PETER GEORGE ODHIAMBOP.O. BOX 2820 - 00200 CITY SQUARE. NAIROBI

EMAIL: odhiambopg@centralbank.go.keTEL:+254 020 2861059CEll: +254723 322887

14th July 2006

Hon. Martha Karua, EGH, MPMinister for Justice and Constitutional AffairsCo-operative House BuildingHaile Sellasie AvenueNairobi

Dear Madam,

RE: CHARTERHOUSE BANK AFFAIR

I refer to the above and to our Tuesday meeting, which was also attended by the Chairman ofthe Kenya National Commission on Human Rights, Mr. Maina Kiai and Mr. Titus MWirigi.

I take this opportunity to thank you very much for the audience you accorded us and to thevery positive concern you had on both the Charterhouse Bank scandal and to my personalsafety.

.J

As advised, the KNCHR has written to the Police Commissioner, Brig. Hussein Ali, seekingexplanations for my last Friday's harassmem by his police officers and demanding a guaranteefrom his office for my personal safety .

I must also confirm that am with you, and all other Kenyans who have demonstrated the will,and by action to set our country free from corruption. Should you therefore require myassistance, in any way, in getting to the bottom of this scandal, kindly feel free to get in touch.

As explained in the meeting, my experience at Charterhouse Bank and as their internal auditorconvinced me that the Bank was not established to carry out legitimate banking business. Inview of this, I became suspicious of over 70% of the total number of accounts maintained bythis Bank. In this regard, I provided KRA, through one of their senior officers by the name ofDoreen the whole database of Charterhouse Bank's accounts totaling over 200. Within thislist, I highlighted 85 accounts, which from my analysis had either not paid tax at all or haddeliberately declared wrong business turnovers in order to pay less tax. This was with theunderstanding that the rest of the accounts be scrutinized for tax evasion. My source from KRAconfirmed to me that they have assessed quite a quite a number of accounts outside the 85that I highlighted, though they have not exhausted the list.

2

KRA then promised to compensate me under their nationally advertised scheme. which states asunder:

Kenya Revenue Authority wishes to draw the public's attention to a scheme that rewardspersons who provide information as below:• Information leading to the identification of hitherto undisclosed taxes _ a reward

amounting to I % of the tax identified up to a maximum of Kshs. 100, 000/=• Information leading to the recovery of hitherto undisclosed taxes - a reward amounting to

3% of the taxes collected.

On 5th

May 2004, they paid me cash Kshs.200. 000/= which they described as a token ofappreciation for providing very useful information with a confirmation that my rightful dueswould follow soon. This was never to be the case. After over one year of several vigorouschasers they paid me by cheque a paltry Kshs. 250,279/20 on 13th June 2005. This paymentwas described as my dues for recoveries made from one of the accounts on the list. Subsequentfollow-ups and visits to KRA have yielded no fruits even after several meetings with their .Chairman. Mr. Mwangola. the Commissioner General Mr. Waweru and the DeputyCommissioner Mr. Nduati

Mheshimiwa, I fail to understand why KRA cannot zero in on these accounts as a matter ofurgency. They have been sitting on a potential tax recovery of over Kshs 20 billion while thecountry is continuously begging for donor funds all over the world. Furthermore the exposureof these criminals will enable other arms of the Government put to an end these malpractices.

I therefore kindly request you to prevail upon the Minister for Finance, Hon. Amos Kimunya toaddress this issue with his officers at KRA.

Enclosed please find copies of the follOWing:

• A list of the suspected 85 accounts of Cha rterhouse Bank• A copy of the KRA payment voucher for Kshs. 200,000/= dated 5th May 2004• A copy of cheque no.022625 for Kshs 250.279/20 in favour of Peter George Odhiambo• Copy of KRA's newspaper advertisement on their information reward scheme

Yours sincerely

/)1, {~'c~ 0~Peter George Odhiambo

CC Mr. Maina Kiai,ChairmanKenya National commission on Human Rights

PRIVATE AND CONFIDENTIAL

No of TurnoverSr.No Account name Alc's (Millions)1 Africa Waste Paper Ltd1 2882 Ahmed Abdullahi Ali1 1653 Alloy Steel & Castings Ltd1 6814 A uto Import Ltd1 1015 Brand Imports3 9666 Caruo Distributors Ltd

·1 4007 Cemoack Limited2 1,0228 Commercial CorPoration (K) Ltd 1 8659 Communication Carrier Ltd1 16610 Compulynx Ltd1 28411 Copy Cat Ltd1 11912 Creative Innovations Ltd4 1,19913 Crescent Constrution Co. Ltd 1 16514 Crucial Properties Ltd-Ksh AlC 1 2,00015 D.Shah1 42316 D.Shah & Mr.R Vithlani1 3617 Dalbit Investments Ltd1 4,00018 Dalbit Petroleum Ltd1 20019 Drive In Tvre Centre1 17920 East African FoUmdry Works IKI Ltd 1 43321 Ehsani 111 Abbas1 15322 Ehsani Hamed & S,R,Shah1 1023 Epsom Holdings Corporation Ltd 1 11524 Farm Tea Packers1 11025 Fones Direct Ltd1 24926 Green Comer Cafe Ltd1 15027 Greenhills Investments Ltd 1 41528 Hotnet Ltd1 15029 Jak Industries Ltd1 20130 Jakharia Packers1 45731 Jamachar (KfLtd1 25432 John Harun Ltd1 16033 Jubilee Tvres Ltd1 15334 K S Brahambhatt & Others ·1 20935 Kariuki Muioua & Co clients 3 58636 Kempaper Ltd1 87037 Kenmosa Holdinos1 11038 Kilimanjaro Carvinos Exports Ltd 1 40039 Kinos Investments Ltd1 740 Klnosway Automart Ltd1 2,10241 Klngsway-Mart Ltd1 24642 King-swa-yMotors (K) Ltd3 76143 Kingsway Properties Ltd1 644 Kingsway Tvre & A utomart Ltd 2 4,44345 Klngsway Tyres Ltd (Piranha Centre 5 1,23846 Kitek (7) Ltd,Kahawa1 12547 Malde Transporters Ltd 1 65248 Manoj R Shah (Lions AIC) 1 9049 Marera Pharmaceuticals Ltd 1 12750 Markfirst (Kenya) Ltd1 11451 Motor Boutioue1 34952 Nairobi Mineral Water Company Ltd 1 30053 Naivasha Matresses1 20154 Naivasha Self Service Stores Ltd 1 62455 Nakumatt Holdinos Ltd 1 28,72356 Nakumatt Investments Ltd 1 70057 Paolo Satta nino1 9258 Pacific Systems Ltd1 19059 Pegrume Limited4 52460 Pepe Ltd1 31061 Petroleum and Industry Services Ltd 1 15062 Phones Direct Ltd 1 15963 Reality TradinCl Company Ltd 1 40064 Roxxon Tradino Company 1 11965 Scorpio Telecomunication Ltd 1 15166 Sevani Brothers & Company Limited 1 35167 Shailesh Pra·acati

1 2,10068 Shawaz Textile Mills Ltd 1 10069 Smeet Shah & Dilpun Shah 1 15770 Sona Industries Ltd1 15271 Spamell Ltd1 11772 SunmattLtd1 37173 Teeve Insurance Brokers Ltd 1 10474 The Copy Cat Ltd1 13675 Trinitron Petroleum Cornpanv Ltd 1 2,00076 Tusker Mattresses Ltd 1 3,71677 Ukay Estates Ltd1 22878 Unizone Investments Ltd1 19879 Vitu Ltd1 50080 Walji Muljj & Co1 20581 W.E.TilleyIMuthaioa)1 5,89082 Wellen International Ltd 1 40083 William K Gitau1 10384 World Shelter Ltd 1 10285 Yaya Phone Link (K) td 1 354

103 78,631

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A "JIICmpl hy the defence tohave rheSh5.S billion Ihch caseJ~J;ns, SIX people suspended

tndefmuetv napped yeslcrdJ)'.This Iol!o •.•."S Nairobi senror principalmagistrate Rosemell ,\1UlokJ's decision10 reject requests 10 exempt the suspectsfrom Jllendine court for mention of thecase. s.Jying II \...·35 her duty to ensurethai [hey appeared in COurt.Some defence lawyers wanted the Court

Pattni bid to halt meiitiori>tf cff§·e1U'. -..•....:! r,-:;1.,~.•.",1"~ ••

I·10 halt the mentions in the ~ (oUor.: : ./to ~etiar~~~. ing a temporary Court o( Appeal oroer ~~j>eaJa~ 0uJ.rldthere';!i~.;'~st<

Slopping the trial, ecs a res ~~,

I The temporary order was obtained by ceed.iitgsagainS:i the Six:businessman Kamlesh Panni. ' fanner spy chiefJames .•..:'vir Panni warns the COurt to temporariJ)' central bank governor En'Slop his prosecution over Goldenberg deputy Eliphai Riun·····pending the hearing o( his appeal. He .permanenlsec:reiary,Wlakes issue with the High Court (ar •.. and former Keni' ..denying him similar orders when he geceril riiiiiif'crEIi}ao.sought refuge in it. pendiJig the detCriiUnaAnd when inecase carne up (or he.a.ring, before the CoU"o[ A .his lawyer. Mr Bernard Ka1o~e. brought ~~~:"~~-':~~0~'

B)' NA nON Correspondent

:,. ::,.. By ~L\.RK AGtiTU The. UdlWlli suppliers Went to court..:~..': :-, :.: and Tl\lOTIn' KAGEMA· .as: week.od gOI temporary orders~~ slC::,ping the sale of their goods currently

:~.; t. The Hig;1 Court yes:e.rday set J51d: a lying .ar Ucburni ouue u across the;:,J • I. case filed by SJppiJ:rs of the collapsea country.

Uchurni superrnarcet cba.n 10 Jlio',I, • .\1eanwhile, former Uchumi 'employ ..:. l.a.ll:.son ItS rev.valro conunue. ees yesterday requested tte Govern-·l~·.. Panics in a disoure Over {he sale 0; ment [0 consider former manJg.Lng circe-

'-;:~~""stock valued at ssi.s billion are hoioLCZ .tors Titus Mugo and Ajay Shah 10 run~~';"~;1A~on the best way forward folJov.U'I£· the revamped supermarker chain.:~~.,~ government. backed revival plans. The two were Ihe only ones capable of~; ..•···~~··Judge HJ,iari Waweru of.lhe Mjl.j~~l turnlcg the superrnarket chain to profit .

.:;:~~. :.Commerclal Courts In NaHOOI .:lbilily.said tl'1e:.fonneremployees,.~~::.::)djourned the case until The workers were reacling to reports.~-~·r·.V{ed.nesd.ay .when. 'he that the Government"":'», J hi D" was; recruiting people fa·~rr.:;·parues WI1 give man. ispute was ali .imp/emeol Uchumi's·,,~~update on the talks,

"i.<ZJ··, .. Also to stay pUI until sale of stock .: revival pian. .~ .. ~"'the:riis an application by Among those who are.:C::Ui.~.supermarkel and its. on the shelves said 10 have been inter.

;.~,~ ~~iver managers ~d viewed for the top Job.,;';- ::;anolher by one leading. include Mr Mugo, Mr~3$:;.~;..~.ditor .;: PTA. Bani: ~, . Shah. formerly opera."'?::;.:.'.-.:::. seeking to have the order stoppmg tions director at Nakumatt supennar-~:'"". the sale of stock set aside, . . keu. former Wananchi Online CEO

' •• : J' The court was; informed 01· the nee ~Jeri Rionge, and Mr Michael Scanlon... -;::::.' development 'by the suppiiers' lawve-, a ionner CEO OJ! ~fater hospital.

~;~"'~'''Mr Nelson Havi, who said it would oe The.workers demanded that fanner:;;;.c':_ prudent to await ihe Outcome of the director Chris Kirubi apologise (or alleg...•.-"_. talks b ..his li . h edly calling them thieves, They also want.:;;: ':'Credito~~~~~ehold~rse~~ t[h: ~~~,~~~ apology from those Who made J decision-·D.··· ~·rneDt. which ..started yesterday and con- to close down Uchumi branches withoutIt:?:"" , " . ~~o;:::::::~m":~::;;:;::;;,"O","

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BRITISH AMERICAN TOBACCO KENYA L1~rr5~~iits: ~~;;;;~~~i

Business 0 ortuni - Distributo~i~'s. ...•. ·--~~');,r<.:All our brands are sold through authorised Distribufurs'WI

geographical exclusivity and Trade Marketing:SlipP9Ifbe1nby the company. As part of our on-going distributJon'Jreorgbusiness opportunities are currently available in·the.friilowmlocations: . . ,,;, }':.~'~,':~~~

Greater Nairobi ';;'.""""~ ;Tala / Kangundo . "

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,J.xi;L.:~·lNF<ORMAi-ION·REWARD SCHEME---,,:::~'":.Kenya·Revenue Authority wishes to draw the public's attention to.::::3':a,scheme th'at rewards persons who provide information asI~J{~~~'?fif'~:-:':: . _'-.

~:;i;~:>;1~f6nnatiori leading to the identification of hitherto.'$.;' i; "3:;.';;', ·i:iiii::lisclo·sedtaxes - a rewa·rdamounting to 1% of the tax~. ' ...":':'\. -, ....•~. ..~. .. .!~:i' t"'::-·· ideritifieid.up to a maximum of Ksh. 100,000.:It •.•• "I, .~ •.-_.'.•....•..- '.,~.. '.' .' '.

i<';.,.': ,~.::<e , Information leading to the recovery of hitherto undisclosed~)~~i;\,'7~~S c;~;re~ard arryotinti!19to.3% of the taxes collected.

:1· ~v.~'~~~;~~t~~~~Ti··;~iSU;~c1';i.,~t~*·:·d~nrideni;aJity to safeguard

I":~.i{~~e~ti.~s·\';'t1i1~ fn.forrriatlon ;:s,~ppHed.ls m.eticulou.sly vetted to. "'~ ~dlscourageJvendetta. One may'Jog onto,www.kra.gO.ke to obtain.~ ~i ~a.ftaiisron !tJEt R~wardSche~e;~~ Call:·(020) 281-7700, (020): :} ~2817800t ·(q?OH~433:42 0Qfax;(020) 3413~2 or email. ::if l~whisUeblower@kra.go.ke. ·or:';tirlmbi@kra.go.ke in complete

:~ confidence. :'~,~, ~;.. .. .., ~~~:~~": •.:~q""-'.i,·~}.·: -..•._.•...;_..:..~~iri't ....:~. .~"'.8e patrfoVc 2..: share knowledge on tax evasion arid eam rewards!.:\ ·.,:;£r~:,;~-:.~~~~:.'::~ .: ~ ., ~~C~:~:~·:

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M4il: .1';~O.;BOX·.(8UO_oo 1oo:;'1;;'Q'Ntii,;.6i,;Phu,: (020) 281-7700{'. f!i0~in£);(020)281-78 OG(H"Ii. i);(020)3PH z,: F~i(020)3 tJ3 42. Em. il;r"~ k,. .:0. x,,r-'~' a..,..r :;- '-Visilourwe~_at~tlp~.krago.ke.

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PRIVATE AND CONFIDENTIAL

Date: 13th April 2006

To: Mr. NduatiInvestigationsKenya Revenue Authority

Re: Reward for disclosure of Information

Refer to our meeting last year at the Commissioner General's office which had beenarranged by the Chairman of KRA Mr.Mwangola.

As you are aware, we handed over to your office the relevant information that hasenabled you to increase your tax collection from the traders who have over the last 5years been evading paying duty. Please note that the list contained over 400 accountholders. .You will concur with us now, that the information we gathered for you has beenfruitful and has also assisted the Central Bank of Kenya in their investigations. We wishto reiterate your remark that it is your policy to reward appropriately those who havehelped you increase taxes by giving such confidential information. Since the matter hasalready been given the greenlight by the Commisioner General during our meeting and atthe same time you confirmed having received the confirmation from your counterpart atKACA Dr. John Mutonyi,we trust that you will kindly make good your promise to rewardus for the work done in helping you to apprehend the tax evaders. We have been patient'for over 2 years now and believe that its time now for you to motivate us so as we mayforward to you new information.Our cry for reward is further enhanced by the fact that the matter is now out of court.

We therefore request you to reward us first and foremost for only the following 10 out ofthe over 400 cases reported to you.

NameBrand ImportsCemparkLtdCreative InnovationsKariuki Muigua & Co.AdvKempapaer LtdKingsway Tyres( & allied groups)Nakumatt HoldingsPegrume LtdShailesh PrajapatiTusker Mattresses

No of Accounts32431132411

Turnover1 billion1billion1.1 billion600 million870 million9 billion30 billion600 million2.1 billion3.7 billion

Looking forward to your response on the matter.

Signed:

,,.

Date: 6do June 2005.

To: The Commlssjon er GeneralKenya Revenue !\uthorit)'Times Towers, Nairobi.

Ref: Reward for information.

