STATEMENT ON LOSS OF KSH 54 MILLION FROM ACCESS BANK AND EQUITY BANK

By Steve Mwangi, Director Steam & Petroleum Ltd

Steam and Petroleum Ltd, a company in which I am a director, entered into a joint venture with Source Logistics in May 2019 to construct an RTG Runway Beam at Embakasi ICD for the Kenya Ports Authority (KPA). The contract price was Kshs.173,374,325.709.

Part of the agreement was that Steam and Petroleum and the Source Logistics would own interests in the joint venture at the ratio of 82.5 percent and 17.5 percent respectively and any profit/losses and liabilities that would arise thereof would be shared in that ratio.

To ensure a smooth-running, both parties agreed that the funds received in connection with the performance of the contract would specifically be deposited in a “Checking Account” which was later opened at Transnational Bank (now Access Bank), Nyerere Avenue Branch Mombasa, as Account No.32876002 in the name of Source Logistic East Africa Limited.

Withdrawals from that account would require the joint signature of both parties and its operations would be separate from any other account owned by either Steam and Petroleum or Source Logistics.

However, parties further executed a special power of attorney dated 22nd January 2020 and it was agreed that the proceeds from the KPA would be deposited in the “Checking Account” Account No.32876002 and the Source and Petroleum’s Director would be the sole signatory for that purpose.

Trouble began when invoices were sent to KPA for Kshs.34,723,935.07 and Kshs.25,000,000/= respectively whose proceeds were to be paid through the “Checking Account” No.32876002 held at the Transnational Bank.

Without its knowledge, the Source Logistics director one Mr. James Daniel Dena while in fraudulent collusion with the employees KPA, caused the invoices in the sum of Kshs.54,723,935.07 to be paid through Account N0.1380265181582 held at the Equity Bank Limited in the name of Source Logistics East Africa Limited which is solely operated by Mr. Dena.

This breached the terms of the joint venture by not paying the monies realized from the KPA contract therein in the agreed “Checking Account” No.32876002 at the Transnational Bank. The aim was to deprive Steam and Petroleum Ltd its rightful dues.

Steam and Petroleum then sought the Court to grant an injunction restraining the Source Logistics from interfering with the said sum of Kshs.54,723,935.07 held in its Equity Bank and further be compelled to transfer the same to the “Checking Account” No.32876002 at Transnational Bank as initially agreed.

The Court gave an order directing the transfer of Kshs.54,723,935.07 held in Account No.1380265181582 in Equity Bank Limited held to Source Logistics East Africa Limited to Account No.32876002 Transnational  Bank, Nyerere Avenue Branch, Mombasa in the name of Source Logistics East Africa Limited.

But only Ksh 27,608,900 was transferred from the Equity Account into the Trans National account. Meanwhile, I had already given 4 RTGS directions which were reversed without my knowledge leading to my arrest as one of the beneficiaries was a car dealer who suspected I had tried to defraud him.

Somehow third parties were able to get a court order to remove the exact amount that was in the Trans National Bank account which is clearly an inside job as only I and the Bank’s management would know the account’s status.

Since then, I have faced financial struggles and my character has been marred due to the RTGS reversals. What is worrying is that despite numerous attempts to contact the management of both banks, nothing has materialized.

Some of the main concerns are:

1. Why did Equity Bank not transfer the whole amount as directed by the Court?

  1. What is the status of the balanced funds?
  2. Why were the 4 RTGS orders given to Access Bank not executed?
  3. Why was I not informed about the new court orders that saw funds in the account to which I am a signatory disappear?
  4. How could third parties know the exact amount that was in the account?

I speak on behalf of Kenyans who are suffering and who will continue to suffer if the rot in the banking system is not fixed.

I urge the Central Bank of Kenya, the Capital Markets Authority and the Directorate of Criminal Investigation to look into this matter urgently. This is the only way we can end impunity and protect customers from fraudulently losing their funds.