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How Koech transferred Kemri funds

BUSIA
By | May 26th 2010

By Wahome Thuku

A bank manager explained how former Kenya Medical Research Institute (Kemri) boss Davy Koech transferred millions of shillings from the State corporation account to a private firm.

Standard Chartered Bank Manager Moses Oduori said two officials disowned their CEO’s claim that they had endorsed the transfer of Sh12.5 million to Koech’s outfit.

Former Kenya Medical Research Institute (Kemri) boss Dr. Davy Koech

Mr Oduori said following the complaint, he checked up and established that more funds had been moved from the Kemri account in Kisumu to African Medical Services Trust (Amset) at the Yaya Centre branch of the same bank. Koech was the chairman and trustee of Amset.

The Kemri boss is facing six charges of fraudulently acquiring the money and abusing his office.

On August 16, 2006, Sh800,000 was transferred from the corporation’s account, another Sh6 million on December 5 and Sh12.5 million on December 13 of the same year.

Exceptional case

On December 13, Koech wrote to Yaya branch manager instructing the bank to transfer the funds. He asked the manager to treat the transaction as "an exceptional case", saying the chequebook was in Kisumu. He said he had contacted the co-signatories John Vulule and Dennis Ali and they would endorse the instructions.

Oduori, then in charge of the Kisumu branch, said Mr Ali had complained the transfer was an error since the account had to be operated by at least two signatories.

"I called Dr Vulule and he told me he had not agreed with Dr Koech on such a transfer," Oduori told Nairobi Principal Magistrate Lucy Nyambura.

Repay Sh12.5m

He said Koech’s letter was mailed to Kisumu, but Vulule refused to endorse the transaction.

Five days later, Koech wrote to the bank in his capacity as Amset chairman, instructing them to repay Sh12.5 million to Kemri. That was when Vulule agreed to sign the previous letter, but the transaction was never effected.

In May the following year, Koech and Ali wrote to the bank confirming that they had requested for the transactions and that they were regular.

Koech later wrote cheques from Amset attempting to refund the money, but they bounced.

Oduori said depending on circumstances and relationship with a customer, a bank manager could make such a transaction from written instructions then have it signed later.

Hearing continues on July 26.

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