Central Bank of Kenya (CBK) has gone to meticulous lengths to conceal its tracks in the execution of Sh48 billion Imperial Bank fraud, we can now reveal.
Court documents we have seen reveal an elaborate scheme that started immediately directors of the bank armed with a forensic audit report they had commissioned reported the fraud to CBK in October last year.
Save for a miracle, the scheme could bear fruits if CBK has its way and liquidates the bank a move that could bury the allegations against the regulator’s staff for good.
The first act to wipe out the finger prints of the banking sector regulator in the fraud was the appointment of Peter Gatere as the Imperial Bank’s first receiver manager.
Gatere, who before the appointment was a banking supervision official, is among top CBK officials adversely mentioned in the forensic audit conducted by US based FTI Consulting soon after the death of the bank’s former managing director Abdulmalek Janmohammed.
His name comes up in email correspondence unearthed by FTI Consulting with former Imperial Bank Chief Finance Officer James Kaburu in a conversation that suggests they warned each other whenever a whistle-blower sent an email to CBK on the fraud.
The emails were shared privately between Kaburu and Gatere.
“This private correspondence of such a serious and damning allegations confirms beyond doubt that the fraud perpetrated at the bank was a direct result of the collusion between officers at CBK and senior managers at the bank,” says Mukesh Shah in a replying affidavit in a case where Kenya Deposits Insurance Corporation (KDIC) wants the directors and shareholders assets frozen.
Once appointed, Gatere moved quickly and appointed Kaburu as his deputy managing director. At the time he was appointed, Kaburu had already confessed to the directors of the bank that he had actively helped Janmohammed to execute the theft. He had also owned up to bribing CBK officials to help in covering the fraud for10 years.
Gatere and Kaburu would later be replaced quietly from the bank with the former’s position going to Mohammud Ahmed.
Kaburu on his part has been charged in court for the fraud together with Naeem Shah who was head of credit.
Curiously, no other Imperial Bank staff has been charged although the forensic report names others who were part of the game.
CBK is also yet to charge its other officers who have been mentioned by the forensic report as having colluded in the fraud.
FTI Consulting named four other top officers of having been part of the cover up the scheme. Some of those mentioned did more than just cover up.
For example, Reuben Cheres is seen in email conversations helping sanitising the banks financial statements on instructions from Kaburu.
“The highlighted in purple are the ones to be deleted. Classification of automotive solutions should change from doubtful to watch,” says Kaburu in a email to Cheres accompanied by an attachment of banks financial statements for June 2014.
In his affidavit, Mukesh also names Cheres as the one of the CBK officials that helped in fiddling the banks statements.
“It is worth noting that the officer at CBK who colluded to falsify the (bank’s) schedules is the same one who approved appointment of PKF as auditors,” he says.
Former CBK governor Prof Njuguna Ndung’u is also named in the forensic report with his wife seen in email conversations asking Janmohammed through his secretary Ann Mboya to finance his return tickets from a holiday in Thailand.
Janmohammed agrees and even goes further to pay for their accommodation during the holiday.
Others named as beneficiaries of bank’s loot at CBK are assistant director, Banking Supervision Matu Mugo and his colleague Ronald Geoffrey Langat.
Tellingly, none of the current former CBK officials named in the heist by the initial forensic audit have been investigated or charged in court for their role in the fraud.
In fact, FTI Consulting have curiously slowed down their investigation of the fraud with the only result from the forensic auditor been a 44 page preliminary report submitted in February this year.
The preliminary report mainly concerns itself with following the movement of money from the main suspect account of W.E Tilley.
In regard to the CBK officials, the forensic auditor who is now on the regulator’s payroll is yet to establish the movement of money from one of the secret loan account at Imperial Bank titled Central Bank which was identified by the initial audit.
On the recovery side, the only effort by CBK has made so far is on W.E Tilley although the initial forensic audit point out two other accounts as having been the conduit for the fraud.
The two accounts are owned by Jade Petroleum and Adra International, whose ownership FTI Consulting established to be Raj Devani, a relative of the architect of the Triton Scandal Yagnesh Devani and Pankaj Somaia,also a relative of fraudster Ketan Somaia.