Paramount Bank marred in Sh30 million loan fraud

Paramount Bank marred in Sh30 million loan fraud

- in Investigations, News

Struggling Paramount Bank is entangled in a Sh30million loan fraud which was obtained using forged title of two acres public land, an investigations report by the Directorate of Criminal Investigations has revealed.

A forensic investigations report say John Peter Kamau Ruhangi obtained the said money in 2011 from Paramount Bank Westland Branch. The investigators further concluded the bank did not detect the glaring discrepancies of a forged title of public land LR No27/326 even after conducting due diligence of the documentation presented of a public land as loan security.

The monies were account wired to account number 002040080 at Paramount Bank, Westlands branch. According to the probe report, the bank did not report the matter, rather, an individual claimant of the same public land, George Jonathan Maara reported the matter to CID in 2013 accusing Ruhangi forged his signature and that of his counterpart David Mburu Githere to acquire the loan.

Investigations revealed that the trio, Ruhangi, Maara and Githere claimed joint ownership of the said land, which is a public utility parcel. Paramount Bank unsuccessfully tried to auction the public property through Integra Auctioneering (K) Ltd upon default to repay the loan pointing to a possible collusion between bank senior managers and the toxic loan beneficiaries.

According to CID report, Ruhangi further faked an affidavit purportedly from a lawyer to facilitate the transaction. “A government document like a deed plan cannot bare anybody’s name.” A senior officer intimated. The land in question belongs to Nairobi City County and was leased out to Wanderjoy Party World Limited in 2008 for a 25 years lease.

At one point, Ruhangi through a letter in possession of investigators purportedly transferred the said land to himself and at the same time claimed to have surrendered it for construction of public primary school.

The forged deed plan bore his name. Documents show Wanderjoy was awarded a Temporary Occupation License (TOL) of the two acres of land block 27/326 by the defunct Nairobi City County in 2011 for a leasehold of 25 years. Through a resolution by General Purpose Committee meeting held on April 14, 2011 by the defunct Nairobi City Council, Wanderjoy was issued with a lease on LR No. 27/326.

The committee was chaired by the then chairman Simba Arati, currently Dagoretti North Member of Parliament. Wanderjoy rehabilitated the said land from being a swamp in a period of four years.

“In view of the fact that you have been occupying the above space for the last 4 years; having rehabilitated it by way of draining the swamp and marsh, evacuating and cutting away of black cotton soils, backfilling in porous hardcore stones and red volcaning soils, landscaping and planting exotic trees, flowering plants and shrubs; your request has been granted.” A regularisation of occupation correspondence dated September 7, 2011 by City hall Chief Valuer to Wanderjoy read in part.

However, the lease had a four point conditions indicating that the lease of 25 years takes effect from January 1, 2008; the garden to be used for recreational purposes, wedding, and conferences.

He was also required to pay sh38000 annual rent paid consistently since 2008 according to records and to only construct car sheds for the purposes of shielding vehicles from harsh weather conditions using only approvable materials.

Wanderjoy proprietor Maina Wandere owns adjacent two and a half acres where his damaged installation partially occupies. The land in question is not developed and is only used as a parking lot.

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