22 May 2019

Kenya: Chase Bank Gave Sh120 Million Bad Loans to Ex-Chair's Brother - Witness

Former Chase Bank chair Mohammed Zafrullah Khan's brother and his wife were advanced unsecured loans of more than Sh120 million through their companies, a court was told on Wednesday.

Mr James Kinuthia Njoroge of SBM Bank, which bought the collapsed lender, said Mohammed Najifrullah Khan and his wife Amira Claudia Wagner Khan were granted loans through Cleopatra Holdings Limited and Golden Azure Investments.

Mr Njoroge said Najifrullah was given a loan of $588,000 (Sh58.8 million) even though there was no security.

The witness further told Milimani Senior Principal Magistrate Martha Mutuku that Cleopatra, jointly owned by Amira and Zafrullah, irregularly obtained a loan of $635,590 (Sh63,590,000) from the bank.

"A bank statement for Cleopatra and Golden Azure shows they were credited loans irregularly and had not repaid them by the time the bank went under," the SBM employee said.

COMMON THREAD

Led in giving his evidence by state prosecutor Rubby Okoth, Mr Njoroge said statements of accounts for Cleopatra, Golden Azure, Camellia Investments and Colnbrook had one common thread - unpaid unsecured loans.

He said he discovered that this was the case when he was shown documents by police officers at the Directorate of Criminal Investigations (DCI) as he recorded his statement.

Ms Mutuku directed the prosecution to furnish defence lawyers Cecil Miller, David Chege and Mutuma Kibanga with copies of four credit files of the companies which obtained unsecured loans.

The lawyers will cross-examine Mr Njoroge further as he will continue to testify against the former chair and nine other parties facing charges of fraud, theft and money laundering.

Ms Mutuku discharged Mr John Baptist Kaniaru who stood surety for Mr Khan when he flew to the United States for medication.

Mr Miller, who returned Mr Khan's passport to court, said he exhibited honesty when he returned for the trial.

THE ACCUSED

Zafrullah is charged alongside former Chase Bank senior employees Duncan Kabui Gichui, James Mwaura, Makarious Omondi Agumbi, Camellia, Colnbrook, Golden Azure and Cleopatra.

The eight, as well as Najifrullah and Amira, are said to have conspired to defraud the bank by pretending that loan disbursements of Sh529,328,000 and $1,326,000 to Camellia, Colnbrook, Golden Azure and Cleopatra were genuine.

They have denied all the charges in the case and thee ex-chair claims the monies internally transferred to Islamic loan accounts were Musharak Property loans.

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