Firm allegedly loses Sh100m from its bank account

A construction firm has threatened to sue a financial institution, alleging that it has lost at least Sh100 million from its bank account through suspicious transactions.

The firm, Bowen Contractors, has written to the said bank and copied the Anti-Banking Fraud Unit of the Central Bank, demanding an explanation about the matter, failure to which it moves to court.

In the letters, Bowen's director, Clement Bowen, claims the bank took advantage of their trust and loyalty to carry out questionable transactions without their knowledge.

“I have been the bank’s customer for two decades, and I trusted it. They betrayed me. Looking at the transactions, I feel a betrayal of my trust,” he said.

Among the alleged transactions that raised the company’s eyebrows are numerous unauthorised cashing of several cheques, loans, withdrawals and deposits.

The firm claims that money from its accounts was used to clear a defaulted loan of Sh600,000. It says it learnt that the firm had been listed as a guarantor of the loan without their knowledge.

Another suspicious transaction, according to Bowen Contractors, is a Sh900,000 cheque was allegedly cashed under unclear circumstances.

The firm also alleges that Sh1.5 million and Sh1.2 million were withdrawn from its bank account on diverse dates without any authorisation.

Through Tom Mulei and Company Advocates, Bowen wants the bank to address questions raised or face a legal battle. It says the transaction took place from around 2012.

However, the shocking suspicious activities, including unexplained withdrawals of funds, were unearthed by an audit of the firm's bank transactions mid-last year.

Bowen's suspicions were triggered after Sh10 million was deposited into its account by a known firm, which was then followed by the withdrawal of a huge amount without their knowledge. 

“Our clients requested your investigations to establish who signed at the back of the cheque, left and cashed that cheque, and up to now there has been no response from you,” the construction company, through their lawyer, said in a letter dated March 18.

On January 21, the bank in question acknowledged, through a letter, that it had received an inquiry for answers to alleged irregularities by the construction company.

It said all transactions disputed by Bowen contractors were traceable. The letter signed by a senior official at the bank stated that the cheque was banked procedurally.

“…the investigation has established that the customer’s complaint concerning the disputed cheque no. … (sh900,000) is without merit as the cheque was fully authorised by the customer,” the bank said in its response.

The letter went on to say in part: “… no irregular or unauthorised withdrawals from the customer’s accounts have occurred, as alleged.

“Please be advised that should your client proceed with filing any legal suits against the bank, we shall vigorously defend such actions,” the bank wrote.

When contacted, the company, through Bowen, said should the bank fail to address the complaints, the firm will have no option but to battle it out in court.

Two years ago, a bank was ordered by a court to pay a Kisumu-based company Sh1.2 million for negligence that saw fraudsters divert money from the firm’s accounts.

In March 2023, another lender faced two court cases under accusations of conspiracy to withdraw up to a whopping Sh4 billion belonging to two firms.

A well-known bank was in 2008 linked to a Sh36 million fraud which sparked a vigorous battle in court.