Central Bank of Kenya (CBK) and international monetary and security agencies are investigating African Banking Corporation (ABC) over money laundering allegations.
The agencies are focusing their spotlight on the owners of the bank, who are said to be neck-deep into the vice of money laundering, which happens through the bank.
According to sources, CBK’s ‘secret’ investigation could throw the bank off balance by exposing the rot therein.
The head of the investigation is Gerald Nyaoma, the director of bank supervision department at CBK.
Others digging for the rot in conjunction with Nyaoma include Paul Wanyagi, the director for currency operations, Kennedy Abuga who is the director at the governor’s office, William Nyagaka (director of financial markets and Mwenda Mmarete, the director of banking and payment services.
Rose Detho, Moses Ngotho, Peter Kongondu, Matilda Onyango, Terry Ng’ang’a and Joshua Kimore are also said to be looking into the issue.
In a bid to ensure that very few people know about the rot, in this case the selected to, ABC has ensured that most of its directors are in an acting capacity, hence their powers and privileges are limited.
The first report of the investigation was submitted to the CBK governor on September last year through an internal report.
The report cited issues of ownership of the bank, criminal activities therein.
In the report, the ownership and management of ABC bank were not clearly outlined and separated contrary to the specified CBK rules and regulations. Further, it said that the bank seems to be overly interested at real estate investments in Mombasa and Nairobi. Of particular interest is how the bank acquired about 100-acre piece of plot in Lamu.
The bank is said to have been working closely with top political leaders, the reason it has been difficult to unearth underhand deals in the bank.
The current leadership entails city lawyer Richard Omwela who is the chairman and non-executive directors Ashraf Savani, Joseph Muiruri and Alban Mwenda.
In March this year, the United States government put Kenya on a list of global hotspots for money laundering, citing insufficient controls on the circulation of dirty cash and the lack of laws against terrorism financing.
In a report by United States Department of State Bureau for International Narcotics and Law Enforcement Affairs, “criminal activities include transnational organised crime, cybercrime, corruption, smuggling, trade invoice manipulation, illicit trade in drugs and counterfeit goods, trade in illegal timber and charcoal, and wildlife trafficking.”
It described Kenya’s vibrant financial system as a magnet for money laundering.
“Banks, wire services, and mobile payment and banking systems are increasingly available in Kenya. Nevertheless, unregulated networks of hawaladars and other unlicensed remittance systems facilitate cash-based, unreported transfers that the government cannot track,” it said.
ABC bank has been mentioned severally as one of the platforms through which drug dealers, pirates, and other criminals clean their cash.
According to an email exchange between Kenya and the US, illegal gun dealers like Victor Buot worked closely with individuals and some Kenyan commercial banks companies to launder money as well as buy small arms from the unstable countries like Somalia, South Sudan and Pakistan. In this exchange, ABC is adversely mentioned as key culprit.
A confidential letter from the Scotland Yard to Central Bank and copied to the Banking Fraud Unit in January 2015 says authorities in Kenya need to investigate the “strong appetite” ABC bank has for the housing sector, particularly in Nairobi and the Kenyan coast, Mombasa.