions than answers. Is Equity Bank a money laundering base. What about other banks in Kenya?
During Ruto’s July 6 private visit to Uganda, he had met two men and a female, all Turkish nationals according to intelligence sources.
Two of the foreigners, Hamit Demir, holder of passport number U23165848 and Mehmet Akif Bagle, holding passport number U11979628, flew from Nairobi’s Jomo Kenyatta International Airport to Entebbe on July 6. They had applied for Ugandan visas while in Kenya.
Since there are no direct flights between Entebbe and Istanbul, the Turkish capital, travellers have to go through Kigali, Addis Ababa, Cairo, Nairobi or Doha.
The two departed JKIA at around 8.30am and arrived in Entebbe International Airport at around 9.50am, according to sources.
The sources said intelligence officers had launched a probe into the activities of some of the foreigners. Security officials were, however, not sent to Uganda to establish the real agenda of the meeting “due to risks involved”.
Following these developments, senior Kenya government and security officials decided on Saturday July 31 that the DP would not be allowed to travel out of the country. He was, however, not informed.
Equity bank is used as a conduit, but they have realized that this might put them in trouble, it's stinking.
Intelligence officials believe the meetings with the foreigners point to a scheme where the visitors could be used to launder money currently outside the country by purporting to invest it in Kenya.
This might explain why Monday’s controversial trip that involved some politicians and businessmen close to Ruto was billed as an investment mission where the Turkish man Aydin was presented as a partner in a multi-billion shilling fruit farming venture.
Kapseret MP Oscar Sudi, one of the MPs in Ruto’s delegation, has said they wanted to explore farming opportunities in the neighbouring country.
“There is a large fruit farm of which the Ugandan government can buy shares,” Sudi said.
Money laundering, according to authorities, seeks to hide the source of money believed to have been obtained illegally, by passing it through channels including commercial transactions and other forms of investment.
According to the Financial Reporting Centre, such schemes seek to hide and legalise the funds without catching the attention of authorities and also making sure all connections of the funds to criminal activities is removed.
Finally, the “cleansed” money returns to the owner in an indirect way, and is used for legitimate purposes.
According to the United Nations Office on Drugs and Crime (UNODC) about Sh200 trillion is laundered globally every year.
Kenya-based Equity Group and Rwanda’s Atlas Mara will review the terms of their deal in which the Equity was to acquire from the London-listed firm four banks in Rwanda, Zambia, Tanzania and Mozambique.
Acording to the initial plans, Atlas Mara was to be paid in the form of Equity shares amounting to a 6.72 percent stake with a current market value of Sh13.6 billion.
However, yesterday’s announcement indicated that they had not signed a binding agreement for undisclosed reasons. The parties also disclosed that their continued negotiations will likely result in a change of the deal terms.
“While there is no assurance that the potential transaction will be concluded on the terms previously announced, the parties continue to be engaged in discussions,” Atlas Mara said in a statement.
The parties didn’t disclose the hurdle that has blocked them from reaching an agreemen in the transaction that was announced in April last year and since then Equity’s prospects have brightened with the recent removal of lending rate controls.
Its share price has gained 32.5 percent since the deal was announcement to Sh54.2. The Atlas Mara banks, on the other hand, are making losses in aggregate.
According to parties with the knowledge about the deal, handing out the same number of shares would have seen Equity pay more in the deal that was initially priced at Sh10.6 billion.
For Atlas Mara, receiving Equity’s stock valued at the same Sh10.6 billion would have seen it take fewer shares because of a three-month market run-up.
According to disclosure by the multinationals, these banking units have a return on equity (RoE) of approximately two percent. Atlas Mara in previous discussions agreed to reduce the value of the four subsidiaries by Sh13 billion to reflect their weaker earnings.
Equity Bank Kenya is stealing from customers. Multiple reports by customers over missing cash from their accounts flood their customer care social media. This is not the first the Bank is on the spot for allegations of stealing from its customers and paying them off with bad customer service.
Kenyans often take to social media to share stories about their horrible experiences with the giant financial institution. Shocking incidents of money mysteriously disappearing from their accounts and being asked to pay loans they didn’t apply for.
One Kendi Gichobi took to Equity’s social media account late Saturday morning after money she had entrusted the bank with was withdrawn without her knowledge. In the tweet she furiously accuses the bank of not assisting her for a whole month and even blocking her calls.
