Kenya Insights

Tag: I&M Bank

  • MasterCard and I&M Bank Sued for Sh 20 Billion by Customers in Rwanda

    MasterCard and I&M Bank Sued for Sh 20 Billion by Customers in Rwanda

    Users of a Multicurrency Card issued by I&M (Rwanda) on behalf of MasterCard move to East Africa Court of Justice seeking compensation.

    Global payment company MasterCard and a regional bank I&M are being sued, alongside the Rwanda government, for USD 139 million (KES 20.1 billion) by 150 Rwandese cardholders who claim they were arrested and detained without trial and their cash and personal property confiscated following “false accusations” of bank fraud, money laundering and false enrichment.

    The applicants have filed the suit before the East Africa Court of Justice (EACJ) based in Arusha, Tanzania seeking a declaration that their arrest and detention by Rwanda Investigation Bureau infringed on their constitutional rights.

    In the suit filed by Ssemakula Ali Abaas and Nyinawumuntu Leatitia on behalf of the 150 other users of the Prepaid Mastercard Multicurrency Card issued by I&M Bank (Rwanda).

    The applicants are represented by Joseph McDonald of McDonald and Company Advocates of Nairobi, Kenya.

    “The dispute at hand centres on a group of Rwandan Citizens/Residents who entered into a Bank/Customer relationship with I&M Bank Rwanda PLC when the bank issued them with a Mastercard Multi-Currency card,” said McDonald, a Kenyan advocate.

    The Card could hold up to 17 different currencies and one of the benefits as advertised in the bank’s website was that a card holder could shift one currency to another within the card’s sub-wallets.
    Said McDonald.

    “A comparison between the rates offered by the bank and those on the MasterCard platform revealed that the latter offered favourable rates. The group would then develop the practice of shifting currencies within the card’s sub-wallets i.e. from AED to EURO and back to AED, resulting in a 10% profit. This activity essentially leveraged price differences across markets, a practice known as arbitrage. As a matter of fact, I&M had run a commercial advertisement that gave customers 10% discount on the usage of their multicurrency card.”

    On or around January 2023, the Rwanda Investigation Bureau arrested the over 150 individuals on allegations of bank fraud, money laundering and illicit enrichment.

    The applicants according to documents seen by Kenya Insights claim that they were detained without trial for more than three months, were denied bail, were extorted/ forced to transfer money to escrow accounts, their properties confiscated and their family members and friends were also detained and tortured to give information.

    Below are some of the suit’s documents:

    [pdf-embedder url=”https://cms.kenyainsights.com/wp-content/uploads/2024/02/IandMsue.pdf”] [pdf-embedder url=”https://cms.kenyainsights.com/wp-content/uploads/2024/02/Statement-of-Reference.pdf” title=”Statement of Reference”] [pdf-embedder url=”https://cms.kenyainsights.com/wp-content/uploads/2024/02/List-of-documents.pdf” title=”List of documents”] [pdf-embedder url=”https://cms.kenyainsights.com/wp-content/uploads/2024/02/1st-Applicant-Abassa-Affidavit.pdf” title=”1st Applicant-Abassa-Affidavit”]

  • I&M Bank, MasterCard Accused Of Extortion In Rwanda

    I&M Bank, MasterCard Accused Of Extortion In Rwanda

    Global payment company MasterCard, local I&M Bank and Rwandese government have been dragged to the East Africa Court of Justice (EACJ) over allegations of extortion, illegal detention and torture of 150 cardholders without trial and gross violation of human rights.

    In a class-action lawsuit filed by two individuals, a Ugandan and a Rwandese, on behalf of 150 other users of the multi-currency card at the Regional court, MasterCard, I&M and Rwanda Investigation Bureau are accused of complicity in the arbitrary arrest, detention, extortion and torture of users of the MasterCard Multicurrency Prepaid Card.

    The applicants namely Ssemakula Ali Abaas and Nyinawumuntu Laetitia who are being represented by Kenyan law firm McDonald and Company Advocates contend that on or around January 2023, Rwanda Investigation Bureau (RBI), an investigation organ of the Rwandan government, arrested and detained them together with other over 100 Rwandese residents who were customers of MasterCard/I&M for more than three months without trial. The RBI officers extorted from them, confiscated their property and denied them without bail.

    According to the lawyer, all the victims who were clients of MasterCard/ I&M as users of the MasterCard Multi-currency Prepaid Card issued by the I&M Bank have been detained in Rwanda without trial over alleged banking fraud, money laundering and illicit enrichment.

    “The dispute at hand centres on a group of Rwandan Citizens/Residents who entered into a Bank/Customer relationship with I&M Bank Rwanda PLC when the bank issued them with a Mastercard Multi-Currency card,” said McDonald, a Kenyan advocate.

    It is alleged that between November 2022 and January 2023, I&M Rwanda issued the Prepaid MasterCards to the victims.

    The card allowed the holders to hold up to 17 different currencies in different wallets on the same card. It is said that the card also allowed the holder to pay for goods and services from merchants displaying the sign corresponding to that appearing on his or her card.