I. Mr. Peter George Odhia mbo of P.O.Box 2820-00200 City Square, Nairobi hereby confirm givinginformation with regards to tax evasion of some companies. which are now under your investigations.Some of the 15 out of the over 200 companies with their turnovers for the last 5 years indicated are asbelow:-

J .Brand Imports. 2.Cempark Ltd

3.Creative innovations4.D.Shah5.Fones Direct Ltd6.Kariuki Muigai & Co. Advocates7.Kemraper Ltd8.Kingsway group of companies9.Nakumatt holdingsIO.Shailesh PrajapatiII.Tusker Mattresses12.Yaya Phone Link Ltdl LPeg rurne Ltd14.Kempaper Ltd15.Malde Transporters

I billionI billionI billion500 million249 million600 million870 million9 billion28 billion2 billion.4 billion354 million500 mill inn870 million650 million

The information was obtained by my virtue of ernployrnent. Original documents pertaining to theabove are under your custody. .I trust that the information has been useful to you and has as sisted you to increase the revenues that intum heir to build the country. I believe that once yo u complete your investigations. you will reward me•..,•.ith the full amount per company 3S stipulated hy the act.

In the meantime. I would anpreciate to receive your sum of Kgh5.200.000- (Kshs. Two HundredThousands Only) as discus sed for motivation which shall ultimately be deducted from the finalsettlement amount on cornp lction of your investigations.

It is also my trust that the :li"><'veinformation is treated in strict confidence.

Yours,

Peter (;.Odhiambo l\t'\~:~,QI~::~I987/1Y.Q.~~.~~ .

b·ob.OfDate:

GovernorUANKI

KUU YAKENYA

Ibiic Scl~l,si<: Avenue.1.'.0. !lox 6000G Nairohi KenyaIc lcphonc 226~) 1 Telcx 22324

Hon. David \;w!:',nia:v1inistcr fo:' :::::~;:L-:C8orI re,.sL:r~'l'\i:,irooi

Dear

Charterhouse Bank Lirni te d

Following the meeting between Charterhouse Bank and the Minister for Finance on 20,h

December, 2004 an inspection was conducted on 100' February 2005 to determinewhether the bank had subsequently complied with the provisions of the Banking Act andprudential regul<J.tions.

The following were the findinqs:• Rccornrnended Provisions had been made.• All ClCCO'-1!1tsidentified as ncn-perforrninq were correctly classified.• The bank had rectified the violations of the Banking Act earlier identified.• 1\0511"0 accounts statements previously rnissinq were availed to the inspectors.• 0:' the 223 missing account opening fo rrns , 105 were related to closed accounts

while 70 account opening forms were obtained during the follow-up inspection.• The bank had written to 45 account holders where adequate details had not been

obtained (It t:~e time of opening the accounts. The bank's management had thereforerequested to be given three months to obtain full identification records on theremaining customers.

The Bank was fined l<5h.1,OOO,OOO for violations of sections 10(1) and 50(1)(b) forwhich it is now compliant.

The purpose of this letter is to seek the Minister's approval to issue the bank with theLicence for 2005...-

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ANDRE\\' K, MULLEI

Chd ·terhouse Bark LimitedPWA 79 Account Turnover

Charterhouse Bank Limited t"

Rep Jrt na,Run Date:From

,,: '03/f'1I/04 page:03/08/2004 12:54:54 PM01/01/98 to 03/08/04

1

AccountNumber

AccountDescription

- --------------------------------------~--------------------------------------------------------------------------------------------ClosingBalance

opening Balance DebitAmount

CreditAmount

Turnover---------------------------------------------------------------------------------------------------------------------------------------

BC 01·500000 BANKER'S CHEQUECA 00 001000 CHESTER INSURANCE AGENCIES LTDCA 01-000001 KHIMJI B. SEYANI & OTHERS

QCA 01-000002 M. R. & S. R. SHAHCA 01-000003 MOHSIN HASSANCA 01-000004 HIRJI SEYANI ""i'CA 01-000005 COTTEX MANUFACTURERS LTD ""':CA 01-000006' KAMLESH V SANGHRAJKA ,,,t, p,s-r

oCA 01-000007 KINGS INVESTMENTS LTD.~CA 01-000008 KINGSWAY PROPERTIES LTD(,CA 01-000009 CREATIVE INNOVATIONS LIMITED ~

CA 01-000010 KERBROOK GARMENTS MANUFACTURERSCA 01-000011 NISHIT & CO. LTD

v) CA 01- 000012 f) KINGSWAY TYRE & AUTOMART LTD ./o CA 01-000013 STROBE SYSTEMS LTD 'nf I'VCA 01-000014 HAMECO LTD 1:1' v ,,\ ;':"0" , -, l

CA 01-000015 MANIX LTD.CA 01-000016 NUTTY SAFARISCA 01 000017 CONSOLIDATED ASPHALTS LTDCA 01-000018~ GLOBAL TYRES LTDCA 01-000019 BULK MEDICALS LTDCA 01-00002G' PIONEER PLUMBERS LTDCA 01 000021/ RIVERSIDE VILLAS LTD /CA 01-000022 GREENHILLS INVESTMENTS LTD. (h 'c\CA 01-000023 JAYESH AUTO SPARES LTDCA 01-0000241 ~SEIKO INVESTMENTS LTDCA 01-00n025' ,CIKO INVESTMENT LTDCA 01-000026 ATLANTIC PRODUCTS LTD.

.iX CA 01 000027 "~I' \. ARIAN AGENCIES./ CA 01 000028 NATIONAL INSTITUTE 'BOARD

CA 01 000029 SANDIP GARMENTS___ r~ 01-000030' M/S MEGHJI KANJI & CO. LT8

CA 01-000031 K. N. PATEL & OTHERSCA 01-000032. ARPAN WOOD & EQUIPMENTCA 01-000033 SIGN STOP LIMITEDCA 01-000034' ,T CLEANWAYSCA 01-00003~' SAILEM ENTERPRISESCA 01-000036 RATILAL AUTOMOBILES LTD ' .CA 01-000037 EROS CHEMIST LTDCA 01-000038: RIVERSIDE FITNESS CENTRE LTDCA 01-000039 PRIYESH R SHAH

~CA 01-000040, PEJA LTDCA 01-000041 TROPICAL APPARELS LTDCA 01-000042 SM1BURU DEVELOPERS

c CA 01-000043 JAMACHAR (KENYA) LTD/,':~CA 01-000044 I )WILLIAM K GITAU V'J CA 01-000045 \/'fAMACHAR (K) LTD V

CA 01-000046 MZIGO ENTERPRISES LTDCA 01-000047 CRAFTS SAFARISH LTDCA 01-000048 AUTOMOTIVE & BATTERY MFG.(K) LT(A 01-000049 N H 0 PATEL & OTHERSCA OL-00005~ SEYANI BROTHERS & CO. LIMITEL

2 ,000, 000.00 CR0.00

1,922,578.66 CR9,564,143.74 CR

50,070.55 CR17,053.40 CR

1,018,532.33 CR22,416,585.67 CR

7,046.98 DR7,699.39 CR

48,255,427.32 CR22,299,256.51 CR13,803,372.20 CR

7,470,415.94 CR633,572.55 CR

72,092.14 CR11,514,483.33 CR

3,964,950.08 CR16,537,253.76 CR

515. 546.24 CR19,108.80 CR

8,979,547.93 CR10,842.35 CR

6,225,673.61 CR338.40 DR

375,033.09 CR210,045.79 CR788,508.04 CR45 , 646. 11 CR

0.004,755.45 CR

554.60 CR1,367,125.52 CR

2,064.95 CR192,764.45 CR493,913.75 CR

4,299.55 CR1,047,132.60 CR

5,024.24 CR35,800.00 CR

448,313.23 CR685,965.17 CR

0.000.00

16,854.44 CR75,285.93 DR

17,974,128.59 CR0.000.000.00

1,049,423.88 CR8.405,246.00 CR

11,710,579,474.690.00

35,310,267.11105,996,544.59

310,070.55'42,726,144.0544,708,292.07

167,467,573.237,913,692.567,609,275.88

691,222,239.92169,301,927.21

55,891,444.52,"4,685,940,719.72

48,859,178.8029,851,047.2186,778,001. 4617,916,472.4225,292,635.5314,793,481. 596,497,739.30

111,602,417.2764,456.40

474,296,878.5127,357,797.9020,446,780.2612,670,067.8623,397,582.96

244,223.030.00

1,009,932.9058,582,167.6594,263,713.89

998,219.452,636,726.05

11,954,273.306,862.55

14,136,392.81229,015.64824,125.60

142,811,923.0915,728,001. 72

0.008,038,300.00

58,211,977.75114,589,165.00322,579,874.09

925,623.606,063,700.00

12,966,816.9551,651,481.25

415,682,026.19

11,759,908,848.640.00

34,057,525.4596,714,820.32

279,687.5542,709,090.6542,710,334.04

138,221,094.018,543,903.567,908,889.08

625,575,175.18144,060,420.4547,296,007.02

4,646,250,416.2148,277,773.4530,021,239.1775,609,647.1414,275,803.9416,911,224.1514,281,186.31

6,490,824.15102,607,663.81

53,614.05463,790,563.11

27,377,864.7520,835,430.9212,687,043.5723,335,965.06

199,435.170.00

1,005,177.4558,583,737.9597,656,986.20

996,154.552,478,223.10

, 11,460,359.554,416.55

13,271,485.01223,992.40788,325.60

142,365,328.9615,327,749.52

5,350.358,046,070.00

58,195,123.31123,687,158.43

• 306,185,204.93925,624.40

6,063,700.0012,966,816.9550,714,298.06

'16 ~99,062.72

49,329,373.95 CR0.00

1. 252 ,741. 66 DR9,281,724.27 DR

30,383.00 DR17,053.40 DR

1,997,958.03 DR29,246,479.22 DR

630,211.00 CR299,613.20 CR

65,647,064.74 DR25,241,506.76 DR8,595,437.50 DR

39,690,31)3.51 DR581,405.35 DR170,191.96 CR

11,168,354.32 DR3,640,668.48 DR8,381,411.38 DR

512,295.28 DR6,915.15 DR

8 , 994 .7 53 . 46 DR10,'842.35 DR

10,506,315.40 DR20,066.85 CR

388,650.66 CR16,975.71 CR61,617.90 DR44,787.86 DR

0.004,755.45 DR1,570.30 CR

3,393,272.31 CR2,064.90 DR

158,502.95 DR493;913.75 DR

2,446.00 DR864,907.80 DR

5,023.24 DR35,800.00 DR

446,594.13 DR400,252.20 DR

5,350.35 CR7,770.00 CR

16,854.44 DR9,097,993.43 CR

16,394,669.16 DR0.80 CR0.000.00

937,183.19 DR617,036.53 CR

51,329,373.95 CR0.00

669,837.00 CR282,419.47 CR

19,687.55 CR0.00

979,425.70 DR6,829,893.55 DR

623,164.02 CR307,312.59 CR

17,391,637.42 DR2,942,250.25 DR5,207,934.70 CR

32,219,887.57 DR52,167.20 CR

242,284.10 CR346,129.01 CR324,281.60 CR

8,155,842.38 CR3,250.96 CR

12,193.65 CR15,205.53 DR

0.00 ,4,280,641. 79 DR

19,728.45 CR763,683.75 CR227,021. 50 CR726,890.14 CR

858.25 CR0.000.00

2,124.90 CR4,760,397.83 CR

0.05 CR34,261. 50 CR

0.001,853.55 CR

182,224.80 CR1. 00 CR0.00

1,719.10 CR285,712.97 CR

5,350.35 CR7,770.00 CR

0.009,022,707.50 CR1,579,459.43 CR

0.80 CR0.000.00

112,240.69 CR9,022,282 53 CR

charterr.ouseBank LimitedPWA-79 Account Turnover

Charterhouse Bank LimitedReport f'aRun Date:From

03/08/04 Page:03/08/2004 12:54:54 PM01/01/98 to 03/08/04Account

Number AccountDescript ion

--------------------------------------------------------------------------------------------------------------------------------------------closingBalance

Opening Balance DebitAmount Credit

Amount Turnover--------------------------------------------------------------------------------------------------------------------------------------------CA 01-000051 INTERGUARD SECURITY SERVICES LTCA 01-000052 HANDY HARDWARE LTDCA 01-000053 LEAFSPRING MANUFACTURERS LTDCA 01-000054 ~ SUNCITY EXHIBITIONS LIMITEDCA 01-00005V." SETHIA CREDIT LTD.CA 01-000056 LETAP (K) LTDCA 01-00005Z BAHA'I PUBLISHING AGENCY ,...---- r ,CA 01-000058 MAHESH TAILORCA 01-000059il"f. ESSENTIAL AUTO SPARES LIMITEDCA 01-00006~ MONIER INTRENATIONAL LTDCA 01-000061 SKYPLAST MANUFACTURERS LTD.CA 01-000062 EXOTIC NURSERIESCA 01-000063 rvjl,. LOCHAB TRANSPORTERSCA 01-00006~ BRAND HOUSE LIMITEDCA 01-000065 NELSON J BICHANGACA 01-000066 SPARNELL LTDCA 01-00006~ TRANSAFRICA CARS LIMITEDCA 01-000068'f'" TANYA &-MOHAMMED AZEEM & BHOLACA 01-00006~) ~~GRUME LIMITEDCA 01-000070 '.CEMPACCLTD ,.,/CA 01-00007f,1,~HAMED&MEHRAZ~EHSANI~.CA 01-000072 t' M. R. TAILORCA 01-000073. MARS SAFETY SURGICAL ~

~ CA 01-000074 ~CREATIVE INNOVATIONS LIMITEDCA 01-000075"" JOHN & ANNA NDAMBUKI /' _.,

----:;;> CA 01-000076 AUTO IMPORT LTD ,.'Ill \ -; v /-"...\£Ot,\)CA 01-000077t"~ ALNASIR JIWANICA 01-000078"~ DIVINE ENTERPRISESCA 01-000079 EXXADO PAINTS &ALLIED LIMITED:--~CA01-000080~+,JUBILEE TYRES LTOCA 01-000081 SACHUS LIMITED~/r- ~" CA 01-000082 SUBHASH CHANDRA M GUDKACA 01-000083 MUSSE LEAKEMARIAM rCA 01-000084 ATULKUMAR M SHAH •

Q CA 01-000085& NAKUMATT HOLDINGSCA 01-000086\\\,,~,KIRITKUMAR NATVARIBHAI & ANJANACA 01-000087~ ASK ME ENTERPRISESCA 01-000088 MWANANCHI AUTO PAINTS & WHOLESACA 01-000089 NEWCAL TECHNOLOGIESCA 01-000090 ALBERT K KIMWATAN J'

. CA 01-000091 KARIUKI MUIGUA & CO., CLIENTS A v"/1--- (i::t\ CA 01-000092 SUNMATT LIMITED\~;;CA 01-000093 BID INSURANCE BROKERS LTD

CA 01-000094 UMIT & COMPANY LTDCA 01-000095 DAVID SUNSTRUMCA 01-000096 T. S. & H. S. KALSICA 01-000097~ MITSUBA AGENCIES LTDCA 01-000098' PREMNATH KAPOORCA 01-000099 \)1.,\ M/S BID'S MATCH LTD.CA 01-000100,,' VIJAY K SHAHCA 01-00010T COMMERCIAL & INDUSTRIAL CRED!-

'CA r,'.-000102 TRISTAR BOTTLERS LIMITED

2,169.46 CR1,499,827.70 CR

120.21 CR464.48 CR

0.000.00

2,663.36 CR2,639,339.02 CR

2,830.00 DR0.00

4,454,524.14 CR8,483.69 CR

6,004,293.73 CR219.97 CR465.57 CR

361,226.79 CR608.69 CR

1,198.11 CR21,162,309.88 CR

498,454.06 CR1,025,515.78 CR

54,202.02 CR0.00

1,360,821.51 CR-! 5,287.14 CRc 27,932,717.97 CR0.000.00

1,667,715.87 CR7,337.63 CR

6,779,896.39 CR0.00

304.26 DR0.00

39,175,084.05 CR0.00

.0.00192.85 CR

20,182,285'.00 CR1,450,000.00 CR

603.40 DR47,990,500.35 CR

582,656.12 CR12,490.83 DR

0.00500.00 DR

0.004.47 CR

248.21 CR0.000.00

53,813,093.92 CR

18,624,755.79 18,785,687.9714,213,492.95 14,604,702.5373,~81,313.81 73,614.579.758,530,623.61 8,530,208.13

34,601,122.75 34,601,122.7530,990,755.68 30,992,204.781,167,089.75 1,164,426.39

96,816,066.31 94,352,297.125,253,929.80 5.259,589.80

665,566.10 692,049.0553,76Q,912.82 50,372,102.933,578,573.85 3.571.088.25

22,947,492.43 17,033,241.452,659,863.89 2,688.643.226,416,579.95 6,444.743.29

139,254,007.23 140,926.880.251,736,624.60 1,736,015.91

117,238.36 120,054.32165.773,253.19 145,476,761.81387,867,966.91 393,127.113.64

6,013,640.68 5.002.463.078,993,357.43 8,970.219.57

598,878.00 598,878.00466,089,773.73 458.443,466.75~2,376,113.73 41,738.590.69

158,738,662.99 115.408,027.015.000.00 10,000.00

478,710.00 491.913.006.284,157.47 4,970,614.11

173,117.061.53 174.948,201.0375,425,907.84 67,910.843.8597,052,770.55 97,052,770.552,452,381.24 2,456,412.40