Your money is not safe @KeEquityBank. 20,000 was withdrawn from my account without my knowledge and the bank has not refunded the money, despite waiting for the 30 days. It has even now blocked my calls. Retweet widely!!!#tokaequity
This is just one case of the amount of theft going on at the bank. Earlier this year Lydia Mathia, posted on facebook how the bank okayed withdrawal of her father’s Ksh34,000 in what looked like an inside job. Ms Mathia’s dad discovered that he could not use his Equitel pin and decided to visit Limuru branch where he had opened the account. The customer care attendants dismissed him rudely and told him off. After finally sorting things out by renewing the SIM card, the dad got a notification to repay an outstanding loan of Ksh34,000.
Another client was late last year met with a rude shock after Ksh400,000 went missing from his account. His money was withdrawn using the Equitel platform barely two days after being issued with an Equitel line. The client claims he was initially able to even check his balance using the issued Equitel line but it later malfunctioned and before he knew it he was Ksh 400,000 poorer.
Here’s a list of other Kenyans complaining about the same:
Joyce Gathumbi says: “My dad’s money was withdrawn… 180k and a loan of 40k on top. And instead of helping him to track it they keep telling him his loan is due.”
WHAT IS HAPPENING AT EQUITY BANK? WHY IS CUSTOMERS MONEY GETTING STOLEN?
@KeEquityBank How cab you allow a customer hard earned money to be withdrawn from the account through fraud ways in collaboration with equity staffs? I have lost money in my account at equity bank and it pains alot
A friend of mine has been an equity customer for a while, when they came up with this equitel line thing,he decided to try it out hoping it will be of help only fo him to find out his earlier savings was withdrawn like a decade ago including an overdraft of 7k
Good morning, hope you've withdrawn all your cash From Equity Bank and for those who were planning to open an account there, kindly don't even dare do that.
It's sad to see Kenyans been ripped off their hard earned money and the bank doesn't seem to care
In a new scheme, Transfers from the bank to mobile money often takes long hours on end, some lasting up to two weeks. This kind of fraudulence should not be tolerated, In fact trust them with your money at your own risk.
Former President Daniel Toroitich arap Moi on Thursday told the court that Equity Bank chief executive James Mwangi was conned out of Sh300 million in believing that he was selling him a contested prime parcel of land in Nairobi.
Mr Mwangi through his company Muthaiga Luxury Homes Ltd bought the property through Andrew Sunkuli and Samson Omwanza Ombati Advocate.
Mr Moi, through his advocate Fred Ngatia, said Mr Sunkuli and the lawyer are strangers to him and that he did not authorise the two to sell the property.
Mr Moi said upon learning of the alleged sale of the land, he made inquiries regarding Muthaiga Luxury Homes Ltd’s claim of purchase, and established that Samson Omwanza Ombati Advocate was questioned by Directorate of Criminal Investigations due to the complaint filed by the United States International University-Africa (USIU-Africa).
The 30- acre property in Nairobi, initially owned by Mr Moi, is claimed by Equity Bank boss, the USIU-A and US-based businessman George Kiongera.
The former President reckons he sold the prime piece of land in upmarket Muthaiga North Estate for Sh500 million to Mr Kiongera in June and has never dealt with DPS International.
Mr Ngatia says in court papers that upon being requested to furnish evidence of the instructions from the former President to himself, to act as Mr Moi’s advocate, Samson Omwanza Ombati was unable to present the instructions.
“This was for the reason that Mr Moi had never authorised the said person to act on his behalf in any sale of the property,” Mr Ngatia argues in the court papers.
Mr Ngatia said the money paid by Mr Mwangi’s Muthaiga Luxury Homes Ltd, to Omwanza Ombati was consumed by the advocate.
“Accordingly, Mr Moi did not receive any consideration for the purported disposal,” Mr Ngatia argued.
Billionaire Mwangi claimed he paid Mr Moi Sh300 million for the land in 2012.
Mr Moi said in court papers that at no point did Muthaiga Luxury Homes Ltd hold any discussions with him for the purchase of the said parcel of land, adding, “It is inconceivable that a transaction could have been agreed upon without any consensus by the contracting parties”.
The former Head of State explained that the sale of the land to Muthaiga Luxury Homes Ltd appears to have been a well-orchestrated scheme by Samson Omwanza Ombati Advocate and Mr Sunkuli to divest him of his property.
“Mr Moi to date retains the original certificate of title for the suit property which therefore means the documents used to register a transfer in favour of Muthaiga Luxury Homes Ltd were forgeries,” lawyer Ngatia.
Mr Ngatia said the alleged letter of instruction held by Samson Omwanza Ombati and Andrew Sunkuli is dated December 15, 2012, seven months after the fraudulent sale was concluded.
Mr Moi is seeking an order directed at the chief land registrar to nullify the transfer allegedly made by him to Muthaiga Luxury Homes Ltd, dated April 12, 2012 and registered on May 2, 2012.