    “One of the benefits as advertised in the bank’s website is that a card holder could shift one currency to another within the card’s sub-wallets. A comparison between the rates offered by the bank and those on the MasterCard platform revealed that the latter offered favourable rates,” Abaas and Laetitia state in their affidavits filed in court.

  • Kiwipay Kenya Investor Accuses Law Firms For Exorbitant Charges As KRA Seeks A Share From The Firm Linked To Card Fraud

    Kiwipay Kenya Investor Accuses Law Firms For Exorbitant Charges As KRA Seeks A Share From The Firm Linked To Card Fraud

    Kenya Revenue Authority is now seeking Sh3 billion in taxes from Kiwipay Kenya Limited; a company embroiled in Sh2.3 billion monies that had initially been frozen over money laundering claims.

    In a new suit, a foreign investor who claims to be the main shareholder and Director of Kiwipay Kenya Ltd, claims the company continues to go deeper into debt as several suits regarding the firm await determination.

    Monthida Rashi from Laos, a South east Asian country, is fighting to control the cash and company against three Kenyans who also lay claim to the said billions held at Eco Bank.

    Rashi claims that the three Kenyans; Maina Njenga, Felix Rekishe and Solomon Maina resigned and therefore, could not purport to act for the company.

    An order freezing the money was lifted last September after the Assets Recovery Agency (ARA) withdrew the application seeking to forfeit the money to the government.

    How law firms shared the funds

    Last month, High Court judge Dorah Chepkwony directed the law firm of Rene & Hans LLP to be paid US $2.5 million for representing three Kenyans after they were allegedly removed as shareholders and directors of Kiwipay Kenya ltd.

    But soon as the money was released to I&M Bank, the law firm instructed the lender to distribute the funds.

    Documents filed by the lender in court showed that Arcoverde (K) ltd received Sh50 million, William Kabogo Gitau Sh130 million, Kenneth W Odhiambo Ojwang Sh25 million, Sharon Mirella Wakho Sh10 million, Squire Afrilaw Consult ltd Sh7 million and Ivio Advocates LLP Sh20 million.

    Others who received the share of the money are W Weke and Company Advocates Sh10 million, MMA Advocates LLP Sh.5 million, Isaac Rene Okumu Sh 25 million, Simon Munene Mwendia Sh5 million, Joel Githiu Ngari Sh5 million, Isaac Rene Okumu Sh7.2 million who also received another Sh.800,000.

    Attempts by the main shareholder of Kiwipay Kenya ltd Laos citizen Monthida Rashi to block the distribution of the money were futile.

    This is after the bank revealed that the funds had been released by the time it was served with a court order.

    “In view of the foregoing, the Bank is unable to comply with the order stopping the transfer of the said funds as it has been overtaken by events,” the bank said in an affidavit filed in court.

    The Bank is also opposed to be joined in the proceedings as it does not hold any funds which are the subject matter of these proceedings.

    The Bank further states that on 3rd April 2023, former Nairobi Governor Mike Sonko visited the lender accompanied by Rashi demanding information on the company’s account.

    However, the Bank declined to divulge any information claiming it would be in breach of the Bank’s duty of confidentiality with the law firm who is the Bank’s customer.

    Rashi said she reached out to the former Governor requesting for assistance, being a foreigner.

    On the same date of 3 April 2023, the Bank separately received two letters from Kiwipay’s Advocates informing it of the on-going cases and the existence of the court order, which barred it from transferring the said Funds.

    The order barring EcoBank from transferring the subject funds was obtained on 31 March 2023 which was the same date the 2nd Respondent transferred the funds to the Bank.

    I & M Bank claims it was not aware of any order stopping the transfer of the said funds and only came to learn about it on 3rd April 2023 after the visit by Mr. “Sonko” as well as upon receipt of the two letters from the 1″ Respondent and its Counsel.

    The Bank received funds on 31 March 2023 supported by a court order dated 27th March 2023 and obliged to the law firm/customer instructions to transfer the funds.

    New suit

    In the new suit, Rashi claims the company stands to be penalised and lose business as a consequence of indebtedness and inability to meet its financial obligations whilst funds are held on the basis of the order procured through fraud, misrepresentation and ill motive. “Eco Bank has whilst the orders are subsisting paid money to other parties and consequently some of the liabilities that have accrued as debts to the company including statutory outgoings and taxes which have fallen due and attract penalties,” Rashi stated in court documents.

    The SouthEast Asian National has also accused several law firms of exaggerated and fabricated claims on legal fees and other consultancy fees amounting Sh500 million

    Rashi, through lawyer Wilfred Mati, claims she has been frustrated by various court orders as an investor and several law firms have obtained the orders for exorbitant payments.

    “Company stalled its operation in November, 2022 as its funds in the account were frozen and dbts including taxes have accumulated and their debts now stand at Sh67 million,” she said in court documents.

    It is her case that the said lawyers represent the interests of parties other than Kiwipay Kenya Limited where she is a director and shareholder.

    She wants the court to order the law firms to refund the Sh500 million paid to them and the consent orders reinstating the three Kenyans as directors be suspended pending hearing of the suit.

    She also wants the 10 suits filed relating to the company be consolidated and heard by one judge.

    Justice Josephine Mongare of the Commercial Division directed the files be placed before Justice Alfred Mabeya for directions