0.00 124.268.3533,380,763,497.14 33,450,419,509.38

14,010,668.00 14.015,678.001,773,122.50 1,773,122.507,279.796.65 7,282,741.01

107,836,537.49 72,286,487.208,296.253.10. 6,849,447.20

1,355,347,599.40,* 1,355,526,082.30492,623,476.15 451.635,215.08

33,115,174.57 32,541,697.4571,540,172.53 71,183,067.41

884,972.35 887,859.7036,794,141.75 36,810.614.80

10,000.00 20,000.007.512.47 52,020.47

24,884.636.01 24,884.387.8017.416.031.05 17,416,031.05

228,779.40 237,377.35116,037,651.67 •••.S2.105.673.31

160,932.18 CR391,209.58 CR33,265.94 CR

415.48 DR0.00

1,449.10 CR2,663.36 DR

2,463,769.19 DR5,660.00 CR

26,482.95 CR3,388.809.89 DR

7.485.60 DR5,914,250.98 DR

28.779.33 CR28,163.34 CR

1.672,873.02 CR608.69 DR

2,815.96 CR20,296,491. 38 DR

5.259,146.73 CR1.011.177.61 DR

23 , 13 7 . 86 DR0.00

7,646, 306.98 DR637,523.04 DR

43,330.635.98 DR5,000.00 CR

13.203.00 CR1,313.543.36 DR1,831.139.50 CR7,515,063.99 DR

0.004,031.16 CR

124.268.35 CR69,656,012.24 CR

5,010.00 CR0.00

2,944.36 CR35,550,050.29 DR1,446,805.90 DR

178,482.90 CR40,988.261. 07 DR

573,477.12 DR357,105.12 DR

2.887.35 CR16,473.05 CR10.000.00 CR44,508.00 CR

248.21 DR0.00

8,597.95 CR53.931,978.36 DR

163,101. 64 CR1,891,037.28 CR

33,386.15 CR49.00 CR

0.001,449.10 CR

0.00175,569.83 CR

2,830 00 CR26,482.95 CR

1,065,714.2'; CR998.09 CR

90,042.75 CR28,999. 30 CR28,628.91 CR

2,034,099.81 CR0.00

4,014.07 CR865.818.50 CR

5,757,600.79 CR14,338.17 CR31,064.16 CR

0.006,285,485.47 DR

632,235.90 DR15,397.918.01 DR

5,000.00 CR13.203.00 CR

354,172.51 CR1.838,477.13 CR

735,167.60 DR0.00

3,726.90 CR124,268.35 CR

108.831.096.29 CR5,010.00 CR

0.003.137.21 CR

15,367,765.29 DR3,194.10 CR

177,879.50 CR7.002,239.28 CR

9,179.00 CR369,595.95 DR

2,887.35 CR15,973.05 CR10,000.00 CR44,512.47 CR

0.000.00

8,597.95 CR118,884.44 DR

~harterhouse Bank LimitedPWA-79 Account Turnover

Charterhouse Bank Limited

~eport oa , . 03/08/04 Page:Run Date: 03/08/2004 12:54:56 PMFrom 01/01/98 to 03/08/04

3

--------------------------------------------------------------------------------------------------------------------------------------------

/III

Account Account Openi ng Balance Debi t credi t ru rnover (1os inqNumber Description Amount Amount Balance---- -- --------------------------~-~-------------------------------------------------------------------------------------------------------CA 01-000103 CHYENI BOOKSHOP 4,624,989.20 CR 63,066,540.19 58,924,314.23 4,142,225.96 DR 482,763.24 CRCA 01-0001041'-"-: DEKA INDUSTRIES 1,868.14 CR 1,675,961.42 1,995,559.28 319,597.86 CR 321,466.00 CR

Q CA 01-000105 . KINGSWAY MOTORS (K) LTD 10,650,087.98 CR 796,682,279.8'8 788,493,080.00 8,189,199.88 DR 2,460,888.10 CRCA 01-0001061

11' AVENUE FLATS 0.00 4,451,601.75 4,452,697.65 1,095.90 CR 1,095.90 CR

CA 01-000107 SUNSHINE SUPERMARKET LTD 42,773.79 CR 17,726,355.96 18,575,148.94 848,792.98 CR 891,566.77 CRCA 01-000108 SUNSHINE FASHIONS LTD 669.40 DR '21,856,742.47 21,865,462.57 8,720.10 CR 8,050.70 CR

•• CA 01-000109 KINGSWAY TYRES LIMITED(Funz; Rd 338,634.03 CR 1,101,543,108.67 1,106,141,614.62 4,598,505.95 CR 4,937,139.98 CRCA 01-000110"\~ KAMAR CONSTRUCTION 211.28 CR 1,363,713.03 1,364,030.75 317.72 CR 529.00 CRCA 01-000111 JAKHARIA PACKERS 61,471.04 DR 495,837,208.06 499,414,317.60 3,577,109.54 CR 3,515,638.50 CRCA 01-000112 JAK INDUSTRIES LTD 17,984,599.12 CR 238,107,744.16 218,110,867.89 19,996,876.27 DR 2,012,277.15 DRCA 01-000113 \ S.A. PEGRUME & CO. LTD 129.55 CR 3,488,966.66 3,529,015.11 40,048.45 CR 40,178.00 CRCA 01-0001141 ~ l\ AMCO CAR HIRE LTD 0.00 61,666.00 61,666.00 0.00 0.00CA 01-000115J ARDEY PROPERTIES LIMITED 0.00 1,900.00 1,900.00 0.00 0.00CA 01-000116 AFRICON SALES LTD 14,548.90 CR 25,818,462.97 26,510,033.70 691,570.73 CR 706,119.63 CRCA 01-000117 MARERO PHARMACEUTICALS LTD 3,805,343.60 CR 138,103,382.65 135,147,599.37 2,955,783.28 DR 849,560.32 CRCA 01-000118",r

lAMRUIT TRADERS KENYA LTD 0.00 3,765,450.60 3,765,553.40 102.80 CR 102.80 CR

CA 01-000119 COSMOS AUTO PARTS LTD 0.00 654,492.00 654,492.00 0.00 0.00CA 01-000120 DELUXE FOOD INDUSTRIES LTD 2,151,673.20 CR 51,230,388.02 49,659,192.79 1,571,195.23 DR 580,477.97CA 01-00012Jy(1I INTERNET TRADE SERVICES LTD 1,797.90 CR 4,563,485.93 4,566,388.23 2,902.30 CR 4,700.20CA 01-000122 SWAGS & TAILS 0.00 72,000.00 75,000.80 3,000.80 CR 3,000.80CA 01-000123 MULTI DIMENSIONS LTD. 3.60 DR 4,618,092.80 4,618,540.30 447.50 CR 443.90

.- CA 01-000124"'\(\ GREENHILLS INVESTMENTS LTD. 0.56 DR 12,383,581.04 12,383,596.60 15.56 CR 15.00CA 01-000125 ;1HESTER INSURANCE BROKE~ LTD 0.90 CR 34,841,069.10 34,984,925.65 143,856.55 CR 143,857.45CA 01-000126 VROS PRODUCE LIMITED V 500.00 DR 1,105,587.85 1,118,743.00 13,155.15 CR 12,655.15

t4~ CA 01-000127 . SHELTOWN LIMITED V /' 0.00 9,650,975.85 9,664,131.00 13,155.15 CR 13,155.15CA 01-000128 SPORTS CHAMPIONS LIMITEDV' 0.00 105,587.85" 118,743.00 13,155.15 CR 13,155.15CA 01-000129 MULTI ASSEMBLY,L~lITED V 0.00 r--Z08,175.65! 231,486.05 23,310.40 CR 23,310.40

tJi\(CA 01-000130 VITU LIMITED'/ -/ 6,961.60 CR 497,122,229.30! 499,679,642.74 2,557,413.44 CR 2,564,375.04LCA 01-000131 KUSTRON KENYA LIM.ITED v 0.00 10,939,479.50 I 9,538,915.85 1,400,"?i63.65 DR 1,400,563.65

CA 01-000132 IMWAUCO LIMITED V 0.00 105,587.85--t 118,743.00 13,155.15 CR 13,155.15~\~CA 01-000133 HARUN INTERNATIO)jAL LIMITED'/ 2,250.00 DR l 4,723,148.751 4,560,187.80 162,960.95 DR 165,210.95

CA 01-000134 JOHNCO LIMITED&!'_ 0.00 105, 587.85"! 118,743.00 13,155.15 CR 13,155.15II"CA 01-000135; PEPE LIMITED .,/'/ 9,537.10 CR F309,838,675.30 311,890,681.65 2,052,006.35 CR 2,061,543.45

CA 01-000136, TOM BROWN LTD t/ / 0.00 '-208,175.65 231,486.05 23,310.40 CR 23,310.40CA 01-000137 ( MUSIC MINES LIMITED v: 0.00 t...; 208,175.65 231,486.05 23,310.40 CR 23,310.40

\""rtA 01-00013S H. INTERNATIONAL LTD ~ 0.00 1,234,053.90 1,358,915.85 124,861.95 CR 124,861.95~ leA 01-000139 JOHN HARUN LIMITED V / 3,206,459.06 CR 198,972,408.17 160,431,051.24 38,541,356.93 DR 35,334,897.87

CA 01-000140 WORLD SHELTER LIMITED 0/ / 836,912.31 CR 80,271,387.96-' 102,557,381.23 22,285,993.27 CR 23,122,905.58CA 01-000141 GUNTER & GOLDBERG LTD ~ 0.00 22,648,971.45 22,961,126.60 312,155.15 CR 312,155.15

•..•\~C_A 01-000142 ·' .. JOHN HARUN v 0.00 6,961,358.85 7,739,591.00 778,232.15 CR 778,232.15\J CA 01-000143 NAKUMATT INVESTMENTS LTD 0.00 628,298,366.40 628,698,973.40 400,607.00 CR 400,607.00

CA 01-000144 AUTO PERFORMANCE LTD 309.93 DR 4,811,346.07 4,812,520.05 1,173.98 CR 864.05Q CA 01-000145 KINGSWAY TYRES LTD, MOMBASA BRA 32,144.42 DR 66,752,334.14 68,049,233.21 1,296,899.07 CR 1,264,754.65v CA 01-000146 MANOJ R. SHAH R MOMBASA 0.71 DR 9,467,319.04 9,467,696.75 377.71 CR 377.00

CA 01-000147 TEEVE INSURANCE BROKERS! LTD 185,604.40 CR 109,128,059.05 116,551,188.05 7,423,129.00 CR 7,608,733.40CA 01-000148'\ ~SAILESH PRAJAPATIoo:. ./ 189,989,344.53 CR 2,185,707,947.63 !)(2,014,302,748.03 "'t 171,405,199.60 DR 18,584,144.93CA 01-000149: HARROW PROPERTIES LTD 0.00 4,785,500.00 •• 4,785,500.00 0.00 0.00CA 01-000150i\\\~ NARGIS KAPURI PAN 1,000,756.19 CR 10,879,930.83 10,445,360.95 434,569.88 DR 566,186.31 CRCA 01-0001511 B. S. MOHINDRA & co. (K) LTD 20,181,443.47 CR 66,691,230v08 15,035,431.58 51,655,793.50 DR 31,474,355.03 DRCA 01-00015i'VS'ONA INDUSTRIES LTD 69,234,054.88 CR 235,005,882.07 155,540,447.53 79,465,434.54 DR 10,231,379.66 DRCA 01-000153 BTB INSURANCE AGENCIES LTD 4,399,835.30 CR 9,181,551.40 4,894,066.70 4,287,484.70 DR 112,350.60 CRCA 01-000154t-;l-'\ CHYENI PRINTERS 2,311.66 CR 49':-,18,803.22 ')0,004,098.22 105,295.00 CR 107,606.66 CR

CRCRCRCRCRCRCRCR ..•...CR ....•....

CR --CRxDR ••.CR~.P .DR ~.,.

CR -CRCR ",...CR ..,..CR ,/'DR ;I

CR'CR ..---CR ,.<.

CRCRCRCRCRCR

charterhouse Bank L~mitedPWA 79 Account Turnover

Charterhouse Bank Limited

Report Da.Run Date:From

03/08/04 Page:03/08/2004 12; 54: 58 PM01/01/98 to 03/08/04

4

AccountNumber- ------------------------------------------------------------------------------------------------------------------------------------------Account

Description opening Balance DebitAmount

CreditAmount

Turnover ClosingBalanceCA - 01:0001, S;.•i-~~O;~~-~;~~.~~O_ _.- -.. -,~,~2;':.3-~R·····18:8l8,·,~~:'8_.. _.I,~324:7~;:,0··_ ;86,~8':;'·C:~. _. - ·632:;;,:,-;·C~·-.

-o CA 01-000156 JAMACHAR KENYA (FUCHS OIL) 17,033,805.51 CR 45,165,250.49 28,186,141.84 16,979,108.56 DR 54,696.95 CR'LA 01-000157 MOSES N NGERURO 0.00 E30'486'000.00 f30,496,000.00 10,000.00 CR 10,000.00 CR

CA 01-000158 IBRAHIM WAWERU GACWE 0.00 30,486,000.00 30,496,000.00 10,000.00 CR 10,000.00 CRCA 01-000159 JOHN N MBUGUA 0.00 30,422,000.00 30,426,000.00 4,000.00 CR 4,000.00 CR

r\ \>-. CA 01-000160 NAFTALI L MULENGEKA 0.00 '30,486,000.00 -30,496,000.00 10,000.00 CR 10,000.00 CRe CA 01-000161 K.T.A.M.L. 47,970,117.54 CR 1,448,578,586.44 1,415,154,749.10 33,423,837.34 DR 14,546,280.20 CR

CA 01-000162 SHERIFF NGUGI 0.00 20,277,000.00 20,278,000.00 1,000.00 CR 1,000.00 CRCA 01-000163 DAVID M MURITU 0.00 30,396,000.00 30,406,000.00 10,000.00 CR 10,000.00 CRCA 01-000164 JOHN NJAU S GACWE 915.30 CR 32,282,890.75 32,281,980.75 910.00 DR 5.30 CRCA 01-000165 K.S BRAHAMBHATT & OTHERS 150,251.49 CR 286,419,575.73 287,351,185.34 931,609.61 CR 1,081,861.10 CRCA 01-000166 NYCE PROPERTIES LTD /' 58,777.76 CR 2,302,028.58 3,080,444.82 778,416.24 CR 837,194.00 CRCA 01-000167~ BRAND IMPORTS t/ 205,250,324.27 CR 1,086,858,337.49 908,709,355.16 178,148,982.33 DR 27,101,341.94 CRCA 01-000168 : SPIC N' SPAN LTD 605,412.27 CR 2,557,300.53 2,088,792.96 468,507.57 DR 136,904.70 CR

1 ('CA 01-000169 I UNIVERSAL CHURCH OF GOD 78.57 CR 11,031,734.91 11,031,845.54 110.63 CR 189.20 CR1",,\ CA 01-000170 DILWINDER K KULAR ./ 419,400.00 CR 4,077,067.60 3,657,667.60 419,400.00 DR 0.00

..tA 01-000171 ABBAS EHSANI 111--.0 :~ 30,051,053.98 CR 187,590,937.80 163,109,034.12 24,481,903.68 DR 5,569,150.30 CR•• " ·CA 01-000173 PEEKSKIL, INVESTMENT LTD 287,078.14 CR 64,045,100.03 49,080,067.29 14,965,032.74 DR 14,677,954.60 DR

.•.CA 01-000174 EAST AFRICAN FOUNDRY WORKS(K) L. 23,239,297.96 CR 499,478,298.42 465,006,541.52 34,471,756.90 DR 11,232,458.94 DRCA 01-000176 SHAILEN J VISARIA 398,093.04 CR 8,650,560.85 8,218,316.46 432,244.39 DR 34,151.35 DRCA 01-000177 MAYUR PATEL 0.00 5,186,715.05 5,195,644.10 8,929.05 CR 8,929.05 CRCA 01-000178 CSA SYSTEMS (KENYA) LTD 0.00 28,000.00 28,000.00 0.00 0.00

D CA 01-000179 KINGSWAY MOTORS (K) LTD-SERVICE 26,952.54 CR 141,513,125.30 145,303,192.26 3,790,066.96 CR 3,817,019.50 CRDCA 01-000180 KINGSWAY MOTORS (K) LTD-SPARES 13,484.50 CR 9,352,334.30 9,370,189.50 17,855.20 CR 31,339.70 CR

CA 01-000181 DOBBIN ENTERPRISES 14,777.34 CR 8,442,484.10 8,455,964.25 13,480.15 CR 28,257.49 CRCA 01-000182 I NAIVASHA MATRESSES 12,074,491.68 CR 226,633,693.24 217,944,735.11 8,688,958.13 DR 3,385,533.55 CR

~"l,~cA 01-000183 ~ KARSAN K SEYANI 2,501,559.39 CR 41,884,512.41 39,386,465.02 2,498,047.39 DR 3,512.00 CRCA 01-000184 THE COpy CAT LTD 1,317.73 DR 153,297,246.51 154,339,442.34 1,042,195.83 CR 1,040,878.10 CR

,'\).CA 01-000185 TOURING CARS KENYA LTD 0.00 4,120,000.00 4,120,000.00 0.00 0.00CA 01 000186",~ BRAND IMPORTS(B) v 60,963.07 DR 64,545,200.30 66,345,685.96 1,800,485.66 CR 1,739,522.59 CR

-,CA 01-000187 BESTFAST CARGO (K) LTD 4,745.01 DR 40,541,526.88 40,060,009.25 481,517.63 DR 486,262.64 DR"t'CA 01 000188 KHUSUBOO ENTERPRISES 98.41 CR 1,266,384.61 1,266,286.75 97.86 DR 0.55 CR

