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Ex-Chase Bank bosses charged with Sh1bn fraud

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Former Chairman of Chase Bank Mohammed Khan
Former Chairman of Chase Bank Mohammed Khan listens as his Lawyer Cecil Miller argues before a Nairobi Law Court on September 13,2018. PHOTO | EVANS HABIL | NMG 

Former Chase Bank chairman Zafrullah Khan and former managing director Duncan Kabui have been charged with stealing Sh1.15 billion from the lender, adding a new dimension to the long-running case.

Kibwezi West MP Patrick Musimba and his wife, Angela Mwende Musimba, were among a total of nine people charged alongside the two.

The Central Bank of Kenya’s (CBK) Banking Fraud Investigations Department (BFID) Thursday preferred the fresh charges at the Nairobi Milimani resident magistrate’s court. Only Mr Khan was present to take a plea in the case while the rest were asked to appear on September 17. The list of those charged alongside the four includes the bank’s former general manager for corporate credit, James Mwaura Mwenja, former general manager Makarios Omondi Agumbi, Lucien Sunter Vlasman, Ronald Petrus, Porting Access Limited and Itecs Limited.

Mr Khan, who was represented by lawyer Cecil Miller, denied four counts of conspiracy to defraud, stealing and money laundering.

Mr Miller applied for Mr Khan’s release on bond, arguing that he is already facing two other cases arising from the same transactions.

He told the court that Mr Khan is a heart patient and was scheduled to fly to the United States for a third heart surgery this week, but was summoned on September 11, 2018 to appear before the Director of Criminal Investigations (DCI) for processing.

“Police signed the charge sheet in a malicious move to bar Mr Khan from travelling to America for a third heart surgery. He has had two successful heart operations before and had been booked to attend a third one this September 2018,” Mr Miller said as he urged the magistrate to release Mr Khan on the strength of the Sh2 million cash bail in respect of the other two cases.

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“Mr Khan is not a flight risk. He had been allowed to travel to America for a heart surgery twice and returned his passport to the court as directed,” Mr Miller said.

The accused had been directed to deposit his travel document in court as a condition to secure his freedom in the two other cases.

James Warui Mungai, representing the prosecution, did not oppose the release of Mr Khan on bond but asked the magistrate to impose new bail conditions because the case is a fresh one.

Mr Mungai also applied to have warrants of arrest issued against Mr Musimba, Mwende, Vlasman and Petrus.

Mr Miller promised to present Gichu, Mwenja and Agumbe to the police for processing and to produce them in court on September 17 as directed.

The court directed that Mr Khan be remanded in custody until Monday when it will determine the request for his release on bail.

Khan and his co-accused are charged with stealing Sh1,150,125,587 from Chase Bank between January 23, 2015 and March 2016.

Mr Khan has been separately charged with stealing the money by virtue of his employment.

The 10 are also charged with conspiring to steal the money by irregularly disbursing the said amounts to Porting Access Limited and Itecs Limited without following the payments process as stipulated under the Finance Policy of Chase Bank (K) Limited.

Khan, Mwenja, Kabui and Agumbi also face money laundering charges for moving Sh740,442,687 from the collapsed bank to Paramount Universal Bank.

The five also face another money laundering charge for moving Sh409,682,900 from Chase Bank to Kenya Commercial Bank.

Mr Musimba, Mwende, Sunter, Vlasman, Petrus and the two companies Porting and Itecs face money laundering charges for allegedly benefiting from the said Sh409,682,900 that had been removed from Chase Bank to KCB’s Kipande Branch.

The seven (Musimba, Mwende, Sunter, Vlasman, PetrusPorting and Itecs) are accused of benefiting from proceeds of crime by transferring Sh409,682,900 from Chase Bank to Paramount.

The case will be mentioned on September 17 for Musimba, Mwende, Sunter, Petrus, Mwenja, Kabui, Agumbi, Porting and Itecs to enter pleas in the case.

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Kenya to import mitumba after coronavirus pandemic

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LUKE ANAMI

By LUKE ANAMI
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Kenya is set to lift the ban on imports of second-hand clothes once the Covid-19 pandemic is over, the Industry, Trade and Co-operatives Cabinet Secretary Betty Maina has said.

The Cabinet Secretary last Wednesday announced an immediate temporary suspension of the importation of second-hand clothes as a measure to stop importing the SARs-Cov-2 virus that causes Covid-19 disease.

Ms Maina said the action taken is in line with the conditions as set out by the Kenya Bureau of Standards (Kebs).

“The government has suspended importation of second-hand clothes with immediate effect to safeguard the health of Kenyans and promote local textiles in the wake of coronavirus,” said Ms Maina.

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“Most of the Mitumba imports come from China and Pakistan, countries which are the epicentre of the coronavirus pandemic. The decision is intended to safeguard Kenyans against the spreading of the coronavirus and is therefore a health issue,” she said.

In an interview with the The EastAfrican, Ms Maina said the Kebs will enforce the suspension as we wait for the situation to improve.

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“It is a requirement by the Kebs to take such an action in times of an epidemic like the Covid-19,” she said.

A recent study by the US Centres for Disease Control and Prevention shows that the virus can stay longer on different surfaces, including clothes.

Ms Maina, however, said the temporary ban will not in any way affect the policy on Mitumba imports from the US.

Under the African Growth and Opportunity Act, Kenya sold about Ksh40 billion ($400m) worth of textiles and clothing to the US.

“This does not in any way affect our policy on our imports from the US. The decision is strictly an urgent measure to curb the spread of the coronavirus,” added Ms Maina.

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World Bank pushes G-20 to extend debt relief to 2021

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World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.

“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.

He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.

The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.

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People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.

For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.

Debt burdens, already unsustainable for many countries, are rising to crisis levels.

“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.

ALSO READ:Global Economy Plunges into Worst Recession – World Bank

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Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans

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The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.

“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”

According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.

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Tighter Reins on Platforms for Mobile Loans

The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.

Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.

Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.

SEE ALSO: Central Bank Unveils Measures to Tame Unregulated Digital Lenders

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