‪Corporate Fraud Or Gross Negligence Or Both? Trader Loses Sh24M Home To Sidian Bank Over Nonexistent Loan ‬

In a shocking case of alleged corporate fraud and negligence by Sidian Bank, a Nairobi businesswoman has lost her Sh24 million matrimonial home to auctioneers over a Sh11.25 million loan she never borrowed or authorized.

Diana Waithira Ndung’u, now homeless, tearfully recounted her ordeal before Milimani Senior Resident Magistrate Geoffrey Onsarigo, pleading for the court’s intervention to help her recover the home she has lived in since 2009.

Waithira’s nightmare began in September 2018 when she was approached by strangers who handed her a letter from Adept Realtors Limited. The letter stated that the company intended to conduct a valuation of her home. “I was handed a letter which indicated that they intended to do a valuation of my house,” Waithira told the court.

Days later, she received another letter, this time from Nairobi Auctioneers, notifying her that she had 45 days to vacate her home as it was set to be auctioned. It was then that Waithira discovered that a company named Thai Group Kenya Limited had allegedly secured a Sh11.25 million loan from Sidian Bank using her property as collateral. The company had defaulted on the loan, leading to the auction of her home.

Waithira, who was unaware of the loan, confronted her husband, who denied any involvement or knowledge of the transaction. She then approached Sidian Bank for answers. According to her testimony, the bank informed her that Thai Group Kenya Limited had used her home as collateral for the loan but failed to repay it. Shockingly, the bank produced an execution form dated February 3, 2018, bearing her name and a signature purportedly hers, along with a copy of the title deed for the property.

Waithira vehemently denied signing any documents or authorizing the use of her home as collateral. “I never signed any documents, and I was never aware of this loan. How could my home be used to secure a loan without my consent?” she asked the court.

The case has raised serious questions about Sidian Bank’s due diligence processes. How could a financial institution approve a loan using someone else’s property as collateral without verifying the authenticity of the signatures or ensuring the property owner’s consent? Waithira’s plight highlights the devastating consequences of such negligence, leaving her homeless and fighting to reclaim her property.

Her lawyer Abdulahi Khalif has described the case as ‘a  case of corporate fraud and gross negligence’ by Sidian Bank.

Magistrate Onsarigo has taken up the matter, and the court is expected to investigate the authenticity of the documents presented by Sidian Bank. Waithira’s legal team is also pushing for a thorough probe into the bank’s loan approval processes to determine how such a glaring oversight could occur.

As the case unfolds, it serves as a stark reminder to financial institutions to uphold the highest standards of due diligence to protect their customers from fraud and unauthorized transactions. For Waithira, the battle to recover her home continues, as she seeks justice for the loss of her cherished matrimonial home.