CA 01 000189<) DRlVE IN TYRE CENTRE 24,863,130.03 CR 206,429,122.13 182,528,424.17 23,900,697.96 DR 962,432.07 CRCA 01-000190 KINGS CHEMISTS LTD( 590,663.33 CR 22,827,700.46 22,271,415.45 556,285.01 DR 34,378.32 CRCA 01-000191 JITENDRA SHAH I 229,516.11 CR • '4,112-,44L..t~ 3,912,658.95 199,782.95 DR 29,733.16 CR

fl·,tCA 01-000192 LIONS CLUB INTERNATIONAL DISTRI 0.00 3,122,167.00, 3,122,174.60 7.60 CR 7.60 CR

CA 01-000193 PARMEX LTD 31,940.79 DR 22,669,539.89 \22,787,190,98 117,651.09 CR 85,710.30 CR,1\l\CA 01-000194 MARITECH ENTERPRISES LTD 34,524.00 CR 5,975,961.00 5,941,437.00 34,524.00 DR 0.00

CA 01-000195 J & S SOLANKI '\ ~ 26.00 DR 1,277,365.00 1,455,040.00 177,675.00 CR 177,649.00 CRCA 01-000196 CONTINENTAL BOARD OF COUSELLORS \\~L 41,433.61 CR 4,114,457.76 4,173,866.03 59,408.27 CR 100,841.88 CRCA 01-000198 SHUKRI BARAMADI 500.00 DR 1,262,237.70 1,295,493.05 33,255.35 CR 32,755.35 CRCA 01-000199 F. W NGATIA 706.80 DR 16,222,329.15 16,594,972,15 372,643.00 CR 371,936.20 CRCA 01-000200 AMEE PROPERTIES LTD 6,995.80 DR 26,524,339.60 26,493,566.10 30,773.50 DR 37,769.30 DR

l~·CA 01-000201 HASHIM KHIDIR MOHAMED & ABDI MU 0.00 821,625.00 821,625.00 0.00 0.00CA 01-000202 ··' ....COMPULYNX LTD 10,117,319.02 CR 309,911,049.49 299,661,629.25 10,249,420.24 DR 132,101.22 DR

I,.CA 01-000203 MOTOR LINE SPARES 0.00 306,000.00 306,463.50 463.50 CR 463.50 CR~ CA 01-000204 SIR ENTERPRISES LTD 48,048,019.70 CR 128,057,671.25 81,351,226.85 46,706,444.40 DR 1,341,575.30 CR

IIi' CA 01-000205 SWALEH IBRAHIM KAMAU -./' 0.00 23,000.00 27,000.00 4,000.00 CR 4,000.00 CRI 0 CA 01-000206 CREATIVE INNOVATIONS (FUCHS OIL(/' 20.714.39 CR 124,749,562.35 128,559,455.45 3,809,893.10 CR 3,830,607.49 CR.' ._-.-, CA 01-000207 PACIFIC SYSTEMS LTD 48,021,408.99 CR 253,762,876.97 189,557,680.07 64,205,196.90 DR 16.183,787.91 DR

CA 01-000208 ADIL LAKHANI & MINAZ JAVER LA"'l 3,497,818.70 CR 10,031,199.75 ,6,533,758.66 3,497,441.09 DR 377.61 CR'CA 01-000209 ITEL STATIOt-'-:RS 13,125.85 CR 10,670,279.90 -,...•./.0.680,637.35 10,357.45 CR 23.483.30 CR

I'/"1

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'Charterhouse Bank LimitedPWA-79 Account Turnover

Charterhouse Bank LimitedReport DaRun Date:From

03/08/04 page:03/08/2004 12:54:58 PM01/01/98 to 03/08/04

5

AccountNumber Account

Description------------------------------------------------~-------------------------------------------------------------------------------------------

closingBalance

Opening Balance DebitAmount Credit

Amount Turnover-------------------------------------------------------------------------------------------------------------------------------------------CA 01-000210),.p\ROXXON TRADING COMPANY

CA 01-000211 MAKAL CONTRACTORSCA 01-000212 MARA TRADING LIMITEDCA 01-000213~~ ~AMAAL TYRES & ACCESSORIESCA 01-000214 \;'KEMPAPER LTD (CA 01-000215 MALDE TRANSPORTERS LTDCA 01-000216 AFRICA WASTE PAPER LTDCA 01-000217 KENYA, COSMETICS INDUSTRY LTDCA 01-000218 ESQUIRE TYRE SALES LIMITEDCA 01-000219 PAMPAS PARK HOTEL

'CA 01-000220 "\~ ATYANA LYNKS LIMITED. /<.CA 01-000221 WAUl MUUI & CO "o CA 01-000222 UKAY ESTATES LTD

CA 01-00022~ MUINANI ENTERPRISES LTDCA 01-000224 ~r~FARMHOUSE PRODUCTS LIMITEDCA 01-00022 OWEN GITAUCA 01-000226 PETROLEUM & IND. SERVICES LTD.CA 01-000227 COMBINED ENTERPRISES LTDCA 01-00022~ INTERFAST LTDCA 01-000229 PACE ADVERTISING PACE ADVERTISICA 01-000230 'P)l'lo RASHID A. AMANCA 01-000231 SWETA A. ,RAISHI M. & RASILA U,CA 01-00023 KIFARU CARVING SUPPLYCA 01-000233 COMMUNICATING ARTISTS 1~·(1. 1l$,{\-'<)

CA 01-000234 0 VIKRUT PREREQUISITESCA 01-000235 FARM TEA PACKERSCA 01-000236] PEGRUME LIMITEDCA 01-000237 SHANTA SHAHCA 01-000238 AFRICA ILLUSTRATIONS LIMITEDCA 01-000239 I"" BEATRICE NDUTA KIARIECA 01-000240 ~ INTERNATIONAL COMMERCIAL CO.CA 01-000241 v SAVA INDUSTRIES LTDCA 01-000242~ MANO] SHAH R (LIONS A/C),A 01-000243 / SHAMASH & BROS. DISTRIBUTORSCA 01-000244~ SATGURU INVESTMENTS LTDCA 01-000245~ .......)l8DIMUNIM HAJICA 01-000246~PEGRUME LIMITED~CA 01-000247 MEHRAZ EHSANI vrCA 01-000248 PETER JOHN MINVOLTA & CATHERINE'CA 01-000249./ ITALIAN STYLES LTD '/tCA 01-000250 MAXON (K) LIMITEDCA 01-000251 GATEWAY TRANSPORT CO.CA 01-000252~ TECOF INTERNATIONAL LIMITEDCA 01-000253~ TRAX CONSTRUCTION LTDCA 01-000254 / TEBEBE Y BERHANECA 01-000255 IMPCON (AFRICA) LIMITEDCA 01-000256v:, COMMUNICATIqN CAR~IER LTD

.CA 01-0002571/ CEMPACK LTD"~'CA 01-000258 JINA RATNA CONTRACTORCA 01-000259 GUL LAMP SHADESCA 01-000260 DOREEN NAMULANDA VESTERCA 01-000261/ MBc,r;oIMPORTS & EXPORTS AGENCJ~

5,999,916.00 CR0.00

763,094.10 CR4,031.40 DR

38,540,278.99 CR3,115,089.75 CR

28,986,885.83 CR4.60 DR0.20 DR

262.30 DR0.00

46,567,199.94 CR75,640.39 CR30,189.15 CR2,338.70 DR2,866.30 DR

15,001,050.20 CR209.40 DR

0.0028.65 DR0.00

27,304.50 DR0.00

519.71 CR1,829,900.00 CR1,398,195.90 CR

1,556.91 CR4, 947, 234. 30 CR

0.001,021.30 DR

865,034.20 CR1,000,000.00 CR3,5-27,739.10 CR

219.60 DR9,294.48 CR

16.99 CR65,773,046.36 CR

100,788.43 CR0.00

3,606.20 DR0;000.000.00

1,225.00 DR0.00

436.90 CR85,109,924.85 CR62,438,962.91 CR

0.000.000.000.00

124,462,210.4040,051. 2}

24,258,384.0533,909,613.80

916,171,195.50667,677,974.25356,434,999.0715,955,998.204,619,600.00

756,246.40158,054.75

240,165,489.00244,974,345.57

3,433,481.6023,750,498.502,708,502.20

98,357,443.2016,987,291. 60

37,488.80205,300.00600,000.00

25,295,803.22700,000.00

14,930,697.902~,648,697.45

117,528,406.09448,514.71

99,157,114.200.00

480,866.2550,924,184.351,137,500.00

93,549,213.86~56,988,377: 70-3,234,697.015,542,728.39

491,981,635.073,691,247.283,008,210.00

72,170,689.001,084,750.00

350,046.45358,670.00

14, 384, 564.70230,000.00

2,663,966.16247,344,587.69853,250,479.95

10,000,000.00230,677.00

0.00242,350.00

118,567,094.0040,051.25

23,851,162.2033,947,747.60

869,879,682.58660,977,378.30320,188,739.2216,148,243.904,633,726.10

870,720.70158,054.75

205,026,610.01244,292,243.28

4,909,203.3532,722,724.552,821,838.32

87,385,172.5516,999,852.55

37,488.80206,241. 80600,000.00

25,323,107.72714,934.30

14,887,040.0420,881,674.15

116,174,721.80446,957.80

94,209,879.900.00

534,980.5550,354,327.20

142,500.0092,443,975.7157,146,851. 203,635,402.455,554,628.34

431,663,883.143,918,835.323,008,210.00

112,892,453.901,084,750.00

350,046.45359,745.90

14,395,574.00235,200.00

2,663,533.76171,034,669.91798,356,957.3310,000,000.00

234,426.000.00

248,500.00

5,895,116.40 DR0.00

407,221.85 DR38,133.80 CR

46,291,512.92 DR6,700,595.95 DR

36,246,259.85 DR192,245.70 CR

14,126.10 CR114,474.30 CR

0.0035,138,878.99 DR

682,102.29 DR1,475,721.75 CR8,972,226.05 CR

113,336.12 CR10,972,270.65 DR

12,560.95 CR0.00

941. 80 CR0.00

27, 304. 50 CR14,934.30 CR43,657.86 DR

1,767,023.30 DR1,353,684.29 DR

1,556.91 DR4,947,234.30 DR

0.0054,114.30 CR

569,857.15 DR995,000.00 DR

1,105,238.15 DR158,473.50 CR400,705.44 CR

11,899.95 CR60,317,751. 93 DR

227,588.04 CR0.00

40,721, 764.90 CR0.000.00

1,075.90 CR11,009.30 CR

5,200.00 CR432.40 DR

76,309,917.78 DR54,893,522.62. DR

0.003,749.00 CR

0.006,150.00 CR

104,799.60 CR0.00

355,872 .25 CR34,102.40 CR

7,751,233.93 DR3,585,506.20 DR7,259,374.02 DR

192,241.10 CR14,125.90 CR

114,212.00 CR0.00

11,428,320.95 CR606,461. 90 DR

1,505,910.90 CR8,969,887.35 CR

110,469.82 CR4,028,779.55 CR

12,351.55 CR0.00

913 .15 CR0.000.00

14,934.30 CR4 3 , 13 8 . 15 DR62,876.70 CR44,511.61 CR

0.000.000.00

53,093.00 CR295,177 .05 CR

5,000.00 CR2,422,500.95 CR

158,253.90 CR4b9 , 999 . 92 CR

11,916.94 CR5,455,294.43 CR

328,376.47 CR0.00

40,718,158.70 CR0.000.00

1,075.90 CR9,784.30 CR5,200.00 CR

4.50 CR8,800,007.07 CR7,545,440.29 CR

0.003,749.00 CR

0.006,150.00 CR

cha rter house Bark Limi tedReport Da 03/"8/04 Page: 6

PWA-79 Account Turnover Run Date: 03/08/2004 12: 54: 59 PMCharterhouse Bank Limited From 01/01/98 to 03/08/04--------------------------------------------------------------------------------------------------------------------------------------------Account ACcount Opening Balance Debit Credit Turnover ClosingNumber Description

Amount Amount Balance---------------------------------------------------------------------------------------------------------------------------------------CA 01-000262 WAKWETU RADIO HOUSE 0.00 2,328,051.80 2,328,210.55 158.75 CR 158.75 CRCA 01-000263'j MAHESH TAILOR & PARTNERS 0.00 35,822,950.90 35,825,210.00 2,259.10 CR 2,259.10 CRCA 01-000264 CINDERELLA ICE PARLOUR LTD 0.00 7,650.00 35,000.00 27,350.00 CR 27,350.00 CRCA 01-000265 v: CRYSTAL CREDIT LIMITED 17,202,761. 86 CR 72,478,155.45 57,918,717.69 14,559,437.76 DR 2,643,324.10 CRCA 01-000266 SHETHIA CREDIT LTD. 2,801.40 DR 8,044,505.10 8,060,119.08 15,613.98 CR 12,812.58 CRCA 01-000267./' ASCAP ENTERPRISES LTD

0.00 46,287,405.60 46,308,278.20 20,872.60 CR 20,872.60 CRCA 01-000268./ MILLENNIUM HOLDINGS LTD 0.00 89,396.30 89,397.50 1.20 CR 1.20 CRCA 01-000269 ~ SKI-PIX LTD ~

4,204.05 DR 18,327,206.65 18,345,224.65 18,018.00 CR 13,813.95 CRCA 01-000270 MEHRAZ EHSANI

577.00 CR 330,931.00 330,354.00 577.00 DR 0.00- g CA 01-000271 ~ ASPEN HILL LIMITED

LIMI./' 26,974.27 DR 71,016,929.20 73,892,003.17 2,875,073.97 CR 2,848,099.70 CRCA 01-000272 ~ EPSOM HOLDINGS CORPORATION 0.00 114,900,000.00 114,97.1,804.30 71,804.30 CR 71,804.30 CR -CA 01-000273 DAVID M MEREKA 295.90 CR 15,524,329.00 15,527,840.70 3,511. 70 CR 3,807.60 CRCA 01-000274 ~. MUSSILLI & MUSSILLI~OCATES-O 3,713.67 DR 22,327,942.83 22,405,720.03 77,777.20 CR 74,063.53 CR

••CA 01-000275 ./ C. 1. L313,427.79 CR 2~6,791,388.70 243,466,433.20 6,675,044.50 CR 6,988,472.29 CR

CA 01-000276 "..MOSOCQ TRADERS LTD 1,500,000.00 CR 1,500,000.00 0.00 1,500,000.00 DR 0.00CA 01-000277"" LIONS CLUB INTERNATIONAL DISTRI 200.00 DR 10,690,363.85 10,693,272.50 2,908.65 CR 2,708.65 CRCA 01-000278 v 6TH LIONS AFRICA CONFERENCE 0.00 810,728.50 810,730.00 1.50 CR 1. 50 CRCA 01-000279 DR.KIRTEE BABUBHAI PATEL 1,699,922.70 CR 11,153,434.20 9,495,745.50 1,657,688.70 DR 42,234.00 CRCA 01-000280 v' MOHAM ED P J00 500,164.12 CR 5,313,326.12 4,852,693.90 460,632.22 DR 39,531.90 CR

CCA 01-000281' SHAIKH ABDUL &SHAIKH ALTAF 0.00 0.00 0.00 0.00 0.00'CA 01-000282 v SHAIKH ABDUL & SHAIK ALTAF 31,175.20 CR 28,000,270.30 28,005,751.10 5,480.80 CR 36,656.00 CRCA 01-000283../ MOTOR BOTIQUE

19,990,876.35 CR 407,310,840.36 388,803,497.13 18,507,343.23 DR 1,483,533.12 CRCA 01-000284./ B.A. PATEL

31,018.18 CR 17,203,746.85 17,330,508.70 126,761.85 CR 157,780.03 CRCA 01-000285 '/ PEGRUME LTD-VODAFONE A/C 1,696.07 DR 85,973,401.20 86,392,635.97 419,234.77 CR 417,538.70 CRCA 01-000286 P.K.PATEL & ASSOCIATES LTD 0.00 7,279,160.00 7,296,609.20 17,449.20 CR 17,449.20 CRCA 01-000287 ASHUTOSH ENTERPRISE 0.00 2,162,254.80 2,163,161.80 907.00 CR 907.00 CRCA 01-000288 FAR EAST TECHNOLOGIES (EPZ) LTD 0.00 3,923,701.75 3,945,000.00 21,298.25 CR 21,298.25 CRCA 01-000289./ ANIL PAWAR, SHIV R GOEL & SHENA 1,598,203.35 CR 15,726,413.95 14,382,725.27 1,343,688.68 DR 254,514.67 CRCA 01-000290 KENMOSA HOLDINGS

0.00 110,163,193.55 110,382,585.30 219,391.75 CR 219,391. 75 CRCA 01-000291-:/ KIRIT N PATEL ('U •4-'1S1.? 5,501,469.35 CR 10,377,906.37 4,879,921.35 5,497,985.02 DR 3,484.33 CRCA 01-000292 KASSIRI ESSAJEE & ASSOCIATES 1,000,000.00 CR 2,582,450.00 1,683,500.00 898,950.00 DR 101,050.00 CRCA 01-000293~ MARKFIRST (KENYA) LTD 121,601.40 CR 113,091,647.92 114,035,139.63 943,491. 71 CR 1,065,093.11 CR

o CA 01-000294.~ KINGSWAY AUTOMART LTD 12,946,036.55 CR 2,091,781,471.68 2,102,049,501.54 10,268,029.86 CR 23,214,066.41 CRCA 01-000295 ../ REATA PRINTERS . 1.90 DR 4,589,153.80 ... 4,641,832.70 52,678.90 CR 52,677.00 CRCA 01-000296 / NAVIN K. SHAH WHOLESAL~ 2,195.15 CR· 1,484,103.70 1,599,620.10 115,516.40 CR 117,711.55 CRCA 01-000297~ BRAND IMPORTS

