The Central Bank of Kenya has been green-lit by the Court of Appeal to recover Ksh727 million from Jignesh Desai, former bank manager at Giro Commercial bank over the sale and transfer of fraudulent Treasury Bonds.
Court of Appeal dismissed a petition from Desai seeking to bar CBK from collecting the money which was lost in a scheme engineered at his former bank.
Desai was accused of setting up an account for a briefcase company-Mpesha Ltd which was used to siphon and sell fraudulent Treasury Bonds from the CBK.
File image of CBK Governor Patrick Njoroge. |Photo| Courtesy|
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In 2003, proceeds worth Ksh205 million under CBA Capital and Mumbu Holdings were transferred to Mpesha Ltd.
The money was later shared through a series of web transactions.
A three-bench consisting of Justices William Ouko, Aike Makhandia and Patrick Kiage ruled that Desai lacked evidence dissociating him from the scheme.
The court was told that Desai and his associate Alex Ribero Ngugi did not follow the required procedures in setting up the account for Mpesha Ltd. The company lacked a physical address and a Kenya Revenue Authority (KRA) Pin.
The account stayed dormant for a while until six months later when Ksh50,000 was deposited. Later on, Ksh95 million was deposited into the account.
Further, Treasury Bonds worth Ksh30 million were transferred into the account from Mumbu Holdings. After a while, the total amount in the account accrued to Ksh205 million.
The scheme was exposed when Mumbu Holdings set to sell their Bonds only to discover that their stock was short.
Investigations were immediately launched into establishing the proprietors of Mpesha Ltd and led to the arrest of Desai and Ngugi.
In 2019, Justice George Odunga ordered that they pay Ksh727 million which included interest accrued throughout the period the case has dragged in court.
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