Equity Bank to lose millions in PCEA scandal

Equity Bank to lose millions in PCEA scandal


Equity bank CEO DR. James Mwangi

A vicious corporate war between Equity Bank and the Presbyterian Church of East Africa is brewing over a criminal case pitting the church’s leadership against former moderator David Gathanju and two others.
Equity Bank is associated with tycoon James Mwangi well known for alleged money laundering.
Gathanju who was the highest-ranking official of the church’s general assembly (moderator) between 2009 and 2015 is charged alongside James Muiruri a former finance officer at the church and Peter Kamuthu the former PCEA communication director.
The three were in November 2017 charged that on diverse dates between January 2 2016 and June 30 2017, at PCEA headquarters in Nairobi’s South C Estate, they conspired to steal from the church.
In the second count, they were accused of stealing the money which came into their possession by virtue of their employment. They denied the charges and were released on a Sh3 million bond or cash bail of Sh1 million each.
PCEA secretary general of the General Assembly Rev Peter Kania, his deputy Mugendi Kanga and treasurer Amon Nderi accused the trio of stealing money from the church by forging their signatures to transfer funds from church accounts.
The accounts in question include Paye 1280299474033, MMF 0170293300452, investments 1280265622149, and disaster 0180297935327, all at Equity Bank.
Since forgery of cheques claims touch on banks, then operations manager for Nairobi West Equity branch where the accounts are, Chebet Rotich, recorded a statement on December 8 2017 at the DCI headquarters a whole two months after the accused took plea on October 18 2017.
The delay in her recording a statement on the matter raised questions into how the DCI and Office of Director of Public Prosecutions officials had the suspects taking plea before they conducted basic investigations.
The DCI only recorded statements from witnesses when the case had already commenced without even bothering to substantiate the claims which, according to legal experts, are highly unethical and criminal.
The case’s hearing is set for March 26 to 28 after failing to take off on August 7-9 last year, due to what prosecutor Christine Mbevi described as a review of the case by DPP.
The prosecution continued to use this excuse until senior principal magistrate Stella Atambo, who is hearing the matter, church and defence lawyers complained, prompting the court to set the new dates amid warning the case proceeds without fail.
The church through lawyer Gibson Kamau Kuria, prosecution and defence lawyers said they were ready to proceed. The case has stagnated for the last 18 months.
However, as things stand, the church seems to be reading from a different script with Kuria. Senior church officials are busy intimidating other witnesses not to obey court summons to tender evidence.
However sources at the church indicate Equity Bank has refused to yield to these threats, insisting non-appearance would cause severe negative publicity on its part.
It should be noted that Chebet had recorded in her statement that before any transaction took place, she would call Rev Kania, or in his absence Nderi, to authorise the transactions.

PCEA secretary general of the
General Assembly Rev Kania.

She went ahead and gave call logs of the communication with the church officials. Her statement contradicts the well-choreographed narrative of forgery claims.
DCI document examiner CI Alex Mwongera Mathiu, under supervision of Michira Ndege, in his report on December 11 2017 (Doc. CID/ORG/8/3/1/1148), indicated that signatures for Kania, Kanga, Nderi, Njane, and Esther Wanjiku had been forged, and those of Gathanju and Kamuthu were genuine.
This therefore simply pits the church and state against the bank on forgery claims. With the bank and church officials at loggerheads, the latter resorted to sabotage and intimidation in a desperate move seen as trying to force the bank to play ball as far as the case is concerned.
In a communique to all presbyteries on October 31 2018, Rev Kania informed the church that the head office was in the process of “restructuring and downsizing operations”, thus had closed some Equity accounts and replaced them with KCB accounts.
Sources at the church however say there was no any downsizing but basically a replacement of Equity with KCB for refusing to play ball in the case.
Some of the closed accounts included head opffice, account number 0170293300452; Investments (1280265622149); Paye (1280299474033); insurance (0470296395999) and Presbytery University of Eastern Africa (1280264350532).
All the closed accounts are part of the Gathanju case, implying the officials have been busy on a coverup mission.
Disaster, foundation and welfare accounts were closed soon after the Gathanju case began in 2017.
Reports from the church also indicate the officials have further instructed clergy to have all employee, congregation and groups’ accounts that are in Equity, transferred to KCB preferably by end of March; the reason being given for the transfer being to enhance bargaining power to borrow from KCB – some sort of guarantee.
How can employee, including clergy accounts, be used as collateral? Officials are silent on accounts in other banks.
Currently, PCEA has over 4,000 congregations. Each congregation has groups, including women’s guild, PCMF, church school, which, in addition to the congregation account, also operates theirs.
This means each congregation has over seven accounts. Further, parish and presbytery levels operate accounts.
This adds to minimum 30,000 accounts, without including institutions such as schools sponsored by the church and employees.
At least half of these are Equity accounts due to accessibility, meaning over 15,000. With only an average Sh1,000 transaction fee for an account per month, this translates to a minimum of Sh15 million monthly, and Sh180 million annually.
This is the distance church officials are willing to go, seeking to undermine other institutions for self-preservation, while using the church as a shield.
But what worries officials the most is the fact that it will be impossible to proceed with the case without church auditor Maina Kinyua who is also a witness in the case tabling 2016/17 audited accounts to show how the church accounted for the stolen money.
The accounts were rejected by the church’s general assembly in April 2018. These accounts, which are public documents on church website, are a complete fabrication, casting aspersion on how 2017/18 accounts have been prepared without the foundation that is 2016/17 accounts.