0.00 107,809,908.33 109,087,317.13 1,277,408.80 CR 1,277,408.80 CRCA 01-000298 ~CRUCIAL PROPERTIES LTD 0.00 3,920,000.00 3,920,000.00 0.00 0.00CA 01-000299 PEGRUME LIMITED - KQ A/c 32,370.20 CR 18,951,937.20 21,593,951.16 2,642,013.96 CR 2,674,384.16 CRCA 01-000300 - CRUCIAL PROPERTIES LTD-KSH A/c 0.00 103,596,400.00 105,148,488.00 1,552,088.00 CR 1,552,088.00 CRCA 01-000301 TUSKER MATTRESSES LTD 17,058,403.74 CR 4,251,031,163. 80 )I:~ 300,403,533.53 49,372,369.73 CR 66,430,773.47 CRCA 01-000302 DAEWOO MOTORS (K) LTD 5,966.58 CR 39,308,117.78 39,302,794.40 5,323.38 DR 643.20 CRCA 01-000303 PEGRUME LTD - TKL 468.50 CR 9,243,114.40 10,367,788.63 1,124,674.23 CR 1,125,142.73 CRCA 01-000304\LAKMER TECHS LTD

0.00 2,911,265.65 2,911,265.65 0.00 0.00CA 01-0003051,,11'WEIGH BRIDGE ESTATy-TD

0.00 100,000.00 100,000.00 0.00 0.00CA 01-00030~ HOT NET LIMITED

0.00 150,000,140.00' 150,000,200.00 60.00 CR 60.00 CRCA 01-000307 REKHA M.· SHAH 2,650,349.50 CR 57,244,052.05 54,593,703.95 2,650,348.10 DR 1.40 CRCA 01-000308 () J ETHALAL MANJI GONDARIYA 0.00 89,170,445.80 89,176,100.91 5,655.11 CR 5,655.11 CRCA 01-000309 ORCHID DETECTION SYSTEMS LTD 1,148,326.50 CR 19,605,040.00 18,256,903.80 1,348,136.20 DR 199,809.70 DRCA 01-000310' \1\' SEALOL TECHNOLOGY SERVICES LTD 0.00 273,496.80 273,496.80 0.00 0.00CA 01-000311 NEW LOOK (MSA) LTD 1,317.50 CR 42,732,992.15 42,899,758.60 166,766.45 CR 168,083.95 CR

o CA 01-000312 KAMAL PROPERTIES LTD 218.19 DR 1,793,957.00 1,772,807.79 21,149.21 DR 21,367.40 DRCA 01-000311 ALLOY STEEL & CASTINGS LTD 33,987,346.77 CR 748,541,562.67 7,932,049.11 40,609,513.56 DR 6,622 ,166 79 DR

charterh0use Bank LimitedPWA-79 Account Turnover

charterhouse Bank Limited

Repo rt oa , . 03/08/04 page:Run Date: 03/08/2004 12: 54; 59 PMFrom 01/01/98 to 03/08/04

7

------------------------------------------------------------------------------------------.--------------------------------------------------Account Account operri ng Balance Debi t Credi t Turnover cl osi n9Number Description Amount Amount Balance----- ---------------------------------~-------~-------------------------------------------------------------------------------------------CA 01-000314 MOHAMUDA. MOHAMUD V 1,965.10 CR 143,967,193.10 143,967,964.95 771.85 CR 2,736.95 CRCA 01-000315 DISTRIBUTORS & HAULERS (p) LTD 0.00 5,000.00 10,000.00 5,000.00 CR 5,000.00 CRCA 01-000316' J~ CHAITANYA SEVAK 0.00 0.00 10,000.00 10,000.00 CR 10,000.00 CRCA 01-000317.' KANAY SHAH 3,489.86 CR 3,817,863.23 3,837,717.87 19,854.64 CR 23,344.50 CRCA 01-000318 DR. ABDIRIZAK OSMAN & MRS K. AL 0.00 9,444,563.75 9,489,675.05 45,111.30 CR 45,111.30 CRCA 01-000319 MARQUEE SERVICES 3,867.43 DR 10,218,800.00 10,277,629.53 58,829.53 CR 54,962.10 CRCA 01-000320 ROADSTAR LIMITED 82,055,518.12 CR 1,064,949,282.64 983,899,753.85 81,049,528.79 DR 1,005,989.33 CR

t\ ... CA 01-000321 (,) KITEK (7) LTD singly 44,161,956.38 CR 320,021,682.15 265,662,541.28 54,359,140.87 DR 10,197,184.49 DR\ CA 01-000322 BUSINESS TRADING MASTERS ( K ) 16,000,000.00 CR 16,405,000.00 405,000.00 16,000,000.00 DR 0.00

CA 01-000323~1:> NISHIT K PATEL '\'1. 7,957,686.24 CR 120,895,531.28 105,351,368.11 15,544,163.17 DR 7,586,476.93 DRCA 01-000324 SUNDRIES BARGAIN LTD SINGLY 0.00 89,164,563.85 89,181,246.50 16,682.65 CR 16,682.65 CRCA 01-000325 CLASSIC AGRICULTURAL COMMODITIE l,002,193.i7 CR 26,471,035.03 22,571,493.92 3,899,541.11 DR 2,897,347.94 DRCA 01-000326 MBAMBA SALUMU ZE KUSA 16,826.25 DR 35,045,463.20 35,967,638.90 922,175.70 CR 905,349.45 CR

~'A 01-000327 CRYSTAL ICECREAM (p) LTD JOINTL 14,971.20 DR 162,757,109.89 167,617,507.90 4,860,398.01 CR 4,845,426.81 CRCA 01-00032& KENYA VEGEXT ( E.P.Z. ) LTD ElT /' 0.00 0.00 10,000.00 10,000.00 CR 10,000.00 CRCA 01-000329\1~,1\ FAULU TWO THOUSAND LIMITED SING ~ 0.00 1,575,250.00 1,575,250.00 0.00 0.00CA 01-000330) NARENDRA RAICHAND SHAH SINGLY./ 11,993,760.51 CR 129,825,863.36 117,837,930.16 11,987,933.20 DR 5,827.31 CRCA 01-000331 WALLANCE HOLDINGS LTD SINGLY '/". 11,549.30 DR 752,014,183.80 752,425,328.29 411,144.49 CR 399,595.19 CRCA 01-000332 SAMUS SERVICES SINGLY / 2,499,000.00 CR 10,726,905.08 8,241,368.10 2,485,536.98 DR 13,463,02 CRCA 01-000333 WELLEN INTERNATIONAL LIMITED SI . 23,972.60 DR 396,557,368.15 396,762,471.50 205,103.35 CR 181,130.75 CR.CA 01 000334 SEAL HONEY LIMITED EITHER 1,513.00 DR 48,170,807.30 48,172,353.75 1,546.45 CR 33.45 CRCA 01-000335 NAIVASHA SELF-SERVICE STORES LT 10,755.42 DR :737,936,647.58 738,712,197.50 775,549.92 CR 764,794.50 CRCA 01-000336 PACIFIC ACE LIMITED JOINTLY 295.96 DR 3,404,109.99 2,590,074.05 814,035.94 DR 814,331.90 DRCA 01-000337 SALUTE HOLDINGS LTD JOINTLY / 7,956.66 DR 133,377,043.09 135,310,440.49 1,933,397.40 CR 1,925,440.74 CRCA 01-000338 BOOKS FIRST LIMITED EITHER OR 82,375,682.31 CR 473,699,715.22 387,147,664.31 86,552,050.91 DR 4,176,368.60 DR

1"\\ CA 01-000339 .'""" KARIUKI MUIGUA & CO., OFFICE AI- 0.00 0.00 0.00 0.00 0.00CA 01-000340, HIDDEN TREASURES BOOK WHOLESALE V 18,600,969.76 CR 135,149,783.95 116,067,565.05 19,082,218.90 DR 481,249.14 DRCA 01-000341 I •..-KARIUKI MUIGUA & CO.-OFFICE A/c 0.00' 1,307,252.00 1,319,885.00 12,633.00 CR 12,633.00 CRCA 01-000343)J.('<DAIKIN COOLING SERVICES LTD SIN 4,040.00 DR 23,021,624.81 23,040,890.40 19,265.59 CR 15,225;59 CRCA 01-000344 \ QUICK BITES LTD EITHER 3,965.96 DR 5,324,550.55 5,403,233.95 78,683.40 CR 74,717.44 CRCA 01-000345 1 GITHANG INVESTMENT LTD 500.00 DR 16,736,400.00 16,737,800.00 1,400.00 CR 900.00 CRCA 01000346 , WINES OF THE WORLD LTD JOINTLY "1\', 23,177.61 DR .'5,272,268.70 35,577,136.23 304,867.53 CR 281,689.92 CRCA 01-000347 COMMERCIAL CORPORATION (K) LTD' 29,816,292.82 CR 893,625,879.10 868,912,367.37 24,713,511.73 DR 5,102,781.09 CR

OCA 01-000348l\!' KINGSWAY TYRES LTD - CORNER PLA 7,789,715.85 CR 126,820,168.35 120,137,167.46 6,683,000.89 DR 1,106,714.96 CRCA 01-000349 LITELINE ELECTRONICS LTD SINGLY 6,820.90 DR 5,320,956.50 4,812,662.95 508,293.55 DR 515,114.45 DR:CA 01-000350.1 HIDDEN TREASURE BOOK WHOLESALER V 5,162.68 CR 10,220,040.18 10,596,356.53 376,316.35 CR 381,479.03 CRCA 01-000351 HANIF AYOOB SULEIMAN 30,384.64 DR 34,772,635.00 34,949,335.30 176,700.30 CR 146,315.66 CRCA 01-000352 TRITON PETROLEUM CO. LTDV' ~4,367,237.45 CR 2,000,518,723.96 1,920,318,698.06 80,200,025.90 DR 75,832,788.45 DRCA 01-000353 LITELINE ENTERPRISES LTD 4,260.90 DR 16,231,262.00 16,267,293.80 36,031.80 CR 31,770.90 CR

LA 01-000354 ACME CONTAINERS LTD ANY 0bl-E 5,294,855.40 CR 87,831,113.03 75,397,693.90 12,433,419.13 DR 7,138,563.73 DRCA 01-000355 D. G. JONES & PARTNERS V 0.00 1,717,435.75 1,717,435.75 0.00 0.00CA 01-000356 MAQUEE INTERNATIONAL 0.00 0.00 14,950.00 14,950.00 CR 14,950.00 CR

·CA 01-000357 ELDO TYRE CENTRE 19,716,454.15 CR 60,123,024.45 42,276,967.56 17,846,056.89 DR 1,870,397.26 CRCA 01-000358 ASHOK PATEL & NISHIT PATEL r-/ 9,487.78 DR 19,388,051.02 19,159,859.30 228,191.72 DR 237,679.50 DRCA 01-000359 BEPCO PARTS (K) LTD , ~ 15,986.10 CR 40,328,330.80 41,026,104.90 697,774.10 CR 713,760.20 CRCA 01-000360 REALITY TRADING COMPANY LTD ,. 48,371.44 CR 240,579,186.65 240,179,896.34 399,290.31 DR 350,918.87 DR

! CA ()l-()()(Y3f,lMEGHJI SHAH AND SONS LIMITED 0.00 1,400.00 20,000.00 18,600.00 CR 18,600.00 CR:c_. CA 01-000362 BEL PHONES (2000) LIMITED 497.60 DR 11,918,225.80 11,933,302.09 15,076.29 CR 14,578.69 CRCA 01-000363 DAEWOO MOTORS INT'L LTD - SERVI 36,046.43 DR 76,523,710.69 76,618,314.77 94,604.08 CR 58,557.65 CRCA 01-000364 DAEWOO MOTORS INT'L LTD - VEHIC 3,509,010.26 CR 76,512,182.20 73,654,739.04 2,857,443.16 DR 651,567.10 CRCA 01-000365 DALBIT INVESTMENTS LTD ~\ 3,139,765.56 DR 3,984,906,318.70 3,999,894,287.27 14,987,968.57 CR 11,848,203.01 CRCA 0>000366",\'< LOGAN'S LTD 1,052.00 DR 12,929,807.65 ',389,826.95 9,539,980.70 DR Cl,541,032.70 DR

\

rharterhouse Bank LimitedPWA-79 Account Turnover

Charterhouse Bank Limited ~eport Da. 03/08/04 Page:Run Date: 03/08/2004 12:54:59 PMFrom 01/01/98 to 03/08/04

8AccountNumber--------------------------------------------------------------------------------------------------------------------------------------------Account

Description Openi1g Balance DebitAmount Credit

Amount Turnover--------------------------------------------------------------------------------------------------------------------------------------------

I

CA 01 000367CA 01 000368 ,,>\h

CA 01-000369CA 01-000370CA 01-000371CA 01-000372CA 01-000373CA 01-000374CA 01-000375CA 01-000376t-1l\CA 01-000377CA 01-000378CA 01-000379CA 01-000380CA 01-000381CA 01-000382CA 01-000383CA 01-000384CA 01-000385CA 01-000386CA 01~000387CA 01-000388

CA 01 000390CA 01-000391CA 01-000392CA 01-000393CA 01-000394CA 01-000395CA 01-000396·'CA 01-000397 till)CA 01-000398CA 01-000399CA 01-000400CA 01-000401CA 01-000402

'1 • CA 01-000403CA 01-000404CA 01-00040511)t\CA 01-000407CA 01-000408CA 01-0004101'1'H,CA 01-0004111CA 01-000412CA 01-000414CA 01-000415CA 01-000416CA 01-000417~"CA 01-000418CA 01-000419CA 01-000420

'CA 01-000421- CA 01-000422 ",\'1

I _

MBWANJI MILLERS LTDEXPRESS IMPEX LIMITEDALLOY STEEL CASTINGS LTD - EADBBRAND VAN SALESMEGA GOLDEN CLEARINGUNIVERSAL CHURCH OF THE KINGDOM

. CLASSIC MOTO~ARTS LTD1(70. SHAH

DAVID F SMITHSCORPIO TELECOMMUNICATION LTDM. R. SHAH CONSTRUCTION (K) LTDSAVANNAH ACADEMY LTDCommunication Concepts LtdHIDDEN TREASURES STAFFLEXYS COLLECTIONSMEKATECH SERVICES & SUPPLIES LTTHEMIS INVESTMENTS LTD ~GIDEON NDAMBUKI SINGLY vrGREAT PRESENTATION CO. LTDYANKEE FOODS LIMITED ANY TWO TOCROWN SEVENTY LIMITED EITHER ONTRITON NETWORK SOLUTIONS LTD ASRHODA NTHAMBA MBATODIAMOND FOODS SUPPLIERSGAl THO OIL LTDNEPTUNE SOFTWARE LIMITED SINGLYTHE SIMPSON CO. EASTERN AFRICA LSELFWILL FOODS J P MISHRAKITEK (7) LTD, KAHAWALAVINGTON GREEN BOOKSHOP LTDHIGH TOUCH LTD SINGLYMAHESH SHASTRI Raj ParmarSIMBA TECHNOLOGY LTDCOpy CAT LTD ANY TWO JOINTLYUNlfONE INVESTMENTS LTDKISUMU TYRE CENTRETHEMIS INDUSTRIAL SERVICES txISSMEET SHAH & DILPUN SHAH ~YOUNG EXECUTIVES LIMITEDSIMBANET COM LTDKUKI INVESTMENTSSHAH KANJI LALJI & SONS K. LTDYELLOWSTONE ENTERPRISES LTO /JAMIL ASAD ANWARD. SHAH & S. SHAH KNOWN TO THEGREEN CORNER CAFE LTD 1\\1\~~~~\1 'I~Qlql(1HAMED EHSANI & S,R, SHAH N' .WALl MOHAMED & CO. LTDSKYPERTH ENTERPRISESINTRA MARKET TRADIN~PAUL KIBUGI MUITE ~NILE CONSOLIDATED HOLDINGS LTC

