State Seek To Freeze Sh5B From UBA Kenya Linked ToMoney Laundering

United Bank of Africa(UBA) Kenya is in trouble following accusations made by the Assets Recovery Agency that the bank hold Sh5B that they deem was acquired illegally through unethical banking practices, money laundering.

In a Miscellaneous Criminal Application No E015/2022 filed on March 10, the agency had sought from the Milimani Anti-Corruption Court to investigate the bank for the offense of money laundering.

The court issued the orders which now puts the bank in full probe.

By allowing the authority to conduct its investigations, the court wants the bank to restrict for at least 45 days account number 5501030010886 under the name Oit Africa Limited held at the same bank from doing any transactions to allow the investigating officer Issac Nakitare to access and obtain information on that account.

ARA seeks the bank’s corporation to retrieve crucial for the investigations including information on when the account was opened, bank statements since the account was opened, cheques/cash deposits and withdraws and bank RTGS/swifts transfers and other relevant info that would aid the probe.

ARA is also seeking to compel UBA managers to authorise and give the investigating officer electrically produced evidence to be used in court.

The officer said there was compelling ground for the suspicion of the account being used in money laundering.

Nakitare swears in the affidavit that on March 4, 2022, ARA received information that the said bank account had transacted and holding funds suspected to be proceeds of crime and the agency opened an Inquiry file No 14 of 2022 to investigate and inquire into activities in this account for the offences of money laundering leading to proceeds of crime.

The money in question is suspected to be over Sh5B.

The investigating officer also noted in his sworn affidavit that the bank account is being investigated for several other offenses, including money laundering and crime proceeds.

According to the affidavit seen by Kenya Insights, it is necessary to enable him complete the investigations aimed at instituting ARA and Forfeiture Proceedings.

The officer believes his work will help to collate confirmatory evidence regarding the financial flow as of the allegations.

The officer also held fears that the funds held in the flagged account may be withdrawn, transferred, spent or dissipated rendering the application and intended recovery of proceeds of crime nugatory.

UBA Kenya CEO,Chike Isiuwe.

Chike Isiuwe was appointed in August last year appointed the chief executive, replacing Kehinde Omirinde who had been serving as acting CEO of the bank, which began operations in Kenya in 2009. It is a subsidiary of UBA Plc.

Isiuwe joined the UBA-Kenya from UBA Group in Nigeria, where he was the deputy general manager – Corporate Banking Directorate.

The investigations by chain implicates the entire management and detectives will comb through the files of many.

According to a local newspaper, investigations further want to unravel the period the bank has been engaged in clearing billions of shillings in the height of 2022 elections.

The paper further claims that a senior sitting on CBK board with connections to a senior state official who has since fallen out with the high powers, was commanded to cushion the bank from any troubles given his position at CBK.

A Ms Viola Achola who’s in her 20s is reportedly listed as the director of Oit Africa Limited, the firm under probe, she’s claimed to be close to the wife of mentioned CBK board member.

Kenya Insights reached out to the bank on the above mentioned claims but they didn’t comment citing court orders.

KEMSA

Elsewhere, It is not unusual not unusual for the big boys to use proxies in executing their missions. One of the most prominent cases in the recent cases is that of Ms Zubeda Nyamlondo, a proxy director of Aszure Commercial Services a company implicated in a Sh347M scandalous tender to supply facemasks to the Kenya Medical Supplies Authority (Kemsa).

Ms Zubeda Nyamlondo.

Nyamlondo who was casually dressed in a jungle green dress, a red marvin hat and a matching face mask when she appeared before the Public Investment Committee (PIC) took the committee in circles, at times contradicting herself and prompting members of the watchdog to conclude she could be a proxy to some powerful individuals.

Equity Bank

In August last year, Equity Bank found itself in similar circumstances that UBA is in today following claims that they were part of an alleged Sh15B money laundering scheme.

The state’s intelligence had intercepted and arrested a Turkish businessman Harun Aydin from flying out of the country to Uganda where he was to establish a vaccine making plant. According to intelligence at the time, Aydin was supposedly being used by the Deputy President William Ruto to cycle through a money laundering scheme.

The DP didn’t distance himself from his relationship with the flagged businessman.

Speaking during an interview with a local radio station yesterday, Ruto claimed he had helped Aydin to acquire a Sh15 billion loan from Equity Bank to set up a vaccine processing factory in Uganda, which he and three other businessmen alongside his close allies were scheduled to commission on Monday.

“I helped him on one phone call. He said the benefits Ugandans will get are the same that Kenyans will get.”

Many questioned as to how simple it is for Equity to dish out Sh15B as a loan merely from a phone call and to foreigners whose past are questionable.

Claim by Ruto that he secured the loan of such magnitude by simply placing a call has elicited reactions from Kenyans who’ve been victims of banks collapsing in insider, fraudulent loans.

Aydin was deported to Turkey following negotiations between the two states. The controversial businessman had been linked to terror activities before.

Nigeria

A Nigerian court in November last year, had charged regulatory bodies to withdraw the licences of the banks including UBA fir aiding aiding fraud which benefitted from the proceeds of illegal transactions.

Justice Okon Abang of the Federal High Court, Abuja berated The United Bank for Africa, UBA, and Fidelity Bank Plc for aiding fraud, while handing down judgement in a case of N2billion fraud involving a former chairperson of the defunct Pension Reform Task Team, PRTT, Abdulrasheed Maina noted that UBA and Fidelity Bank Plc which were used by Maina as “conduit” to defraud pensioners ought to have been charged alongside Maina. He stated that, “UBA and Fidelity Bank provided the channels with which the convict Mr Maina used in defrauding the federal government.”

The Judge said the banks abdicated their responsibilities by failing to carry out due diligence to establish the true identities of persons in whose names Mr Maina opened and operated the fictitious bank accounts.

In the instance UBA Kenya, did they conduct a due diligence on the flagged account/client? It must be noted that like an ocean, there’s always a ripple effect.

According to an American investigative body, The Sentry, weak financial institutions has made it possible for Kenya to become an epicenter of money laundering. Banks, real estate firms have been singled out. KCB has been on the receiving end for allegedly aiding the money laundering from the bloodshed South Sudan.

Locally, numerous banks have been found guilty of engaging in the illicit activity. However, the Vice has never stopped simply because the banks are treated to a slow motion slap on then wrist with paltry fines that can’t shake a leaf. If CBK grew bigger balls and slapped heavy fines, hold individual rogue managers responsible sending them to jail, and ultimately denying such fraud banks licenses, maybe they’d listen but until then, more money laundering headlines will keep hitting your headlines.

Money laundering, according to authorities, seeks to hide the source of money believed to have been obtained illegally, by passing it through channels including commercial transactions and other forms of investment.

According to the Financial Reporting Centre, such schemes seek to hide and legalise the funds without catching the attention of authorities and also making sure all connections of the funds to criminal activities is removed.

Finally, the “cleansed” money returns to the owner in an indirect way, and is used for legitimate purposes.

According to the United Nations Office on Drugs and Crime (UNODC) about Sh200 trillion is laundered globally every year.