Fresh details reveal top judge’s dalliance with collapsed bank

DCJ Philomena Mwilu at Milimani Law Courts where she was due to take plea. (George Njunge, Standard)

A fresh trove of electronic mail correspondence now shows how deep the relationship between Kenya’s second most powerful judge with her bank, the collapsed Imperial Bank, was since 2013.

Email correspondence shows that one of her close kin worked at Imperial Bank at the time her controversial loan transactions were being processed.

Prior to the relative working for the bank, Mwilu had been proposed by an insider for appointment as a non-executive director of the institution in November 2013.

It is not clear how this proposal was later handled, but the kin was soon thereafter employed at the bank and would at times be sent to pass over correspondence meant for her.

“Greetings, forwarded herewith the CV for your necessary action. Kindest regards, Mbete Mwilu,” Mwilu wrote on February 2014 to her main contact at the bank, Mehbooba Shamji Khimji, a senior business development manager.

Earlier on, Mwilu’s kin had sent his Curriculum Vitae to her before she forwarded it to Mehbooba “for necessary action”.

Mehbooba was the one who proposed Justice Mwilu to be considered for an appointment as a non-executive director on November 29, 2013.

The recommendation, done on email, was sent to Anil Shah, who was the head of internal audit at the bank and was reporting to board audit committee, a small team of the bank’s board.

It is not clear if Justice Mwilu knew of this proposal. There is also no evidence that Justice Mwilu ever considered the proposal or if she ever took up the role at the bank.

A non-executive director is a member of the board involved in policy-making and planning exercises but does not engage in the day-to-day management of an organisation.

Prof Tom Ojienda, a member of the Judicial Service Commission (JSC), says a serving judge can serve as a non-executive director of an entity as long as they do not earn a salary, they declare their interest and they do not preside over any matter in relation to that institution.

“But the advice is always to stay away since it exposes one to a bigger risk,” Prof Ojienda said.

Justice retired Muga Apondi says once appointed as a judge, one should know that it is a full time job and it is a vocation where you commit yourself: “It is not advisable for a sitting judge to be appointed as a director of an institution outside the judiciary.”

Ugandan company

The correspondence also reveals that an amount of Sh64.9 million, which was used to repay part of her loan at the bank in December 2015 was deposited by a Ugandan company. The company had been registered three months earlier. 

The amount, Sh64.9 million, from a Ugandan account held at Crane Bank, was a single transaction. Crane Bank also had its own problems and it also collapsed. It was later sold by the regulator of banks in Uganda, after Imperial Bank in Kenya also collapsed.

The email from a Kihara MN, an official of the Central Bank of Kenya (CBK), to Imperial Bank explaining the transaction shows that an amount of Sh64,999,450.80 was deposited by RAEI Investments Limited Kampala – which was the ordering customer.

“Happy new year and good afternoon Kip (Kipsanai LK). Kindly see if you can confirm the payee of the highlighted monies herein received on December 30,” an email written by a Mr Mugambi reads in part.

The transaction happened on December 30, 2015, three months after the company was registered on September 21, 2015.

The beneficiary of the transaction was the account of Justice Philomena Mbete Mwilu, held at Imperial Bank in receivership here in Kenya. The details of the payment was given as the transfer for purchase of property in receivership.

There is however no suggestion of impropriety on the part of the judge.

Mehbooba, in one of the loan undertakings, asks an administration manager at the bank to check the work schedule of Mwilu’s kin to ensure that he delivers some documents to her in September 2015.

“Please follow on the undertaking to make sure (he) goes home with it this evening,” Mehbooba writes in one of the emails.

In a separate email, Mehbooba asks Jackie Akeyo, an administration assistant, to find out if Justice Mwilu’s kin would be working the following day to take the documents.

“Morning. He is at work today. I have already informed him that we will need to deliver some documents to (her),” Jackie responds.

Insiders at the bank confirmed that indeed Mwilu’s close kin works at the bank and positively identified him in a picture taken alongside Justice Mwilu at an official function in Nairobi.

It also appears from the correspondence that before the sudden death of the bank’s boss, Abdulmalek Janmohamed, a business meeting had been arranged between the two sometimes in 2013.

Tourist destinations

“MD. Justice Mwilu is not answering her phone. I have sent a text. Will revert once I manage to speak with her,” Mehbooba writes to the MD.

Soon after, Mehbooba manages to reach Justice Mwilu and she writes another email about two hours later confirming the meeting at 3.15pm on September 30, 2013.

“Dear MD. Further to below, client has said she will come at 3.15pm today, barring any urgent matters at her work place,” Mehboob writes. The subject of the email is ‘Philomena.’

Her relationship with Mehbooba also extended from outside official matters of the bank to include sharing ideas on great tourist destinations.

In December 2013, just weeks after she had recommended Justice Mwilu to be considered for appointment as a non-executive director at the bank, Mehbooba shared with her experience of a recent visit to Thailand.

“Dear Justice Mwilu, please attached below, various correspondence for my trip to Thailand. The hotel we stayed at Bangkok was called Ariyasom Villa and the place on the beach that I was speaking off, is Koh So Mui,” Mehbooba writes.

“See if you google the above what you get. I sent an email to my travel agent (copied below), giving them feedback on the trip after that I thought you will appreciate also. Regards and we talk soon,” she adds.

Stamp duty

Justice Mwilu responded in a one line sentence saying she will contact the travel agent.

“Thanks gal, this looks exiting (sic). Will give Peter a call and tell you all,” Mwilu responds. Peter is the travel agent.

Yesterday, Mwilu’s lawyer Senior Counsel Okong’o Omogeni said these matters are outside the realm of what has been presented in court through the charge sheet.

“I am not aware of those issues. They are not in court and even if they were, I would not comment on them. What we have is the case on two loans and the matter of stamp duty and we cannot go to the merits of the case because we have filed a petition,” Omogeni said.

According to the documents, the bank had approved loans of Sh172 million to be disbursed to Justice Mwilu. However, only Sh132 million in principal was disbursed.

The first installment approved was Sh60 million, which was allegedly disbursed in full. The second approved amount was Sh100 million. However, only Sh60 million was disbursed. The third was Sh12 million and the entire amount was also allegedly disbursed.

“On loan of Sh100,000,000.00 (balance yet to be disbursed Sh40,000,000.00), Imperial Bank issued undertaking to Kenya Commercial Bank Limited dated September 9, 2015 to pay them Sh60,000,000.00 to the account of Blue Nile East Africa Limited upon completion of securitisation land reference 3824/1129.

Amount is to be paid seven days upon registration of the security,” the documents read.