9,992,498.60 CR 34,563,492.210.00 5,000.000.00 42,715,166.70

6,514.91 CR 2,182,183.501,261.75 DR 2,853,531.90

500.00 DR .5,390,863.650.00 679,298.00

60,956,389.15 CR 591,570,597.532,289.88 CR 1,105,852.78

36,920.52 DR 150,589,597.330.00 163,081.25

8,000,600.98 CR 11,126,423.9815,371,220.50 CR 52,774,833.65

0.00 1,157,469.003,998,827.49 CR 36,229,490.60

0.00 17,450,280.193,980,041.35 CR 80,481,819.90

35,037.33 DR 27,736,683.384,155,807.82 CR 16,445,662.80

0.00 2,114,406.000.00 0.000.00 6,042,929.900.00 1,500.000.00 5,404,478.40

3,000.00 DR 20,163,910.121,401,880.20 CR 31,575,048.70

0.00 813,000.000.00 369,500.00

8,012,122.80 CR r 174,859,794.87759.42 DR 548,640.08

521,028.28 CR 15,145,277.890.00 0.00

7,879,484.46 CR 29,857,436.479,392.68 DR 154,756,343.92

3,289,250.00 CR _ 315,871,737.508,970,593.75 CR 19,238,788.24

12,859.65 DR 7,162,029.1073,428.87 DR 156,022,833.53

107,871.00 CR 6,865,464.85409,700.50 CR 26,081,565.30

0.00 0.0090.27 DR 4,910.51

35,186.99 CR 11,374,912.962,012.25 CR 11,622,242.40

0.00 1,500,000.00.8,334.88 CR 115,295,750.68

16,342.37 CR 11,137,449.252,227.62 DR 1,020,940.58

500.00 DR 18,001,249.00500.00 DR 15,735,000.00

4,398,038.33 CR~32,945,055.33654,339.23 CR 12,268,231.00

27,051,096.625,000.00

42,722,624.202,175,921.693,253,795.005,457,246.50

680,000.00525,417,241.81

1,105,178.70150,911,454.91

171,681.252,767,499.50

41,337,162.501,160,134.85

31,695,720.8618,865,361.1069,100,615.2527,352,805.6612,040,014.54

2,127,047.0010,000.00

6,827,577.605,000.00

5,539,180.9020,591,873.7029,593,933.75

819,200.00326,251.00

144,542,060.20587,675.84

14,010,142.960.00

25,887,269.85152,397,793.40298,286,730.60

10,307,701.007,247,634.00

156,870,375.167,135,725.23

25,298,568.850.00

5,001.0012,122,386.7011,639,350.551,500,000.00

115,406,309.6211,142,514.25

1,072,356.2818,015,059.6515,748,526.75~8,713,960.69

,,646,386.05

7,512,395.59 DR0.00

7,457.50 CR6,261.81 DR

400,263.10 CR. 66,382.85 CR

702.00 CR66,153,355.72 DR

674.08 DR321,857.58 CR

8,600.00 CR8,358,924.48 DR

11,437,671.15 DR2,665.85 CR

4,533,769.74 DR1,415,080.91 CR

11,381,204.65 DR383,877.72 DR

4,405,648.26 DR12,641.00 CR10,000.00 CR

784,647.70 CR3,500.00 CR

134,702.50 CR427,963.58 CR

1,981,114.95 DR6,200.00 CR

43,249.00 DR30,317,734.67 DR

39,035.76 CR1,135,134.93 DR

0.003,970,166.62 DR2,358,550.52 DR

17,585,006.90 OR8,931,087.24 DR

85 ,604 .90 CR847,541.63 CR270,260.38 CR782,996.45 DR

0.0090.49 CR

747,473.74 CR17,108.15 CR

0.00110,558.94 CR

5,065.00 CR51,415.70 CR13,810.65 CR13,526.75 CR

4,231,094.64 DR621,844.95 DR

Closi ngBalance

2,480,103.01 CR0.00

7,457.50 CR253.10 CR

399,001. 35 CR65,882.85 CR

702.00 CR5,196,966. 57 DR

1,615.80 CR284,937.06 CR

8,600.00 CR358,323.50 DR

3,933,549.35 CR2,665.85 CR

534,942.25 DR1,415,080.91 CR7,401,163.30 DR

418,915.05 DR249,840.44 DR

12,641. 00 CR10,000 .00 CR

784,647. 70 CR3,500.00 CR

134,702.50 CR424,963. 58 CR579,234.75 DR

6,200.00 CR43,249.00 DR

22,305,611.87 DR38,276 .34 CR

614,106.65 DR0.00

3,909,317.84 CR2,367,943.20 DR

14,295,756.90 DR39,506.51 CR72,745.25 CR

774,112.76 CR378,131. 38 CR373,295.95 DR

0.000.22 CR

782,660.73 CR19,120.40 CR

0.00118,893.82 CR

21,407.37 CR49,188.08 CR13,310.65 CR13,026.75 CR

166,943. 69 CR32,494.28 CR

Charterhouse Bank LimitedPWA-79 Account Turnover

Charterhouse Bank LimitedReport DaRun Date:From

03/08/04 page:03/08/2004 12:55:00 PM01/01/98 to 03/08/04

9AccountNumber Opening Balance

-----------------------------------------------.--------------------------------------------------------------------------------------------ACcountDescription Debit

AmountCreditAmount

Turnover--------------------------------------------------------------------------------------------------------------------------------------- Closing

BalanceCA 01-000423 MUCTAR MOHAMED ./ 131.32 CRCA 01-000424 DILPUN G SHAH y' 285.35 CR

o CA 01-000425 KlNGSWAY TYRS LTD( pi ranha Cent 24,415.09 CRoCA 01-000426 KINGSWAY TYRES LTD(university W / 31,422.54 DR

CA 01-000427 KARIUKI MUIGUA & CO., CLIENTS A~.. 26,089.91 CRCA 01-000428 NASSIR AHMED IBRAHIM 3,413.22 CRCA 01-000429 V - MARKET CHOICE LIMITED 47,442.51 DRCA 01-000430 HUMPHREY KARIUKI NDENGWA 4,017.90 CRCA 01-000431 CHANCERY PRODUCTIONS LIMI~ 1,323.19 CR

. CA 01-000433\ ,~, 0 SHAH & MR. R'VITHLANI .' 42,558.83 CR~A 01-000454 t MEDIKEM INTERNATIONAL LTD 58,530.05 CR

CA 01-000455 BlPINCHANDRA HIMATLAL VORA 2,566.58 CRCA 01-000456 MR. NILAY MALDE 8,020.18 CRCA 01-000457' NEPTUNE SOFTWARE LIMITED 4,738.87 CRCA 01-000460 LEXUs STATIONERS LIMITED 4,213.85 DRCA 01-000461 \.;'FONES DIRECT LIMITED /" 30,001,713 .18 CRCA 01-000464 BHAVIK CHANDRAKANT DODHIA yr 8,493.64 CR

\ \ ~.CA 01-000465Utl- COMMUNICATION CARRIER LTD 5,274.42 CR~CA 01-000471 NINENINE LTD 850,142.63 CR

CA 01-000501 WILLIAM K. WOOD / 325.64 DRCA 01-000502 FRANCIS P. WAMBUA ~? 1,000.00 DRCA 01-000504 HARRISON NJERU MUTHURI ??' 34.68 CRCA 01-000507 MORNING DEW 815.43 DRCA 01-000509 0'HONE LINK (K) LTD - 7 't,-.I> (····"f' .• N~ 17,092.03 DRCA 01-0005'10 AUM APPARELS LTD 501,059.89 CRCA 01-000511 I AIRLINE SUPPLIES INTERNATIONAL ··,NC-' "" \(~":n2,881.88 CRCA 01-000515 '-""""HONES DIRECT LTD '71'1 9,933.34 CRCA 01-000518 PANORAHA IMPORTS 0.00

~CA 01-000519t\~. GENCO LIMITED 2,381.07 CR.....-- CA 01-000542 KENYA CATERMART LTD 0.00

CA 01-000543 KACHRA JIVRAJ (K) LTD 19,200.50 DRCA 01-000545~~ RO GAl COM LTD 0.01 CRCA 01-000546 FRESH AN JUICI LTD ,1,465.71 DRCA 01-0005471"[' SHIVAM ENTERPRISES LIMITED .;:. 0.00CA 01-000548 AHMED ABDULLAHI ALI ~'tct(l •.j)ll\o,) C'i.-l! ~I-"':',. 30,000.00 DRCA 01-000549 ROPSONS GENERAL STORES LTD 973.15 DR

.. -o-, CA 01-000550 ~\tI MANJULA N. SHAH 253,435.30 DR.;., CA 01-000551 to,> TEXOIL (K) LTD 1,332.52 CR

. CA 01-000552 v HOME EXPRESS 502.57 DRCA 01-000553/'/ IMAGE MOTORS (K) LTD 9,137,824.44 CRCA 01-000554 MINESH M. SHAH 13.15 CRCA 01-000555 ~ GUACA STATIONERS LTD 7,689.20 DRCA 01-000556~/~ NZIOKA GEMSTONES INTERNATIONAL 0.00CA 01-000557 IJ/' MAXAM ENTERPRISES LIMITED J 835.89 CRCA 01-000558 OSMAN YUSSUF MOHAMED 2,500.00 DRCA 01-000559,./ TINTORIA LIMITED 2,000,177.96 CR

\ q CA 01-000560 tJtfl. KINGSWAY TYRES LTD-vill age mark 500.00 DRCA 01-000561 v KENINVEST HOLDINGS LIMITED 8,407.25 CRCA 01-000562,./ AFRICAN CENTRE FOR CLINICAL TRI ./ 1,350,428.33 CR

; CA 01-000563t!l\ KARIUKI MUIGUA & CO.CLIENTS A/C V 89,464.99 DR! .rCA 01-0005641 KINGSWAY MART LTD i/ 8,682,347.21 CR'·.CA 01-000565./ TEXOIL (K) L-'-f) 8,035.92 DR

(). 'I

19,082.00O.OD

48,774,312.17341,474,930.2825,739,562.22

'81,178,001.4875,554,337.3012,560,639.21

158,900.0035,653,057.667,582,863.947,585,183.234,668,526.852,185,161. 30

15,040,192.62409,918,850.17

14,759,305.502,498,255.774,730,265.982,480,000.003,108,189.40

52,932,230.80527,778.50

502,865,015.3420,854,789.92

0.00306,378,842.22

23,000,000.001,524,841.004,582,127.65

35,920,701.1516,326,612.21

123,925,816.1416,862,435.35

173,980,893.30404,400.00

20,001,000.008,162,453.524,427,635.60

61,433,427.4370,940.00

16,241,997.700.00

229,921.4016,634,500.00'

4,964,250.423,585,824.80

13,082,282.94805,694.05

327,666,534.92544,08'2,413.81

35,462,940.40

20,000.0010,000.00

49,146,430.49343,418,922.96~4,337,359.1581,178,177.3576,562,379.5013,006,933.81

188,202.0035,666,272.027,566,133.957,599,639.455,281,700.002,182,663.40

13,695,586.69365,179,112.7914,854,229.65

2,492,981. 35'3,889,143.532,487,300.003,109,733.15

46,952,916.20533,885.78

484,955,008.801,207,030.95

100,000.00293,021,391.83

22,990,567.101,611,000.004,583,875.00

35,832,654.8016,810,778.85

116,457,250.4416,869,000.00

174,229,716.25,., 409,252.80

20,507,870.608,161,121.004,670,165.00

30,119,943.625,000.00

16,207,276.850.00

247,782.8532,286,997.00

2,983,895.084,002,650.80

13,858,149.8510,000.00'* 32~,854,507.08

507,462,224.48. ~ , 277 , 648 . 72

918.00 CR10,000.00 CR

372,118.32 CR1,943,992.68 CR1,402,203.07 DR

175.87 CR1,008,042.20 CR

446,294.60 CR29,302.00 CR13,214.36 CR16,729.99 DR14,456.22 CR

613,173.15 CR2,497.90 DR

1,344,605.93 DR44,739,737.38 DR

94,924.15 CR5,274.42 DR

841,122.45 DR7,300.00 CR1,543.75 CR

5,979, 314.60 DR6,107.28 CR

17,910,006.54 DR19,647,758.97 DR

100,000.00 CR13,357,450.39 DR

9,432.90, DR86,159.00' CR

1,747.35 CR88,046.35 DR

484,166.64 CR7,468,565.70 DR

6,564.65 CR248,822.95 CR

4,852.80 CR506,870.60 CR

1,332.52 DR242,529.40 CR

31,313,483.81 DR65,940.00 DR34,720.85 DR

0.0017,861. 45 CR

15,652,497.00 CRI, 980, 355 . 34 DR

416,826.00 CR775,866.91 CR795,694.05 DR

1,187,972 .16 CR36,620,189.33 DR

185,291. 68 DR

1,049.32 CR10,285.35 CR

396,533.41 CR1,912,570.14 CR1,376,113.16 DR

3,589.09 CR960,599.69 CR450,312.50 CR

30,625.19 CR55,773.19 CR41,800.06 CR17,022.80 CR

621,193.33 CR2,240.97 CR

1,348,819.78 DR14,738,024.20 DR

103,417.79 CR0.00

9,020.18 CR6,974.36 CR

543.75 CR5,979,279.92 DR

5,291.85 CR17,927,098.57 DR19,146,699.08 DR

102,881.88 CR13,347,517.05 DR

9,432.90 DR88,540.07 CR

1,747.35 CR107,246.85 DR484,166.65 CR

7,470,031.41 DR6,564.65 CR

218,822.95 CR3,879.65 CR

253,435.30 CR0.00

242,026.83 CR22,175,659.37 DR

65,926.85 DR42,410.05 DR

0.0018,697.34 CR

15,649,997.00 CR19,822.62 CR

416,326.00 CR784,274.16 CR554,734.28 CR

1,098,507.17 CR27,937,842.12 DR

193,327.60 DR

-----------------------------------------------------------------------------------------------------------------------------------------Account Account Openi "9 Balance Debi t credi t Turnover Closi n9Number Description Amount Amount Balance~~-gf:gggi~~~-i~~~~~~~~~~~~~~~~~~:~;~;~-------------~~~:f:~g-~~-----;;~:fi:~~~:~~-----;~:~~~:~~~:ii----;~~i~~1;~:~~-~~----:,i~;:j;f::~--ii---CA 01-000568 ~ VILESWGOVINDJI SHAH 0.00 o.oo 10,000.00 10,000.00 CR 10,000.00 CRCA 01-000569;./ NIRAV PRABHULAL SHAH 0.00 5,877, 7BO.00 4,920,000.00 957,780.00 OR 957 ,7BO. 00 DRCA 01-000570./ NAOMI CIDI KOMBATHA 0.00 0.00 20,000.00 20,000.00 CR 20,000.00 CRCA 01- 000

571 CIDI INTE RNATIDNAL 134.44 CR 10,008 . 12 20,000.00 9, 991. B8 CR 10, 126. 32 CR

CA 01- 000572'-- HUNKARTRADING CO LTO 0.00 240, 000.00 20, 000. 00 "0, 000. 00 DR "0, 000.00 DR

CA 01-000573 J l' PRISKO SPECIAL SERVICES 500.00 OR 1, B15, 343.60 1,815,643.60 300.00 CR 200.00 DRCA 01-000575 v::: DALBIT PETROLEUM LTD BO, 034.05 DR .329,051,223.26 , 332, 778,665.05 3,727,441. 79 CR 3,647,407.74 CR

-.Q.9011

-ggil;~..r- CR-E.l>S"!J:r...c9_~IR~1.~0~_<;Q •.._LTOn 0,00 165 , 289, 550.00 . 165, 33B , 850.00 49, 300.00 CR' 49, 300.00 CRCA - U"', HEGROUP I NVESTMENTS LIMITED 91. 05 CR 9, B6 7. 00 20,000.00 10 , 13 3.00 CR 10, 224.05 CRCA 01-000578 ~ IMAGE MOTORS (K) LTO - DEPOSIT 969.30 CR 16,750,335.95 16,790, 5B3. 00 40,247.05 CR 41,216.35 CRCA 01-000579 v AIR SOLUTIONS LTO 0.00 0.00 0.00 0.00 0.00

' '0 ">«:A 01-000580./ STAR ELECTRONICS LTO 3,388,329.17 CR 12,372,117.24 9,490,327.40 2,881, 7B9.B4 DR 506,539.33" " ...-"CA 01-000601 v' NYORO CONSTRUCTIDN CO, LTO 0.00 0.00 15,000.00 1S,000.00 CR 15,000.00

CA 01-000602.c; PATRI CK NJI RU 0.00 123, 000.00 195 ,000. 00 72 , 000.00 CR 72, 000.00CA 01- 00060 3~ EDWARDMICHAEL SMITH 0.00 24 5 , 000.00 365 ,000.00 120, 000. 00 CR 120,000. 00CA 01-000604': HANS APPAREL LTO 8,199.02 DR 6,589, OS9.60 4,229,818.92 2,359,240.68 DR 2,367,439.70CA 01-000605 ZING ENGINEERING WORKS 0.00 1,440,974.00 1,658,451.00 217,477.00 CR 217,477.00CA 01- 000606,"" ZAHIR A HASSANALI 154.46 CR 1, 88 3 ,767.46 159,813. 00 " 723 , 954. 46 DR " 72 3, 800.00CA 01- 00060 7:/ PETROLUBE ENTERPRIS ES LTO 2, 362, 121. 46 CR 745 , 215 .00 430,000.00 315, 215 .00 DR 2, 046, 906 .46CA 01-000608./ MITSUMINET (K) LTO iI.oo 25,000.00 30,000.00 5,000.00 CR 5,000.00CA 0

