Police barred from investigating bank on fraud claims

BY WAHOME THUKU

Banks are known to claim high value for their customers. But when that relationship collapses, the result can be decades of legal suits.

In 1988, United States Agency for International Development ( USaid) developed a programme for granting loans to rural entrepreneurs to undertake commercial projects. The money was to be channeled though KCB.

Benjoh Amalgamated Ltd applied for funds through KCB and was granted an overdraft of Sh1.8 million in April 1989. In the same year, it was granted a further loan and an additional overdraft in 1990.

The loans were guaranteed by Muiru Coffee Estate and secured by three parcels of land owned by the two companies in Kiambu and Nyandarua.

Benjoh Amalgamated defaulted on payment. KCB wrote to them demanding payments.

What followed was a series of lawsuits and countersuits by the two parties from 1992. The cases moved from the High Court to the Court of Appeal and back.

Then the matter took a criminal dimension in mid 2010 when Benjoh Amalgamated lodged a complaint with the CID claiming forgery and fraud in the account at KCB. By this time, KCB has trounced the companies in a number of civil applications in court.

The CID headquarters wrote to KCB demanding explanation on several issues about the account.

There was an exchange of letters between the CID director, the Attorney General and KCB Chief Executive Officer, Martin Oduor, on the matter.

Oduor defended the bank saying Benjoh Amalgamated had resulted to criminal complaints after losing the civil cases.

Recommended Videos

Crime and unemployment

Boxing bouts fade in coast

The importance of public speaking

Wakulima wahamasishwa kuhuzu mradi wa maziwa