CMA still battling Safaricom refund fraud 6 years later

Money Markets

People queue to collect their refund cheques for the Safaricom IPO at a Co-operative Bank branch in Nairobi. FILE PHOTO | STEPHEN MUDIARI |  NATION MEDIA GROUP

By CHARLES MWANIKI

In Summary

• The heavily oversubscribed Safaricom IPO, which attracted applications worth Sh230 billion against a target of Sh50 billion, left stockbrokers processing huge numbers of refund cheques.
• Limited capacity to handle the refunds opened the way for fraudsters to take advantage of the ensuing confusion. They also colluded with some stockbrokers and bank staff to access and cash stolen cheques.

The Capital Markets Authority (CMA) has republished details of six individuals being sought after warrants were issued in connection with fraud mainly arising from the messy Safaricom IPO refund process of 2008.

The six were first sought in February this year, meaning that authorities have not been able to arrest them and the refund saga is dragging into the seventh year.

The latest public notice, published on the regulator’s website on October 27, names two people – Patricia Wanjiku Mwaura and Abraham Kiprotich Langat – alongside four others labelled unknown as the suspects being sought by police for fraud.

According to charge sheets seen earlier by the Business Daily, Ms Mwaura is alleged to have stolen a refund cheque from Standard Investment Bank (SIB) using the alias Jane Patricia Mwaura in 2008.

Langat, who has three warrants in force issued by the Milimani, Makadara and Kericho law courts, is listed as using the alias Yussuf Agrippa. He faces ten counts of forgery of share deposit forms, which are normally used when immobilising share certificates into electronic form.

“Patricia Wanjiku Mwaura alias Jane Patricia Mwaura… on or about September 3, 2008 at Standard Investment Bank along Kenyatta Avenue… stole a Safaricom refund cheque number 470863 of face value Sh780,000 property of Citi Bank,” read a charge sheet.

The Capital Markets Fraud Investigation Unit’s (CMFU) notice issued in February published the photographs of nine people accused of colluding with bank officials to cash investors’ cheques.

All six in the latest notice were included in the February notice.

CMA had not clarified by the time of going to press whether the other three were arrested in the intervening period or if their cases were discontinued.

The CMFI had then indicated it was also seeking Ronald Asonga Khejeri, alias Evanson Kimemia Nderu, who was accused of stealing a Safaricom refund cheque worth Sh551,000 in 2008 at SIB, in addition to forging an identity card in that name.

Suspects who have been listed as unknown are said to have used fake identification documents while carrying out fraud, with their warrants issued between June and October last year at the Milimani Law Courts.

The heavily oversubscribed Safaricom IPO, which attracted applications worth Sh230 billion against a target of Sh50 billion, left stockbrokers processing a huge number of refund cheques.

About 800,000 investors applied for the 10 billion Safaricom shares on sale during the IPO.

Limited capacity to handle the refunds opened the way for fraudsters to take advantage of the ensuing confusion. They also colluded with some stockbrokers and bank staff to access and cash stolen cheques.

READ: Regulators appoint team to handle Safaricom IPO refunds