Imperial Bank directors freed on Sh18m cash bail

Five senior managers of the collapsed Imperial Bank facing a Sh29 billion fraud case have been released on cash bails totalling Sh18 million.

They have also been ordered to deposit their passports in court as additional security.

The presiding magistrate Ms Joyce Gandani directed that three of the suspects pay Sh5 million each with alternative bonds of Sh5 million while two others pay Sh3 million each.

They have denied charges of engaging in organised crime, false accounting and money laundering.

Mr Naeem Shah, Mr James Kaburu, Mr Nashir Jessa, Mr Zulfikar Jessa and Ms Nargis Jessa had contested that bail was a constitutional right while denying the charges.

Their lawyer Ahmednasir Abdullahi had submitted that the charges the suspects face are classified in the law as “misdemeanors and not felonies.”

The bank was placed under receivership in September 2015.

WITNESS STATEMENTS

The suspects are accused of receiving large proportions of funds suspected to have been stolen though a falsified overdraft disbursement scheme.

“In the period between August 30, 2010 and September 15, 2015, the accused acted in concert with others in commission of serious crimes namely stealing, for the purposes of obtaining financial benefits,” the charges read.

Lawyer George Kithi, also appearing, has asked for witness statements in readiness for hearing on July 6 and 7. A mention was set for April 11.

Mr Naeem Ahmed Shah (former acting managing director of the bank) and James Jamlick Kaburu (former acting deputy managing director of the bank) are to pay Sh3 million cash bail while directors Nashir Haiderali Jessa, Zulfikar Haiderali Jessa, and Nargis Aziz Jessa, will pay Sh5 million each.

The accused were allowed to temporarily enjoy their freedom on a police bond until Tuesday.

Mr Victor Mule, senior assistant director of public prosecution had urged the court to issue bond while taking into consideration the fact that the amount of money involved is colossal and that the depositors’ money went under with the bank.

OVERDRAFT SCHEME

It is claimed that the accused, conspired to defraud the bank, now in receivership, and its depositors approximately Sh29 billion through an irregular and illegal overdraft disbursement scheme. The offence took place between January 1, 2006 and September 15, 2015.

The controversial loss of funds at Imperial Bank became public last year, and was aggravated after the death of the bank's long-serving Chief Executive Officer Abdulmalek Janmohammed.

The prosecution said that Mr Shah and Mr Kaburu who previously held the positions of Head of Credit, and Head of Finance respectively, had with intent to defraud the bank, made false entries in the Bankers Books maintained by the Bank in the period between January 1, 2006 and September 15, 2015.

Mr Shah, had temporarily succeeded Mr Janmohammed in an acting capacity, and Mr Kaburu was his deputy.

In a separate case, the receiver managers of the bank have sued Mr Shah, Mr Kaburu, the family of Mr Janmohammed and other individuals and firms, seeking to recover Sh34 billion it claims was lost in the fraudulent scheme.

FREEZE ORDERS

The receiver managers claim the accused either helped Mr Janmohammed or benefited from proceeds of his illicit scheme.

Mr Kaburu, had also filed a separate application seeking to have freeze orders on his bank account lifted.

He said in his court papers that Imperial Bank, whose management was taken over by the Central Bank of Kenya, had obtained orders against him through misinterpretation that he was part of the wider cartel that swindled billions of shillings from the lender leading to its collapse.

He claimed the orders had deprived him of his right to life, freedom and human dignity and should thus be set aside.