Inside Shs65b heist: How bank chief was laid bare

Inside Shs65b heist: How bank chief was laid bare
Kenneth Onyango

Mr Kenneth Onyango, former head of consumer banking, joins seven other suspects – including two former employees of Airtel Uganda – in police custody.

CRIME | After crime comes punishment and it appears that Mr Kenneth Onyango is just about to pay if he indeed soiled his hands in Equity Bank’s Shs65 billion heist.

Mr Onyango, former executive director for Commercial Banking at Equity Bank, was Thursday picked up by detectives who are laying bare a syndicated heist that involves nearly a dozen persons, including those not employed with the bank.

Mr Onyango joins seven other suspects – including two former employees of Airtel Uganda – in police custody.

But the net is only just starting to widen with the latest "big catch" potentially opening the jail-man's cells for more suspects inside and outside the bank.

They are facing fraud-related charges, including money laundering, over the disbursement of Shs66 billion of unsecured loans to unqualified persons.

‘Stocking Financing’ and ‘Agency Float Financing’ products are affected by the investigation.

Stock Financing is a credit product to support entrepreneurs, small and medium-sized enterprises (SMEs), and large businesses across various sectors with working capital for growth and expansion.

Also read: Equity Bank launches investigations into fraud claims

Also read: Police detains two over Equity Bank fraud

Agency float financing is a loan product to support Equi Duuka agents with float to continue running their agency businesses.

The loan is availed into Equi Duuka's transaction account to enable them continue serving their customers who wish to deposit or withdraw money.

Last week, detectives picked up Godfrey Mukwaya and Robert Mugumya, both former employees of telecom giants Airtel Uganda.

They join Equity Agency Banking head Julius Musiime and four other suspects outside the bank who are accused of having had their hands busy in the fraud.

Erina Nabisubi a relationship manager for telecom, Fred Ssemwogerere (banker), Crescent Tumuhimbise (relationship officer) and Wycliff Asiimwe, a distribution and marketing consultant with a microfinance facility, were arrested last month.

Sources say the arrests follow the cooperation of Equity Bank, whose new management led by chief executive James Mwangi, has been scouring and turning in large volumes of paperwork from books of accounts being dug up by auditors.

In early March when news of the scandal first surfaced, Equity Bank acknowledged the potential fraud on their stock loan and agent financing products.

The bank said it held the highest standards of accountability and transparency.

“The person(s) found to be responsible, whether through fraud or errors of commission or omission will be fully addressed by the policies, procedures, and ethical values of the organisation and, where appropriate, the laws of the country,” Equity said in a statement on March 7.

Samuel Kirubi’s five-year stewardship of Equity coincided with the bank’s huge leaps through the financial stairs.

Equity expanded its footprint to its current network of 50 branches, over 9,000 Equi Duuka agents and 58 ATMs spread across the country and serving over two million customers.

However, auditors have unravelled a string of suspicious activities that were taking place during the same period of steady growth.

Kenyan bank guru Kirubi was in November 2022 replaced with Anthony Kituuka as managing director and while he had returned to Nairobi, Mr Mwangi dragged him back into the country to help with the investigations.

Kiruda, with the auditors breathing down his neck, has peeled open layers that revealed that individuals outside the bank like former Airtel staffer Mukwaya used several persons to open bank accounts on which insiders wired billions of shillings.

Mugumya, also a former Airtel employee, created as many as 179 fictitious companies to defraud Equity.

Auditors found out that he used different persons to obtain more than Shs35 billion in stock loans.

At the centre of the heist puzzle has been Mr Onyango, whose role as executive director for Commercial Banking at the time, meant he was one of the managers in position to clear off the stock loans.

Detectives are trying to find out how the dubious transactions were carried out right under Mr Onyango’s nose.

The bank said it cannot give further information at this stage so as not to jeopardise investigation.

However, Nile Post understands Mr Onyango approved some of the loans and his former employers and the detectives are interested in knowing if there was a clear case of collusion with the suspects who created the dubious the dubious firms and bank accounts to pillage Equity.

The bank is adamant that whether by commission or mission, Mr Onyango should answer for his role in the fraud. In prosecution, the bank hopes to recover at least some of the billions of shillings lost through a court order.

In Vietnam, it could be worse for Mr Onyango – as Vietnamese billionaire Truong My Lan found out on Thursday – but if investigations unearth evidence of wrongdoing in causing the financial loss, Mr Onyango could be in the famous UU bus when Luzira Prison relocates in the near future as planned.

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