Former CEO entangles wife in Equatorial fraud dispute

Equatorial Commercial Bank branch in Nairobi. It has frozen the property of its former CEO. FILE 

By GALGALLO FAYO

In Summary

• Peter Harris’ assets, which include four bank accounts in Equatorial Bank holding Sh10.5 million, government bonds worth Sh4.5 million, two cars and residential property in the upmarket Rosslyn Estate in Nairobi, have been frozen.
• Mr Harris says the bank accounts and the government bonds are jointly owned with his wife Josephine Harris, who is said to fully own the cars and the residential property.

Former Equatorial Commercial Bank chief executive has sucked his wife in the battle against the lender over freezing of the manager’s property for advancing a loan to his business associate without board approval.

Peter Harris’ assets, which include four bank accounts in Equatorial Bank holding Sh10.5 million, government bonds worth Sh4.5 million, two cars and residential property in the upmarket Rosslyn Estate in Nairobi, have been frozen.

But Mr Harris says the bank accounts and the government bonds are jointly owned with his wife Josephine Harris, who is said to fully own the cars and the residential property.

“The honourable court in granting the order directly detrimentally impacted a third party who is not involved in an employment dispute,” said Mr Harris in court documents.

“The order has the effect of unlawfully and illegally depriving the respondent and his wife, both whom are retirees, of all means of sustain themselves.”

Industrial Court judge Nduma Nderi last week directed that the former CEO’s assets be frozen pending conclusion of the dispute.

READ: Equatorial Bank freezes former CEO assets on fraud claim

The bank has accused its former chief of lending Sh66 million to a foreigner, Michael Connolly, without collateral.

According to the documents, Mr Connolly died on March 24 and is said to have been a business associate of Mr Harris, who the bank says needed board approval for loans more than Sh20 million.

The court battle has made public the falling out between Mr Harris and businessman Naushad Merali, the majority owner of the bank.

The former chief executive accused Mr Merali in court of allegedly running the bank from his Riverside office in Nairobi with the board having little say in its operations, contrary to Central Bank rules.

READ: Merali accused of governance flaws at Equatorial bank

Mr Harris says he quit the bank for fear of being punished by the regulator, which stresses that a bank’s board must be the top decision-making organ and the one that polices its management.

The former CEO cited the collapse of a sale of a significant stake to strategic investors last year that was approved by the board, only for Mr Merali to overturn the deal.

The bank was looking for investors to inject cash and boost the lender’s capital base and finance its expansion plans.