By Andrew Kariuki
The ongoing fraud trial involving Chase Bank Kenya Limited has exposed serious failures in internal controls, with court proceedings revealing how multi-million shilling loans were allegedly issued without proper documentation or approval.
Prosecutors told the court that between 2009 and 2016, senior bank officials, working in collaboration with other individuals, orchestrated a scheme to irregularly disburse funds amounting to over Ksh 529 million and USD 1.3 million.
According to the prosecution, the funds were released outside standard banking procedures, bypassing critical safeguards such as loan applications, approval processes and documentation requirements.
The court heard that several companies were central to the alleged scheme, including Kamele Investments Limited, Riverside Muse Limited, and Cleopatra Holdings Limited. These entities are said to have received substantial loan facilities despite lacking formal applications, board approvals or supporting financial records.
A forensic audit conducted following the collapse of Chase Bank is said to have uncovered widespread irregularities within the institution’s lending processes. The audit reportedly confirmed that established banking controls were routinely ignored, allowing unauthorized transactions to be processed and recorded as legitimate loans.
Prosecutors argue that the accused individuals exploited internal system weaknesses to conceal the irregular disbursements, raising concerns over governance, oversight and accountability within the bank during the period under review.
The revelations have painted a picture of systemic lapses in financial controls, with the prosecution maintaining that the alleged scheme involved deliberate circumvention of procedures rather than isolated administrative errors.
The trial is expected to continue as the court examines evidence and testimony relating to the alleged fraudulent transactions.