1000609 BOOKS FI RST LIMITED 262. 75 DR 412 , 600.00 469, 295.00 56, 695 .00 CR 56,492 . 25

CA 01- 000610'/ LIONS CLUB OF ETHIOPIA 0.00 703. 00 3. 00 700. 00 DR 700.00CA 01-000611 v:::. NEWLIGHT SCHOOLS LIMITED/ 0.00 0.00 47,200.00 47,200.00 CR 47,200.00CA 01-000612 ~ DANIEL KEIGI GACHUE 0.00 83B,700.00 1,146,298.00 307,598.00 CR 307,598.00CA 01- 000613 V/ BRAND IMPORTS LIMITED 0.00 5, 707, 648 . 5\ 5, 810, 32S. 20 102 , 676. 65 CR 102,676 . 6SCA 01-000614 V'/ RATILAL K. SHAH 0.00 0.00 117,605.00 117,605.00 CR 117,605.00CA 01-000616 V PRIME EQUIPMENT (EA) LTO 0.00 0.00 30,000.00 30,000.00 CR 30,000.00CA 01 000617 v' DAVID M. KANYINGI ~ 3,303.35 DR 2,061,317.00 2,323,159.55 261,842.5\ CR 258,539.20CA 01 000618~ BRAND DISTRIBUTOR (KENYA) LTO 0.00 1,400.00 10,000.00 8,600.00 CR 8,600.00CA 01- 000619,/ RAKESH SHARMA 200,000.00 CR 310, 000.00 11, 278.00 298 ,7 22 . 00 DR 98, 722 . 00CA 01- 000620 DAVID ARADI AKOTO 0.00 185,000.00 200,000.00 15, 000.00 CR 15 ,000.00CA 01-000621 -. LASHAMLTD 0.00 100,000.00 153,208.00 53 ,208.00 CR 53,208. 00CA 01-000622 / SIAMANDA DUTY FREE LIMITED O. 00 210,600.00 220, 300. 00 9, 700.00 CR 9,700 . 00CA 01-000623/ DIGITAL WORLD LIMITED 0.00 69,000.00 711,356.20 642,356.20 CR 642,356.20CA 01-000 62 4/ PARKER RADID HOUSE LTD 12.22 CR 0.00 50,000.00 50,000.00 CR 50,012 . 22CA 01-000625/ ) ANAT MUKHTAR AHMED 0.00 0,00 50, 000.00 SO,000.00 CR 50, 000 . 00CA 01-000626/ HOTEL SIRIKWA LTD 0.00 ~ 40,000,440.00 p<. 52 ,608,685.00 12,608,245.00 CR 12,608,245.00---+--CA 01-205916 DILPUN SHAH 0.00 • 0.00 .,. 0.00 0.00 0.00CA 01- 300001 AN)UM CHAUDRY 0.00 42,383.21 42,383.21 0.00 0.00CA 01-300002 YUVRA) UDAY SOMCHANDSHAH 0.00 1,102.44 1,102.44 0.00 0.00CA 01- 300003 SAF1A CHAUDRY 0.00 81,094.38 81,094.38 0.00 0.00CA 01-300004 MRS YOGINI 0.00 21,457.95 21,457.95 0.00 0.00CA 01-300005 MRS YOGINI 0.00 6,038.15 . 6,038.15 0.00 0.00

'LA 01- 600001

NEWCALTECHNOLOGIES O.00 60, "2. 22 60, 232 . 22 0.00 0 . 00CA 01-600002,/ DAVID SUNSTRUM 0.00 4,000.00 4,000.00 0.00 0.00CA 01-600003 S.A. PEGRUME & CO. LTO 322.13 CR 912.26 1,442.31 530.05 CR 852 .18 CRCA 01- 600004 AFRlCON SALES LTO 0.00 261.15 79 5.92 534. 77 CR 534 . 77 CRCA 01- 60000

5MARERO PHARMACEUTICAI,:; LTD 7. 00 DR 8, 586.85 9, 229. 73 642 . 88 CR 63 5 . B8 CR

CA 01-600006 PAOLO SATTANINO v 250,124.20 CR 310,904.09 95,707.83 215,196.26 OR 34,927.94 CRCA 01- 60000

7INTfRN ET TRADE SERVICES LTO O.00 60.13 60. nO. 00 0 . 00

Charterhoust Bank LimitedPWA-79 Account Turnover

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10

CRCRCRCRDRCRDRCRCRCRDRCRCRCR rCRCRCRCRDRCRCRCRCRCRCRCR

charterhouse Bank LimitedPWA-79 Account Turnover

Charterhouse Bank LimitedReport oa.Run Date:From

03tr.~/04 Page:03/08/2004 12:55:00 PM01/01/98 to 03/08/04

11

AccountNumber

AccountDescription

--------------------------------------------------------------------------------------------------------------------------------------ClosingBalance

Opening Balance DebitAmount

CreditAmount

Turnover-------------------------------------------------------------------------------------------------------------------------------------CA 01 600008 KINGSWAY TYRE & AUTOMART LTD

CA 01-600009./ COMMUNICATION CARRIER LTO AclCA 01-600012 MANOJ R. SHAH LIO~S A/C

.LA 01-600013,;' MEHRAZ EHSANI ~CA 01-600016 MAGIC KINGDOMCA 01-600019 COMPULYNX LTDCA 01-600020 DR. K. S. & MRS. MANJIT GIDDIECA 01-600021./ MARA TRADING LIMITED ./"CA 01-600024 HAMED & MEHRAZ EHSANI~CA 01-600025~ CEMPACK LTDCA 01-600026VKINGSWAY MOTORS (K) LTDCA 01-600032 PEGRUME LIMITEDCA 01-600035 COMMUNICATION CARRIER LTD Ac2CA 01-600036 PETROLEUM & IND. SERVICES LTD.CA 01-600037 KINGSWAY INVESTMENTSCA 01-600040./ VASANT N GAROODCA 01-600041./ PATEL P SAGARBHAICA 01-600043 NISHIT K PATELCA 01-600048 v' RAJIV KHANNACA 01-600050./ V AND A SHAH ~I.f\CA 01-600053 ASPEN HILL LIMITEDCA 01-600056/ NATIONAL SP. ASSE. OF THE BAHAICA 01-600057 DOREEN NAMULANDA V~ERCA 01-600061,;" MEHRAZ EHSANI v'CA 01-600067 (CRUCIAL PROPERTIES LTD ACICA 01-600070 I~~RUCIAL PROPERTIES LTO(USD) A/CCA 01-600071 . MARKFIRST (KENYA) LTDCA 01 600072vf\~MRS SAFIA CHAUNDRY & MR NOORDINCA 01-600078/ Hamed Ehsani URI AccountCA 01-600084~ WINES OF THE WORLD LTDCA 01-600085 ALLOY STEEL & CASTINGS LTD(A 01 600088 WALLANCE HOLDINGS LTD ~

- CA 01-600090 WELLEN INTERNATIONAL LIMITED ;~\CA 01-600092 TRITON PETROLEUM CO. LTD

01-600093/ CAPRICORN S.R.L - ~---CA 01-600094./' SAILESH & MEHUL SAVANICA 01-600098 CAPRICORN S.R.L - _CA 01-600099 DALBIT INVESTMENTS LTDCA 01-600101 JASPAL SAGOOCA 01-600102/ William .T. carlin, wtcarlin@yaCA 01-600106 THEMIS INVESTMENTS LTDCA 01-600108 ANJUM CHAUDRYCA 01-600109 NEPTUNE SOFTWARE LIMITEDCA 01-600110'/ MEDIKEM INTERNATIONAL LTDCA 01-600111 MAHESH SHASTRICA 01-600112 ZEPHYR (D. F) LTD.CA 01-600115 YOUNG EXECUTIVES LIMITEDCA 01-600116 ADIL LAKHANI & MINAZ JAVER LAKHCA 01-600117 ADIL LAKHANI & MINAZ JAVER LAKHCA 01-600118 ADIL LAKHANI & MINAZ JAVER LAKHCA 01-600119 EAST AFRICAN SAFARI AIRCA 01-60012J / VIJAYKANT V RANIGA

0.0020.00 DR

112,710.07 CR179,230.86 CR

0.0013,172.00 CR

0.000.000.00

70,152.30 CR2,190.26 CR

416,863.85 CR312,841. 41 CR

0.000.000.00

36,316.38 CR0.00

46,874.86 CR122.06 CR

0.000.000.00

91. 30 CR0.000.00

8,695.16 DR3,999.59 DR

0.000.00

266,305.41 CR0.000.00

1,394,607.14 CR69,377.07 CR4,500.00 CR

"'~ 0.00(J!', 030,988.81 CR; 0.00

0.000.00

27.00 DR236.50 CR

7.00 DR0.00

6,310.00 CR0.000.000.000.000.000.00

33,895.082,290.96

176,461. 53"432,921. 42

315.0026,518.37

5,486.034,393.33

118.0070,495.003,875.52

654,065.56320,931. 22

490.41309.00965.48

48,864.30'22,986.0946,835.66

164,316.77165.00434.75

36.5088,631.69

158,128.6346,849.08

6,768.871,526.76

19,972.002,995.00

263,662.93l 3,834.83"'-.4,711.572,629,154.64

157,234.1412,386.37

0.00.9,800,167.83

383,965.00839.00

33,651.107,209.39

66,411.0035,340.45

20.009,047.00

0.0020,000.0020,000.006,493.78

165,156.3015,000.27

33,895.082,371.92

173,983.43436,622.41

630.0017,244.8310,972.06

5,386.67236.00

7,476.602,514.97

245,564.0411,917.60

980.82618.00

1,930.9612,572 .0092,891.18

2,769.00240,072.25

330.0018,590.00

36.50149,636.80316,257.2693,698.1615,464.03

5,796.2221,136.00

3,444.5014,089.46 .

3,834.834,711. 57

1,234,547.5087,857.07

9,965.270.00

813,322.66383,965.00

11,563.0033,651.10

7,274.0066,210.1635,380.95

20.0031,565.00

0.0020,000.0020,000.006,493.78

165,156.3024,000.54

0.0080.96 CR

2,478.10 DR3,700.99 CR

315.00 CR9,273.54 DR5,486.03 CR

993.34 CR118.00 CR

63,018.40 DR1,360.55 DR

408,501.52 DR309,013.62 DR

490.41 CR309.00 CR965.48 CR

36,292. 30 DR69,905.09 CR44,066.66 DR75,755.48 CR

165.00 CR18,155.25 CR

0.0061,005.11 CR

158,128.63 CR46,849.08 CR

8,695.16 CR4,269.46 CR1,164.00 CR

449.50 CR249,573.47 DR

0.000.00

1,394,607.14 DR69,377.07 DR

2,421.10 DR0.00

8,986,845.17 DR0.00

10,724.00 CR0.00

64.61 CR200.84 DR

40.50 CR0.00

22,518.00 CR0.000.000.000.000.00

9,000.27 CR

0.0060.96 CR

110,231.97 CR182,931. 85 CR

315.00 CR3,898.46 CR5,486.03 CR

993.34 CR118.00 CR

7,133.90 CR829.71 CR

8,362.33 CR3,827.79 CR

490.41 CR309.00 CR965.48 CR

24.08 CR69,905.09 CR.2,808.20 CR

75,877.54 CR165.00 CR

18,155.25 CR0.00

61,096.41 CR158,128.63 CR46,849.08 CR

0.00269.87 CR

1,164.00 CR449.50 CR

16 , 731 . 94 CR0.000.000.000.00

2,078.90 CR0.00

44,143.64 CR0.00

10,724.00 CR0.00

37.61 CR35.66 CR33.50 CR0.00

28,828.00 CR0.000.000.000.000.00

9,000.27 CR

CharterhOlJse Bank LimitedPWA-79 Account Turnover

Charterhouse Bank LimitedReport OilRun Date:From

03/08/04 Page:03/08/2004 12:55:00 PM01/01/98 to 03/08/04

12AccountNumber----------------------------------------------------------------------------------------------------------------------------------------Account

Desc ription Opening Balance DebitAmount Credit

Amount Turnover---------------------------------------_._-------------------------------------------------------------------------------------------CA 01 600122

CA 01-600123CA 01-600124CA 01- 60012 5 ./CA 01-600126CA 01-600127CA 01-600128CA 01-600129CA 01-600130CA 01-600132 v'CA 01-600137CA 01-600138./CA 01-600142CA 01-600144 .>CA 01-600147!---g. CA 01-600151CA 01-600152 vCA 01-600153!CA 01-600155 !CA 01-600157CA 01-600158 .CA 01· 600159CA 01-600160CA 01-600161CA 01-600162CA 01-600163CA 01-600165CA 01-600168 _CA 01-600169'--CA 01-600173CA 01 600176"-CA 01-600177CA 01-611001CA 01 611002CA 01 611003CA 01-611004CA 01-700027CA 01-700038---~ - CA 01-700044CA 01-700054CA 01-700058CA 01-700105CA 01-700107CA 01-700128CA 01-700141CA 01-700154CA 01-700167CA 01-700170-CA 01-700171.-"

I CA 01-710000i .--....CA 01-711001.~ GA 01· 800089

MARKET MASTERS LTD 4,240.00 CRKUKI INVESTMENTS 0.00MEKATECH SERVICES & SUPPLIES LT 0.00NILE CONSOLIDATED HOLDINGS LTD 185,023.80 CR~LITY -TR4QJl!0.... COM~Y LTD 2, 929.45 CRAUTO IMPORT LTD - 0.00JAKHARIA PACKERS 29,735.00 CRHIDDEN TREASURES BOOK - AC 1 6,405.90 CRJAMIL ASAD ANWAR 0.00DE LA MARTIN SERNA 40.00 DRNEPTUNE SOFTWARE LIMITED 31,748.00 CRINTERNATIONAL COMMERCIAL CO. (K 11,302.35 CRKENYA CATERMART LTD 0.00INTEGRATED TELECOM LIMITED 0.00SIMBANET COM LTD ,21,162.00 CRKUSTRON KENYA LIMITED ~~~-------·--·I< _ 85,103.98 CREAST AFRICAN FOUNDRY WORKS (K) L lOS', 345 :50 CRANTHONY J. RODRIGUES 2,384.80 CRSIMBA TECHNOLOGY LTD 27,613.00 CRAFRICA SPIRIT LIMITED 67,906.00 CRJITENDRA SHAH & MRS SURBHI SHAH 0.00MR AMAR SHAH 0.00MRS. SURABHI SHAH 0.00MR. A ..J SHAH 0.00MRS. S.J SHAH 0.00AFRICAN CENTRE FOR CLINICAL TRI 144,347.66 CRMRS. S.J SHAH V~ 0.00NAINA M.SHAH &_MANISH R. SHAH, 1,547.00 CRHANIF AYOOB SULEIMAN 1,940.00 CRLIONS CLUB OF ETHIOPIA 37,875.00 CRLORETTA WAVINYA NZONGI 0.00AZHAR CHAUDRY 10,000.00 CR' .Akiba Bank 250,000.00 CRCo-operative Bank of Kenya Ltd <"-:.I·· .• ,;'Jo 1,200,000.00 CRAmeri can Express Bank Ltd Frank < .- 50,441. 97 CRFina Bank ..~. .;: 250,000.00 CR__NAKUMATT INVESTMENTS LTD 0.00KINGSWAY TYRE & AUTOMART LTD 0.00V AND A SHAH 2,417.47 CRASPEN HILL LIMITED 0.00BHARATKUMAR A PATEL 0.00CHANDRAKANT PETHRAJ SHAH/JYOTIK 109.31 CRALLOY STEEL & CASTINGS LTD 0.00CHANDRAKANT PETHRAJ SHAH/JYOTIK 0.00THEMIS INVESTMENTS ~TD 10,000.00 CRPAOLO SATTANINO ~ 4,552.40 CRHEGROUP INVESTMENTS LIMITED 4,905.00 CRA.K PATEL MR 30,000.00 CRFARID RAJABALI HAMIR 0.00Canara Bank London Ltd 0.00co-operative Bank of Kenya Ltd 649,673.03 CRALLOY STEEL & CASTINGS LTD I 19,875.00 CR

8,496.800.000.05

304,201.3581,166.498,023.08

29,735.0019,139.88

0.0022,460.3834,073.0011,259.50

0.000.00

19,400.254.00 '

100,188:002.00

24,080.00143,167.40

0.000.000.000.00

20,000.0066,976.50

0.001,330.00

7.007.000.00

10,000.00250,000.00

1,200,000.0050,441.97

250,000.001,231. 57

10,159.86303,187.39

100.007,348.90

0.000.00

22,359.0611,656.40.1,718.004,905.00

5.006,070.00

0.00649,673.0320,123.70

4,256.800.000.00

139,604.3579,369.658,023.08

0.0016,159.93

0.0022,500.002,416.403,908.627,226.94

116.911,427.005,239.00

455.831,750.001,791. 00

83,096.0020,000.0020,000.0020,000.0020,000.0020,000.0013,786.0020,000.00

0.000.000.00

3,000.000.000.000.000.000.00

2,463.1417,397.95

717,974.87200.00

7,697.8022,920.22

0.0022,359.0625,000.00

166.000.000.00

7,000.000.000.00

291.98

4,240.00 DR0.000.00

164,597.00 DR1,796.84 DR

0.0029,735.00 DR

2,979.95 DR0.00

39.62 CR31,656.60 DR7,350.88 DR7,226.94 CR

116.91 CR17,973.25 DR

5,235.00 CR99,732.17 DR1,748.00 CR

22,289.00 DR60,071. 40 DR20,000.00 CR20,000.00 CR20,000.00 CR20,000.00 CR

0.0053,190.50 DR20,000.00 CR1,330.00 DR

7.00 DR7.00 DR

3,000.00 CR10,000.00 DR

250,000.00 DR1,200,000. 00 DR

50,441.97 DR250,000.00 DR

1,231.57 CR7,238. 09 CR

414,787.48 CR100.00 CR348.90 CR

22,920.22 CR0.000.00

13,343.60 CR1,552.00 DR4,905.00 DR

5.00 DR930.00 CR

0.00649,673.03 DR19,831.72 DR

ClosingBalance

0.000.000.00

20,426.80 CR1,132.61 CR

0.000.00

3,425.95 CR0.000.38 DR

91.40 CR3,951.47 CR7,226.94 CR

116.91 CR3,188.75 CR ,

90,338.98 CR .J'1j,)

