21 May 2019

Kenya: Ex-Chase Bank Boss Gave Sh1bn Unsecured Loans, Court Told

.he he The former chair of a collapsed bank advanced companies associated with him loans totalling more than Sh1 billion without securities, a court heard on Tuesday.

Testimony presented before Milimani Senior Principal Magistrate Martha Mutuku showed Mr Mohammed Zafrullah Khan of Chase Bank Limited did not repay the loans.

The magistrate heard that Mr Khan, whose lawyers are Cecil Miller and David Chege, did not even furnish the bank with details of the directors of the companies as required under the rules of such operations.

The companies - Colnbrook Holdings Limited and Camellia Investments Limited - received the loans between 2012 and 2015.


James Kinuthia Njoroge, a former senior manager of credit administration at Chase Bank, revealed this while testifying on the second day of the trial against Mr Khan and nine others.

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He said Camellia had not repaid an unsecured loan of Sh603,218,124 when the bank folded its doors to its customers.

The court heard that Paul Luso, the receiver manager seconded to Chase Bank from Kenya Commercial Bank, wrote to Camellia to repay the loans within seven days but that this never happened.

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

The company had a dollar and a Kenya-shilling account. The dollar account loan of $4,715,000 had accrued interest to the tune of Sh482,108,750 as at December 30, 2015.


Besides Mr Khan, other former senior employees of the bank who are facing fraud charges include Mr Mwaura, Duncan Kabui Gichui (manager) and Makarious Omondi Agumbi (general manager, finance).

The other parties are Amira Claudia Wagner, Mohammed Najifrullah Khan, Camellia, Colnbrook, Golden Azure Investments and Cleopatra Holdings Limited.

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

They allegedly committed the offences between August 28, 2009 and March 3, 2016.


Mr Khan, Mr Kabui, Mr Mwaura and Mr Omondi are accused of stealing Sh46 million on February 28, 2012.

Another charge states that in December 2015, Mr Khan, Mr Mwaura, Mr Omondi and Camellia stole Sh483,328,000 from the lender.

Mr Mwaura and Mr Omondi are also charged with stealing $588,000 on December 31, 2015.

Mr Mwaura and Mr Omondi have denied charges including theft of the Sh483 million by virtue of their employment.

The former chairman and Colnbrook have denied charges including theft of $108,000 on February 28, 2012.

Mr Khan claimed the monies were loans to Musharak Property.


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