The late Imperial Bank boss and his clients were the masterminds behind the theft of Sh34 billion of depositors’ funds.
Documents filed by Imperial Bank in court show that the former group MD, Abdulmalek Janmohamed who collapsed and died after the ‘inside job’ was exposed, initiated a scheme together with WE Tilley (Muthaiga) Ltd, whose accounts were used to siphon the money via its various subsidiaries from 2002 to 215.
The startling and mind-boggling details are contained in court documents filed by Imperial Bank directors and shareholders in a case in which they have sued WE Tilley and 19 other entities and individuals for the loss of Sh34 billion.
The bank adds that the defendants conspired with Janmohamed and other senior bank employees to fraudulently credit their accounts with various amounts, which they had neither deposited nor applied for as loan or credit.
“These amounts that varied from Sh10 million to Sh100 million weekly passed through the WE Tilley (Muthaiga) Ltd account, from which the money was transferred to other accounts of the defendants,” it adds.
The bank reveals that the defendants were allowed to operate transaction accounts, which allowed them access to funds which would then be transferred to other “Special Loan Account” for purposes of hiding the sums which they had embezzled from the bank.
Janmohamed also helped the defendants to create other fictitious accounts used to procure false overdrafts, which were then concealed and removed through various accounts.
It explains that the defendants were also allowed to have non-existent fraudulent accounts which served as conduits for effecting fraud at Imperial Bank.
WE Tilley (Muthaiga) Ltd has been sued alongside and its subsidiaries and individuals, including Zulfikar Haiderali Jessa, Nasir Haiderali Jessa, Nargis Jessa, Nadir Azizali Jessa, Firoz Jessa, Irfan Shamshuddin Jessa and Nashiv Haiderali Jessa, who are all members of the Jessa family.
And as part of the scheme to further conceal the fraudulent activities at Imperial Bank, Janmohamed and other senior management staffers created a fictitious account in the name of Hanscombe Management Ltd, a company that went into liquidation in 2002 and was gazetted the same year and which they used to divert more than Sh30 billion from Imperial Bank.
“That notwithstanding, an account was retained by the bank in its name and entries amounting to Sh30,310,517,186.25 made in the said account to conceal the fraudulent and illegal transactions carried out by the deceased (Janmohamed) and senior officers of the bank and their associates who include the defendants,” court documents reveal.
The bank further reveals that as at September 30, 2015, well after Janmohamed had died and Imperial Bank was under the leadership of a new managing director namely, Naeem Shah, entries of more than Sh3 billion were passed through the Hanscombe Management Ltd account.
Janmohamed and his accomplices deployed a computer software reporting programme which ensured that the fictitious accounts created in the form of Overdrawn Special Account and Special Loan Accounts, were never reflected in the financial statements of the bank.
“In summary therefore, deposits that were made by the bank’s customers and which were supposed to be yielding a return or income for the bank, were instead being fraudulently transferred to WE Tilley’s accounts on instructions of the deceased (Janmohamed) with collusion of other senior officials of the bank and the defendants and their associates,” the bank states.
WETilley (Muthaiga) Ltd had a US dollar account at Imperial Bank, which they used to convert foreign exchange into shillings.
Investigations also revealed that Janmohamed, from time to time, issued handwritten instructions to senior management staff to permit withdrawal by the defendants of up to Sh100 million per week, not the lack of sufficient funds in their accounts notwithstanding.
“The principal amount would be transferred to a series of fictitious and illegal accounts dubbed The Special Loan Accounts, where they domiciled and not reflected in the bank’s financial statement,” the bank adds.
It notes that there were approximately 25 special loan accounts at Imperial Bank, ranging from Sh25 million to Sh1.5 billion.
“The total amount in the special loan accounts was in excess of Sh18 billion. The said amount could only be extracted in the system known as Flexcube and not on the bank’s financial statements,” the bank further states.
Investigations indicate that interest was then accumulated in the overdrawn special accounts and part of it paid to another alleged fictitious account in the name of Zulfikar Jessa and Zarina Mohamed.