NCBA Bank has contested the decision by the Director of Public Prosecutions (DPP) Renson Ingonga to prosecute its CEO, John Gachora, over claims linked to a Sh363.3 million fraud at First Assurance Investment Ltd.

The bank and Mr Gachora argue that the charges stem from a misinterpretation of the Proceeds of Crime and Anti-Money Laundering Act (POCAMLA) and its regulations. NCBA contends that the law does not impose personal criminal liability on a CEO for alleged regulatory lapses by the bank.

According to court documents, the prosecution wrongly assumes Mr Gachora’s criminal responsibility solely based on his position, without demonstrating any personal involvement, knowledge, or intent.

The High Court has temporarily halted the prosecution against Mr Gachora, with the case set for further directions on August 27.

Similar Cases Against Other Bank CEOs

Mr Gachora is among three CEOs facing prosecution over failure to report suspicious transactions related to the First Assurance fraud. KCB Bank CEO Paul Russo and Co-operative Bank CEO Gideon Muriuki have also secured court injunctions suspending their prosecutions.

NCBA's Compliance Measures

NCBA highlights that under POCAMLA, the duty to report suspicious transactions lies with the bank’s designated Money Laundering Reporting Officer, not the CEO personally. The bank asserts it fulfilled its legal obligations via established compliance frameworks and appointed officers.

Details provided by NCBA show adherence to banking and anti-money laundering protocols in handling First Assurance’s account, including:

  • Conducting Know Your Customer (KYC) and enhanced due diligence before approving changes in account signatories.
  • Identifying politically exposed persons and obtaining necessary internal approvals.
  • Processing transactions and cheque payments in line with account mandates and internal policies.
  • Rejecting cheques that did not meet signature requirements.

Background of the Fraud Case

The fraud allegations involve Mr Salim Mohamed Busaidy, a former director and signatory at First Assurance, accused of stealing Sh363.3 million by forging signatures of co-director and Lamu Governor Issa Abdalla Issa Timamy on cheques across NCBA, KCB, and Co-operative Bank accounts.

Mr Busaidy denies 120 charges including conspiracy to defraud and acquiring proceeds of crime. He was released on bail, and his trial is currently suspended.