Shocking details on how Chase Bank bought its former chairman and his wife gifts worth hundreds of millions have emerged.
According to a plaint against former Chairman Zafrullah Khan and 19 other defendants submitted to the Commercial Court in Milimani yesterday, the old guard at the bank had bought a house worth Sh. 600 million in the prestigious Burj Khalifa area in Dubai for the chairman, and a Sh. 45.5 million vintage Ferrari and Sh. 12.7 limited edition Chevrolet Corvette for his wife.
The bank further paid Sh. 210 million to to AMB Real Estate to build a house for Khan in Michigan, USA, bringing the total expenditure for these luxuries to around Sh. 868 million.
The plaint further states that Sh.7.9 billion of loans and advances to customers were irregularly classified as ‘other assets’ in the Chase balance sheet.
Sh. 1 billion was irregularly advanced to Khan, Sh. 6.9 billion was irregularly advanced to companies largely owned by Khan and Chase Group Managing Director Duncan Kabui, Sh. 8.7 billion in loans and advances to customers, Sh. 3.1 billion of loans not supported by any documentation, and Sh. 5.6 billion in overdue interest on loans and advances.
According to local daily, The Star, it has been revealed that properties worth Sh. 7.5 billion were paid for by Chase but held in the names of various companies owned by Khan and his associates.
“The court documents indicate that Sh. 2,205,642,136 was fraudulently transferred to Khan or companies owned by him and his associates. These included payment of Sh. 48 million to set up Iman Bank in Somalia; Sh. 100 million for Rivieres Finance, his equipment leasing company; Sh. 161 million to Genghis Capital; Sh. 253 million to Orchid Capital for offshore investments; Sh. 83 million for IT investments; and a bonus payment of Sh. 1.05 billion. The bonus payment of Sh1.05 billion was supposed to be paid out to Khan over five years based on performance but was instead collected within six weeks,” the daily reports.
Additionally, after Khan became a non-executive chairman at Chase in 2015, the bank paid him a monthly consultancy fee of Sh. 5 million. In total, he was paid Sh. 76 million in consultancy fees.