Court issues warrant of arrest against Dubai Bank officials

A Nairobi Magistrate Court has today issued warrants of arrest against five officials of embattled Dubai Bank for alleged involvement in fraud.

Chief Magistrate Daniel Ogembo has issued the warrants against the five facing charges of stealing 12 million shillings from the bank, failing to comply with Anti-Money Laundering Act and money laundering.

The five, including Dubai bank CEO Butt Binay and Operations Manager Dhiraj Kumar, had on 27th September been summoned to appear before court today but failed to show up.

The matter will be mentioned on 2nd December 2015.

This comes just days after Central Bank of Kenya announced that it is considering harsher penalties for commercial banks that flout operational rules and may soon publicize enforcement actions that it will take against errant banks.

According to CBK Governor Dr. Patrick Njoroge,the review of the penalties will be a part of the bank’s plan to strengthen supervision of lenders.

The Central Bank may consider publishing details of penalties against banks that violate laws, only after the fact, in order to avoid a run on any institution facing regulatory actions.

The harsher penalties come barely weeks after fraudulent withdrawals and other illegal transactions at Imperial Bank that amounted to more than 34 billion shillings over a period of 13 years.

This led to the Kenya’s Central Bank to order privately-owned Imperial Bank to be put under management after the board alerted it to malpractices at the mid-sized lender.

More than 20 companies and a number of individuals were linked to the fraudulent activities that began in 2002.