Popat in tears, cites plot to derail bank reopening

Imperial Bank chairman Alnashir Popat yesterday shed tears as he revealed that there were forces out to ensure that the collapsed institution does not get back on its feet.

Popat broke down as he made closing remarks in a speech that was punctuated by profuse apologies to the various stakeholders in the bank.
He was just in the process of apologising to the shareholders, including staff, when he lost words as he was overcome by emotion.

“You remain the heart and soul of the institution and I can only imagine the sense of betrayal, anger and uncertainty you must feel. We must refuse to let a few bad eggs get in the way of our lives and dreams,” he said in a halting speech.

Speaking at the press conference, the first since the bank was shut down in October last year and placed under receivership, Popat said shareholders’ efforts to reopen the bank were getting frustrated by people who were well known to Central Bank of Kenya (CBK).

“The focus must be on protecting depositors, shareholders and the bank staff who were not involved in the fraud and going after the real culprits in this fraud, who are known to us and the CBK. We have established that some of these individuals have been working against the reopening of the bank to protect their personal interests,” Popat said.

Curiously, people mentioned as having orchestrated the Sh34 billion fraud are still roaming free.
For the last three months since the fraud was exposed by the bank’s board of directors, CBK, Ethics and Anti-Corruption Commission and Director of Public Prosecutions have not charged anybody, even though the agencies have the forensic investigation report that shows the key players.

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Secret loan accounts
By the time we were going to press, CBK was yet to respond to our queries on why it was taking too long for the banking regulator to set in motion the process of charging those suspected to have committed or helped in orchestrating the fraud.

According to an affidavit annexe  (FTI Consulting report presented to CBK on October 12, last year) filed by shareholders last Friday in court, among those who were involved in the fraud were former finance manager James Kaburu who was the right hand man to the former group managing director Abdulmalek Janmohammed (deceased), the key architect of the fraud who had also helped in the creation of an accounting system that understated the bank’s assets and liabilities.

According to the filing, it was Kaburu and the bank’s credit manager Naem Shah who created secret loan accounts for the eight members of the Firoz Jessa family and their 12 companies in which depositors’ funds would be put before being transferred to other accounts where they would be registered as interest bearing deposits.

Naem Shah on the hand did not just help in creating the secret accounts but also operated one of the secret accounts together with Janmohammed and Zulfar Haiderali Jessa which received billions of shillings illegally paid out to them as interests on deposits.

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Another key suspect in the scheme is Rajan Kishorilal Shah, who was the bank’s external auditor. Rajan is a senior partner at the audit firm PKF. For the 13 years that he audited the bank, he was aware of the existence of the fraudulent transactions through the secret accounts but failed notify CBK or the bank’s shareholders.

He was also a beneficiary of the illegal scheme operating one of the secret accounts which was receiving Sh3 million during the period.
The plot in the scheme thickens when shareholders mention that public officials were involved in the scam.

Yesterday, Popat alluded to the role of the public officers in the perpetration of the scam saying the shareholders will not let the actions of Janmohammed, “and a handful of weak and corruptible managers and public officers destroy the lives of the people who placed their trust in the bank.

Aware of scam

According to the affidavit, shareholders allege CBK had been tipped of the scam as far back as 2012 but failed to act.
The whistleblower who tipped Central Bank of Kenya on several occasions had also said that some of the CBK inspectors were aware of the scam but that they were helping in covering up the scam.

The shareholders yesterday claimed both CBK and Kenya Deposit Insurance Corporation were keeping them in the dark on progress made on efforts to reopen the bank or what measures the receiver manager was taking to recover the lost funds.

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