October 23, 2018

Former Kenyan bank boss to spend second night in custody

The court has on Wednesday (28/06/17) directed that former Chase Bank chairman Mohammed Zarfullah Khan be remanded for a day at Kileleshwa police station pending determination of a bail request.

According to Nairobi magistrate Martha Mutuku, Khan will be detained until Thursday afternoon when it will be decided whether he should be released on bail.

The former Chase Bank boss was charged with conspiring to defraud the bank of Sh1,683,000,000.

He was also charged with several counts of stealing from Chase Bank and one count of failing to comply with provisions of the Proceeds of Crime and Anti-Money Laundering Act.

Khan also faced an alternative charge of failing to report suspicious transactions. He, however, denied all the charges.

Police officers had on Tuesday night arrested and detained him after the Director of Public Prosecutions (DPP) Keriako Tobiko ordered his prosecution in connection to the case.

Mr Tobiko had ordered that he and six other former Chase Bank officials be prosecuted over corruption claims that led to the bank being placed under receivership.

In March, Central Bank of Kenya (CBK) and the Kenya Deposit Insurance Corporation (KDIC) extended the bank’s receivership period by six months to find a new strategic investor.

In a statement, CBK indicated that the formal process of picking the new investor would take six months.

“Following the receipt and evaluation of EOIs, a shortlist of qualifying investors (“Shortlisted Investors”) will be granted access to a comprehensive confidential data room to develop a formal proposal to acquire Chase Bank (Kenya) Limited,” the bank said in a statement.

CBK placed Chase Bank under receivership following liquidity problems in April.

The regulator noted that the bank experienced cash flow difficulties following ‘inaccurate’ social media reports and the stepping aside of two of its directors. The bank was not able to meet its financial obligations on April 6, 2016.

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