Wednesday, April 18, 2012

How Pattni lent Sh430m to NBK



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Businessman Kamlesh Paul Patni. Photo/FILE
Businessman Kamlesh Paul Patni. Photo/FILE 
By PAUL OGEMBA pogemba@ke.nationmedia.com
Posted  Tuesday, April 17  2012 at  22:30
A financial institution linked to businessman Kamlesh Pattni lent the National Bank of Kenya Sh430 million when it was experiencing a cash crisis in 1993, a court heard on Tuesday.
Ms Mary Washuka Ngatia, who was the bank’s senior finance officer, said NBK had not met its mandatory cash ratio.
“I reported to my seniors that even though we had borrowed money to cover the deficit, we still needed Sh430 million. It is then the general manager told me he had arranged with Exchange Bank for a loan,” she said.
She called a dealer at Exchange Bank who referred her to chairman Pattni, who told her he had authorised the transfer.
Ms Ngatia was testifying in a case in which Mr Pattni is charged with former Kenya Commercial Bank general manager Elijah arap Bii and former Finance PS Wilfred Karuga Koinange with conspiracy to defraud the government and illegal payment of Sh5.8 billion to Goldenberg International Limited.
Dr Koinange and Mr Bii face other counts of abuse of office and breach of trust.
Ms Ngatia said it was normal to borrow from other banks to meet financial obligations and that the loan was repaid with interest of Sh706,849.
Another witness told how Mr Koinange instructed the Central Bank to transfer Sh1.8 billion to Kenya Commercial Bank.
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Mr Gerald Maguga said on April 19, 1993 his supervisor, Ms Naomi Munene brought a letter signed by Dr Koinange instructing him to transfer the money from the paymaster general’s account to KCB.
He said this was the first time he had received such an instruction and that in normal transactions, the CBK only prepared cheques to debit in other bank accounts.
A senior superintendent at CBK’s banking division, Mr James Mureika, told the court he could not trace the original documents used in transacting the Sh1.8 billion one month after the money was transferred.
Ms Catherine Gitonga testified that on July 1, 1993, she received another instruction from Ms Munene to transfer Sh2.8 billion to KCB from the paymaster general’s account and a further Sh1.5 billion on July 7, 1993.
She said she prepared the payment vouchers which were signed by Ms Munene, adding that she never saw the original copies of the documents until they were produced in court.
Asked why the money was being transferred to KCB accounts, she said she did not bother to ask because it was normal for commercial banks to borrow from the Central Bank.
The case was adjourned to May 28. (READ: Goldenberg scam case resumes)

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