Chase Bank has sued its former chairman and former senior managers in an effort to recover billions of shillings they are accused of illegally siphoning from the lender during their more than 10 years at the helm.
Through its lawyer Philip Murgor, the bank says that former chairman Zafrullah Khan, former managing director Duncan Kabui, former general manager corporate assets James Mwaura and former general manager finance Makarios Agumbi used their positions to illegally acquire and benefit from the bank’s assets it now seeks to recover.
Also included in the suit are Chase Assurance and Ghengis Capital managing director Ali Cheema, Rafiki Microfinance chief finance officer Daniel Mavindu, former directors Anthony Gross and Ruth Muthoni, and a network of 11 companies said to have been used to siphon funds from the collapsed lender.
Mr Khan is accused of living a flashy lifestyle off plum bank accounts and prime real estate property he acquired using illicit proceeds from the collapsed lender.
Mr Khans ownership of two Sh60 million top-of-the-range cars registered to his wife— a limited edition Corvette and a Ferrari Dino has put him on the spot for his luxurious spending while at the helm of the bank.
Ms Khan also received Sh3.5 million for upkeep, which Chase Bank now says was illegally withdrawn from its Central Bank of Kenya settlement account.
The suit has also offered a glimpse to how the alleged crimes were uncovered
Investigations found that Chase Bank co-founder Laurent Demey blew the lid on the lender via an email to Mr Khan and Mr Kabui, and was copied to Richard Carter, a non-executive director on February 22 last year.
Of the Sh14.9 billion Chase Bank is pursuing, Sh1.05 billion was in bonuses irregularly paid to Mr Khan while Sh6.9 billion was paid to the network of companies owned by the defendants.
Chase Bank lawyers claim that Mr Khan, Mr Kabui, Mr Mwaura and Mr Agumbi had acquired close to 50 per cent of the bank’s shares through proxies. Court filings indicate that Mr Khan ensured that a Sh1.05 billion bonus he was to receive over five years based on performance was paid to him in under two months of board approval.
Mr Khan and Mr Mavindu allegedly transferred Sh942 million to a company they jointly owned, Riverside Mews Limited.
The duo then transferred another Sh481 million to another company with a similar name that they co-own, Riverside Mews Investment Limited. Mr Khan is also accused of paying his company Rivieres Finance Limited “consultancy fees amounting to Sh177.2 million, Sh161 million to Ghengis Capital, and Sh48.4 to an account he holds at Iman Bank of Somalia.
The audit says Mr Khan further transferred Sh335 million to Orchid Capital, Sema Mobile Services and Chiggle Mobile services in his and Mr Kabui’s benefit.
The former Chase Bank boss also transferred Sh288 million to AMB Real Estate as an investment and siphoned Sh507 million for his “personal use” before the lender was placed under statutory management.
Mr Khan has been accused of tapping over Sh2.2 billion from Chase Bank.
Justice Grace Nzioka directed the Chase Bank lawyer, Mr Murgor, to appear before on Thursday for directions.