In a report shared by MOE on X, shocking details have emerged about a massive fraud at Equity Bank, where an insider illegally transferred Sh386.5 million to eight companies in just one month.
The case, which was exposed in court, has raised serious concerns about Equity Bank’s internal security and accountability. The rogue employee, who has since been dismissed, managed to move the funds between May 17 and June 14, 2024, without being detected in time.
This raises questions about whether the bank has proper safeguards in place or if such fraud is common but only exposed when it gets out of hand.
Equity Bank reported the fraud to the Banking Fraud Investigation Unit under the DCI, but this seems like an attempt to save face rather than a genuine effort to prevent such incidents.
The money was funneled into accounts belonging to Ubahashi Traders Ltd, Calabash Adventures Ltd, Jahnur Investment, Kariye Investment, Flowerish International, Kariye Salah Ali, Hotho Investments, and Sasa Pay Trust. Ubahashi Traders Ltd received the largest amount, Sh207.7 million, while other companies received millions as well.
The amounts involved suggest a well-coordinated scheme that could not have happened without serious internal weaknesses or even possible collusion by other bank officials.
The companies that received the money claimed in court that they were approached by Geoffrey Kiragu, who presented himself as a property investor seeking to convert money into USD. They argued that they were merely intermediaries, unaware that the money was stolen.
However, the court ruled in favor of Equity Bank, citing the doctrine of tracing, which allowed the bank to recover the stolen money from the accounts where it ended up.
This raises another critical question why was Equity Bank so quick to point fingers at others while avoiding responsibility for allowing such a huge fraud to occur in the first place? It is clear that the bank’s internal monitoring systems failed miserably.
The court granted freezing orders on the accounts to prevent further transfers, but the damage was already done. Equity Bank, which aggressively markets itself as a trusted institution, has been exposed as a bank that cannot even protect its own funds from its employees.
If an insider could steal Sh386.5 million without detection for a whole month, what does this say about the safety of customer deposits? How many other cases like this have gone unnoticed?
While Equity Bank now claims to be pursuing full recovery of the money, it cannot escape the fact that it failed in its duty to prevent the fraud in the first place. This case is a clear example of why customers should be cautious when dealing with banks that claim to have tight security measures but still allow such fraud to happen.
Equity Bank’s reputation is now on the spot, and many will be wondering whether their money is truly safe in such an institution.
Add Comment