Central Bank governor Patrick Njoroge. FILE PHOTO | NMG
Bank accounts of companies and suspects stashed with money
believed to have been stolen from the National Youth Service (NYS) have
been frozen for six months.
A Nairobi magistrate’s
court has ordered bank managers to freeze the funds as the State starts
to seize assets acquired through theft of Sh8 billion from the agency.
The
court issued the freezing orders following an application by Asset
Recovery Agency (ARA) investigating officer Frederick Musyoki. Dozens of
senior officials and business people remain in custody and face charges
related to the theft of millions of shillings from the youth agency.
Mr
Musyoki reckoned that the suspects and their associates were set to
withdraw, transfer all the funds in the bank accounts and frustrate the
ongoing investigations for recovery of public money stolen if the freeze
order is not issued.
“I pray for the order to investigate the above accounts to
enable me access information and documents relating to the said accounts
and use for purposes of investigations,” said Musyoki in court
documents.
The ARA said the suspects were paid through accounts held in nearly 10 banks for services and goods not delivered.
Banks mentioned in the ARA suit include top lenders like KCB Group
, Equity Bank , Standard Chartered Bank , Barclays Kenya , and Co-operative Bank
.
Others are Stanbic Kenya , National Bank
, Consolidated Bank, Credit Bank, NIC Bank , I&M Bank
and Guaranty Bank.
Central
Bank governor Patrick Njoroge said earlier an unspecified number of
lenders were under investigation, with the first phase focusing on
tracing the recipients of the funds from the NYS and recovering the
assets.
Dr Njoroge said regulatory guidelines on
handling the proceeds of corruption are clear to all financial
institutions making chief executive officers of those that flouted the
rules personally liable.
The
law requires all financial institutions including banks, insurance
companies and saccos to file with the Financial Reporting Centre (FRC)
daily reports on transactions above Sh1 million and those deemed
suspect.
Bank executives and persons, who are
convicted for handling illicit cash face a Sh1 million fine, and a
three-year jail term, while institutions including banks, credit unions
facilitating such deals could be fined up to Sh20 million upon
conviction. Banks could also lose their licences.
Preliminary
findings in the Sh9 billion fraud claims at the youth agency show that
multiple payments running into tens of millions of shillings were
authorised from the Integrated Financial Management Information System
to the involved companies’ accounts at intervals, releasing the whole
amount in less than an hour after it was asked for.
This raises the red flag on whether commercial banks involved reported any suspicious transactions to the CBK.
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