How borrower’s friendship with bank teller went horribly wrong
By Patrick Alushula | May 17th 2016
When he walked into a banking hall in 2002, Joel Mwaniki thought he was starting off on a journey to financial freedom. But unknown to him, this event would come to haunt him 13 years later.
Mr Mwaniki, now 64 and a property developer, took several loans from his bank over the years and repaid them successfully.
His relationship with the mid-tier lender was so strong that he left his title deed with the bank so he could easily access credit when needed. The title was for an acre Kamulu valued at Sh17 million.
“My title deed has always been with the bank and I had never had reservations over this. I had established strong ties with the credit manager. I never knew it would prove costly,” said Mwaniki.
But it did. In April 2014, Mwaniki was introduced to Ms Wamaitha, a credit manager who had served the bank at various branches, including in Westlands, Nairobi. She would now be based at Mwaniki’s downtown Nairobi branch.
“She looked like a faithful person. I trusted her with my details,” Mwaniki said.
Ms Wamaitha established a close relationship with Mwaniki as he frequented the banking hall to make deposits and withdrawals.
A few months after their initial meeting, in June, he applied for a Sh7 million loan to construct a house worth Sh10 million. He expected to be done with construction by mid-2015.
As he was waiting for his loan to be approved, Wamaitha made a request. She wanted Mwaniki to help her with another title deed so she could secure a personal loan of Sh1.8 million from her employer.
Mwaniki, relying on the friendship established, decided to help. He says this act of generosity, coupled with his lack of an education, conspired against him.
The two made a verbal agreement, as Mwaniki struggles to read and write. He gave Wamaitha the title deed to his land in Donyo Sabuk-Komarok as collateral, and she got the loan on June 19, 2014.
Things fell apart, however, when this title to the plot, valued at Sh12 million, ended up listed as belonging to Wamaitha.
At the time they were making the agreement, Wamaitha wrote a letter declaring she would take the loan against Mwaniki’s land, but the title would revert to him after a year. This, she told Mwaniki, would be handed to the bank.
Mwaniki appended his signature to this letter.
A few months later, however, Mwaniki would find out a more ominous thing had happened.
Transfer of title
According to him, the credit manager falsified a letter, signed it, backdated it to April 24, 2014, and allegedly sent it to the chairman of the Machakos Lands Board. It had Mwaniki’s simple signature, which is his name.
“... I authorise every transaction as per the attached title deed i.e transfer and change of the same to be executed,” reads the letter.
Mwaniki has distanced himself from this letter, which transfers his title to Wamaitha and is littered with grammatical errors, probably to illustrate his lack of education.
And then there were the issues around his loan.
On December 28, 2014, Wamaitha called him to tell him the Sh7 million was ready. But in a call the following day, Mwaniki says Wamaitha instructed him to wire Sh3.5 million back to the bank as internal auditors would be probing the lender’s loan book.
On inquiring why the audit should come between him and his loan, Wamaitha said the auditors would not be satisfied that his piece of land was valuable enough to secure him a loan of Sh7 million.
Despite his reservations, he went to the banking hall and Wamaitha gave him an account number where he was to deposit the Sh3.5 million.
“Since I started taking loans with my bank, this land has been the security. It’s the bank’s valuers who visited my land in Kamulu and valued it at Sh17 million,” said Mwaniki.
Copies of deposit slips in our possession show Mwaniki transferred Sh3.5 million from his account to another account under the name Quan Systems on December 29, 2014, at 10.26 am.
He says he was promised the money would be returned to him as soon as the audit was over.
By February 2015, no money had been returned to his account, yet interest was accruing on a Sh7 million loan. Repayments on this amount began on January 25, 2015, according to bank records.
In March last year, Mwaniki received another call from Wamaitha instructing him to transfer an additional Sh1 million to the same account. She said the bank was now being scrutinised by auditors from the Central Bank of Kenya.
“She told me the Sh3.5 million I had sent in December was not enough. I asked if I should send the additional cash to the same account, and she said yes as it belonged to the bank,” said Mwaniki.
That phone conversation and the promise that the entire sum, now Sh4.5 million, would be re-deposited in his account in three days prompted him to honour the request the following day.
Promised a refund
Documents with Business Beat show that on March 6, 2015, he deposited Sh1 million into Quan’s account at 2.05 pm.
On March 19, however, he lost patience as no money had been re-deposited into his account and his construction project was running behind. He visited the bank’s headquarters in Nairobi to lodge a complaint.
However, when a bank official inspected the Quan account, it was found to belong not to the bank, but a resident of Kasarani, Nairobi. The account raised red flags, and the bank, with the help of police officers, arrested Wamaitha.
Wamaitha was taken to court that month on charges of stealing Sh4.5 million from the bank. She was freed on a Sh100,000 bond.
Efforts to reach Wamaitha did not bear fruit as her number is no longer in service, and her friends were not willing to speak about her.
Further, in a sworn affidavit, a Judy Nyambaka said she had received a call from Wamaitha who asked that she transfer Sh4.5 million to Mwaniki’s account. Ms Nyambaka says Wamaitha promised to refund the cash the following day, so she transferred it to Mwaniki on March 20, 2015.
But Mwaniki’s relief at receiving his funds was short-lived. The following day, he visited the bank only to be told his account had been frozen. Nyambaka has asked that this be done as she suspected foul play, and that Wamaitha may never refund her the money.
The case went to court under a certificate of urgency. In October last year, the court awarded the Sh4.5 million back to Nyambaka.
This year, Mwaniki’s bank told him to stop making repayments on the entire Sh7 million loan, and instead service Sh2.5 million. The bank said it would seek ways of recovering the Sh4.5 million.
Another pressing concern for Mwaniki is that Wamaitha has defaulted on paying off her Sh1.8 million loan, He fears his land may soon be sold.
One of the bank’s legal officers confirmed to Business Beat that according to the lender, the title deed Wamaitha used to get a loan is in her name. This, therefore, gives the bank the right to sell the land to recover its money.
Mwaniki sees the situation as “hopeless”. He says auctioneers have already written to him communicating their intent to sell the Donyo Sabuk land on June 20.
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