5,613.33 CR4,132.80 CR5,324.00 CR7,834.60 CR

20,000.00 CR20,000.00 CR20,000.00 CR20,000.00 CR

0.0091,157.16 CR20,000.00 CR

217.00 CR1,933.00 CR

37,868.00 CR3,000. 00 CR

0.000.000.000.000.00

1,231. 57 CR7,238. 09 CR

417,204.95 CR100.00 CR348.90 CR

23,029.53 CR0.000.00

23,343.60 CR3,000.40 CR

0.0029,995. 00 CR

930. 00 CR0.000.00

43.28 CR

C~3rterhouse Bank LimitedPWA-79 Account Turnover

charterhouse Bank LimitedReport oa.Run Date:From

03/08/04 page:03/08/2004 12: 55:01 PM01/01/98 to 03/08/04

13

AccountNumber

- ----------------------------------------------------------------------------------------.-------------------------------------------------closingBalance

AccountDescription

opening Balance DebitAmount creditAmount Turnover------------------------------------------------------------------------------------------------------------------------------------CA 01-800098

CA 01-800113CA 01-800145

~

A 01-811001CA 01-811002

A 01-900001CD 00-201452CD 00-202533CD 01-000051CD 01-000052CD 01-200001CD 01-200002CD 01-200003CD 01-200004CD 01-200005CD 01-200006CD 01-200007CD 01-200008CD 01-200009CD 01200010CD 01-200011CD 01-200012CD 01-200013CD 01-200014CD 01-200015CD 01-200016CD 01-200017CD 01-200018CD 01-200019CD 01-200020CD 01 200021CD 01-200022CD 01-200023CD 01-200024CD 01-200025CD 01-200026CD 01-200028CD 01-200030CD 01-200031CD 01-200032CD 01-200033CD 01-200034CD 01-200035CD 01-200036

~ CD 01-200037CD 01-200038CD 01-200039CD 01-200040

. -- CD 01-200041CD 01-200042CD 01-200043CD 01-200044

CAPRICORN S.R.LTHEMIS INVESTMENT~ LTDPAOLO SATTANINO tICo-operative Bank of Kenya LtdAkiba BankJITENDRA SHAH & MRS SURBHI SHAHMARKET MASTERS LTDVEELESH P GOHILS.M.J. LAKHANILUCY W MWANGIK. N. PATEL & OTHERSDEKA INDUSTRIESR.Z. HARIAHIRJI SEYANIR.Z. HARIAVIPUL HARIA & AARTI HARIARATANBHAI L SHAHS.M.J. LAKHANIMOHAMED HASHAMRAKSHA VEKARIA,SHAMJI,JEHSANI,VMRUDULA S SHAHPOMESH B SHAHG.D. PATELSWETA A. ,RAISHI M. & RASILA U,SWETA A. ,RAISHI M. & RASILA U,SWETA A. ,RAISHI M. & RASILA U,SWETA A.,RAISHI M. & RASILA U,SWETA A. ,RAISHI M. & RASILA U,SWETA A.,RAISHI M. & RASILA U,J .S. BADIANI '-- -

\'--SANJAY R SHAH, 'SANJAY R SHAH,--SANJAY R SHAH

SKYPLAST MANUFACTURERS LTD.AFRICALAND COMPUTERS (K) LTDNISHIT & CO. LTDSUBHASH CHANDRA M GUDKASOBHAGCHAND R SHAHCHUNILAL K SHAHKINGSWAY TYRE & AUTOMART LTD

.-,SANJAY R SHAH( SHANTILAL DEVCHAND & SATISHCHAN

LEAFSPRING MANUFACTURERS LTDRAMESHCHANDRA KHOLIKAMAL R SHAHVIJAY K SHAHNISHIT C. SHAH & MRS DIPSHIKA S

.-5ANJAY R SHAHKAMAL R SHAHMAYUR KUMAR RAOJIBHAI PATEL

.-~SAN JAY R SHAH. 'SANJAY R SHAH

0.001,447.80 CR

198,556.52 CR40,037.33 CR

100,000.00 CR124,800.00 CR

0.003,471.20 CR

0.000.00

232,205.27 CR219,604.53 CR104,178.02 CR347,116.46 CR134,075.33 CR

819.86 CR20,590.35 CR

144,657.53 CR19,491. 77 CR46,109.58 CR41,556.53 CR

8,152.62 CR323,214.86 CR10,694.62 CR25,748.14 CR25,449.98 CR9,921.65 CR

12,591. 40 CR50,268.01 CR

174,799.10 CR269,585.38 COR359,699.23 CR570,089.34 CR45,840.83 CR

332,821. 68 CR33 ,988 . 79 CR18,343.22 CR

9,309.85 CR9,309.85 CR

638.33 CR134,249.80 CR

1,998.97 CR15,353.46 CR56,867.48 CR58,856.85 CR

1,352,452.06 CR679,721. 82 CR134,249.80 CR

1,352,452.06 CR58,856.85 CR

202,448.88 CR202,448.88 CR

79,421. 365,126.62

280,758.50.40,037.33

100,000.000.00

350,000.00260,471.20

0.000.00

7,799,609.172,499,604.531,153,000.008,131,910.831,729,500.05

150,819.86314,525.85

5,644,657.53519,491.77

2,046,109.58636,581.95272,295.76

6,981,390.34687,168.60

1,654,412.201,635,255.20

637,502.66809,043.95

3,229,903.561,909,241. 402,944,543.653,928,810.056,226,793.85

828,458.855,537,222.60

560,163.39244,779.30115,562.65115,562.65177,147.53

2,793,407.06610,019.17242,836.80

2,193,336.322,176,226.65

iz. 147,059.006,997,460.352,793,407.05

12,147,059.602,176,226.654,212,459.604,2V,459.60

79,421. 36140,377.38126,667.15

0.000.000.00

350,000.00257,000.00

0.000.00

7,567,403.902,280,000.001,048,821.987,784,794.371,595,424.72

150,000.00293,935.50

5,500,000.00500,000.00

2,000,000.00595,025.42264,143.14

6,658,175.48676,473.98

1,628,664.061,609,805.22

627,561. 01796,452.55

3,179,635.551,734,442.302,674,958.273,569,110.825,656,704.51

782,618.025,204,400.92

526,174.60226,436.08106,252.80106,252.80176,509.20

2,659,157.26608,020.20227,483.34

2,136,468.842,117,369.80

10,794,606.946,317,738.532,659,157.25

10,794,607.542,117,369.804,010,010.72. 010,010.72

0.00135,250.76 CR154,091.35 DR40,037.33 DR

100,000.00 DR0.000.00

3,471.20 DR0.000.00

232,205.27 DR219,604.53 DR104,178.02 DR347,116.46 DR134,075.33 DR

819.86 DR20,590.35 DR

144,657.53 DR19,491. 77 DR46,109.58 DR41,556.53 DR

8,152.62 DR323,214.86 DR

10,694.62 DR25,748.14 DR25,449.98 DR9,921.65 DR

12 , 591. 40 DR50,268.01 DR

174,799.10 DR269,585.38 DR359,699.23 DR570,089.34 DR45,840.83 DR

332,821.68 DR33 , 988 . 79 DR18,343.22 DR

9,309.85 DR9,309.85 DR

638.33 DR134,249.80 DR

1,998.97 DR15,353.46 DR56,867.48 DR58,856.85 DR

1,352,452.06 DR679,721.82 DR134,249.80 DR

1,352,452.06 DR58,856.85 DR

202,448.88 DR202,448.88 flR

0.00136,698.56 CR44,465.17 CR

0.000.00

124,800.00 CR0.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.00

Report to the Statutory Manager, Charterhouse Bank Limited “Under Statutory Management”

PRICE WATERHOUSE COOPER

1

TABLE OF CONTENTS

Page

1 Executive summary 1

1.1 Introduction 1 1.2 Information flow and availability 1 1.3 Key findings 3

2 Know your customer “KYC” procedures 9 3 Compliance with laws and regulations 11

3.1 Requirements of the Banking laws and regulations 11 3.2 Returns to CBK 11 3.3 Splitting of foreign currency transactions 12 3.4 Insider lending 13 We have included Appendix L showing the Insider lending disclosed to

CBK as at 31 March 2006. Securities for insider lending 14 Securities for insider lending 15

4 Transactions with related parties 16 4.1 Deposits by the directors of the bank and their families 16

4.1.1 Accounts operated by the Kingsway group 16 4.1.2 Nakumatt Holdings Limited - CA 01-000085 18 4.1.3 Greenhills Investments Limited 19 4.1.4 Lions Club of Ethiopia CA 01-600173 20

5 Unusual transactions and accounts which indicate abnormal operation of the bank 21 5.1 Cash transactions 21 5.2 Webs of related accounts 22

5.2.1 Companies related by transaction 22 5.2.2 Paolo Sattanino CA 01-600006, 01-800145, 01-700154 and FX 01-

400006, 01-400145, 01-400154 23 5.2.3 Dilpun Shah Group 25

5.3 Odesys Enterprises account CA 01-000740 26 5.4 Use of sundry creditors account 27

5.4.1 Sailesh Prajapati – Account CA 01 -000148 27 5.5 Unusual loan accounts 29

5.5.1 Parmex Limited 29 5.6 Large transactions and inward and outward telegraphic transfers

which are unsupported 30 5.6.1 Crucial Properties Limited 31 5.6.2 Kariuki Muigua & Co Advocates 33 5.6.3 Kingsway Motors Group 36 5.6.4 American Express Bank, New York - Nostro A/C 01-610000 40 5.6.5 Canara Bank Limited - Nostro A/C 01-710001 42

5.7 Accounts opened, operated and closed within a short time 42 5.8 Payments for insurance premiums 44 5.9 Accounts operated outside their mandates 44

5.10 Alterations to customer instructions 45 5.11 Foreign currency accounts maintained in Kenya Shillings 47 5.12 Matters noted on review of fixed and call deposits 48

5.12.1 Fixed deposit accounts with debit balances 48 5.12.2 Fixed and call deposit accounts operated and closed without being

credited with interest 50 6 Other accounts with unusual transactions 51

6.1 Creative Innovations Limited 51 6.2 Abdul Qadir Alladina and Mohammed Yusuf – CA 07-600807 51 6.3 Round sum transactions 52 6.4 Triton Petroleum Company Limited A/C no. 01-000352 52 6.5 Accounts with no entry since their opening 53

Appendix (Prepared from analysis of our investigations) I – VI

Appendix (Extracts obtained from bank’s own information) A – L

PricewaterhouseCoopers Project Fabio 1 Report to the Statutory Manager, Charterhouse Bank “Under Statutory Management”

12 Executive summary

1.12.1 Introduction The Statutory Manager, Charterhouse Bank Limited appointed PricewaterhouseCoopers Limited to conduct some investigations under terms of reference contained in the contract dated 12 July 2006.

Under the terms of reference, we were to carry out the following tasks;

i) Review transactions that Charterhouse Bank Limited (“CB Limited” or “the bank”) has recorded in clients’ accounts with special focus on insider and group-related client accounts;

ii) Determine if there are any indications of irregularities, such as illegal transactions or criminal offences, fraud or dishonesty committed in the course of conducting business;

iii) Establish if further work would need to be carried out to provide evidence of any irregularities committed, or provide any other relevant recommendations;

iv) Determine the status of CB Limited’s compliance with and prudence in following Know Your Customer (KYC) best banking procedures through review of the appropriateness of the institution’s KYC policy and its application on all targeted accounts;

v) Determine if there has been any material breach of the Banking Act, the Central Bank of Kenya Act or the regulations, guidelines or other matters prescribed by the Central Bank during the period covered by the review.

The scope of the investigation was limited to reviewing information available within the bank. The investigation did not involve interviewing customers or other third parties or reviewing the records of or information held by customers and third parties. Consequently, the ability of the review to reveal criminal or illegal transactions committed by customers is limited. While the review revealed irregular transactions, it is difficult to ascertain whether criminal or illegal activities have occurred by reviewing bank records alone. From our reviews, we have reported transactions that are irregular and give our recommendations on the way forward, including recommendations for further investigations and follow-up of issues with previous management. Our work included sampling more than 1,004 accounts in accordance with our terms of reference and reviewing in detail transactions in those accounts which appeared unusual, with special focus on insider and group related client accounts. As explained below, we faced considerable handicap in obtaining information necessary for our review. Therefore, all unusual transactions may not be reasonably expected to be identified from our work.

1.22.2 Information flow and availability We were faced with some formidable challenges in obtaining information which impeded the progress of our review. As a result, we were not able to access some of the information that we would have wished to obtain to make the exercise more effective. Some example of this are;

i) We got the impression of a general unwillingness among the bank’s staff to provide us with information and only got minimal cooperation from them;

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ii) The bank’s general manager proceeded on leave without notice at the beginning of the assignment rendering information flow difficult;

iii) We were not able to obtain certain documents for transactions prior to June 2004 as the relevant supporting documents were said to have been destroyed in a fire at the company’s archives in September 2004;

iv) The bank’s core system, Equinox, was down for most of the time and was never fully functional as it experienced considerable downtime. Efforts to get Equinox vendors, Neptune Software Limited to resolve these handicaps did not bear much fruit in the first two weeks of the assignment. Afterwards, the system was intermittently down and some of the functionalities could not be utilised;

v) By the time of writing this report we had not obtained documentation in support of telegraphic transfers (TTs) for periods prior to 1 January 2005. We also did not obtain supporting documents for the last quarter of 2005. There were significant transfers made during this period and especially between 25 and 26 October 2005. The Statutory Manager attempted to obtain the documents for these 2 days, which we understand were available but management refused to yield. We also understand that subsequent to our departure from the bank, the Banking Fraud team was called in to help extract the documents for these days;

vi) We also requested but did not obtain from the bank’s management supporting vouchers for the nostro accounts for periods prior to January 2006. The manager in charge of the department informed us he was new and could only provide information for 2006 transactions. We were only able to get some of this information on the last day of the field work. Consequently, we could not investigate these accounts fully.

vii) Our use of computer-assisted audit tools to interrogate data was also frustrated as neither the bank, nor their system vendors could provide the investigating team with the requisite data dictionaries to enable us interpret the data. This means that whilst we could review the debit and credit entries in each account, we could not easily identify the other side of the entries. For example, if we identified a credit entry in the sundry creditors account, it was not possible to identify the corresponding debit without laboriously reviewing the individual entries in the various accounts in which we suspected the debit entry would be.

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1.32.3 Key findings The key findings of our work are as follows:

i) The bank is not following accepted KYC procedures. Although the bank has clearly documented KYC procedures, these are largely ignored and there is no documented evidence of the bank attempting to obtain an understanding of the identity of some of the bank’s active customers or their businesses. There are strong indications of irregular activity in some of these accounts.

ii) The bank is in breach of the Banking Act and Prudential Guidelines with respect to

single borrower limits and insider lending and reporting / maintenance of documents for foreign currency transactions.

iii) There is evidence of the bank carrying out banking operations without complying with laid

down internal control procedures or only intermittent application of key laid-down policies and procedures. Examples of irregular operations include the following:

− Customer mandates were in some cases either ignored or overstepped. We noted

instructions to transfer funds from individuals who did not have appropriate authority;

− Alteration of cheque details;

− Opening and closing accounts for purposes of passing certain specific transactions.

− We also noted instances where cheques honoured for payment by the bank were not signed by the customer.

− Failure to maintain appropriate records of transactions;

There are numerous anomalies identified which raise doubts about the credibility of the information and records maintained by the bank. We consider the general control environment in the bank as weak and we have seen evidence of rampant override of controls by management.

We recommend further investigation into the operations of the bank and more specifically in respect of some transactions highlighted in this report to rule out the possibility of money laundering, abetting of tax evasion by customers or other irregularities. We have detailed numerous unusual transactions in section 5 of the report, which point to possible irregularity, some involving accounts of companies related to the directors of CB. A number of accounts need to be investigated further, including all accounts of the Kingsway Motor Group and related companies, the Kariuki Muigua & Co Advocates accounts, accounts related to Dilpun Shah, and all accounts identified in the web of transactions involving Paolo Sattanino as discussed in Section 5.2 of the report. For such further investigation to be effective, it should extend to speaking to the customers and reviewing their records.

Some of the key findings are summarised below and discussed in greater detail in the main report.

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Know your client (KYC) procedures Banking best practice requires banks to gain an understanding of the customer’s identity and their source of funds among other things. CB has developed some KYC procedures that require prospective customers to supply certain information and to complete account opening forms which are then approved before an account can be opened. We however noted that these procedures are largely ignored. Some of the discrepancies are as follows:

i) Numerous account opening forms are missing or are incomplete;

ii) A number of accounts do not have customer’s contact details/addresses. This could be an indication that such customers do not get statements of account (which acts as a check against irregular activity in customer accounts).

iii) There are accounts, both personal and corporate, that do not have the customer’s photo image either on the system or on the physical account opening forms. The bank’s KYC procedures require photo and signature images for both personal and corporate accounts.

iv) Some accounts do not have proper account names. For example, numerous accounts are only described using initials such as CIL, PIVB, S Shah and D Shah. Some of these accounts do not have account opening forms and have been used to process unusual transactions.

v) The credit histories for most of the advance files we reviewed are not up to date;

vi) CBK prudential guideline CBK/PG/08 requires banks to report suspicious transactions to CBK. Some of the transactions observed are suspicious and one would expect a bank to report such transactions to the Central Bank. There are indications that the bank officials may be involved in abetting these suspicious transactions.

vii) In the absence of customer details, especially where there are no documents at all signed by customers, it is difficult to confirm that the customers actually exist in all cases, or whether accounts have been created to facilitate specific transactions.

Out of the 1,004 accounts sampled for KYC reviews, we did not obtain 839 account opening forms or customer instructions (being 83% of our sample and representing 217 relationships). We were informed by management that these forms/ instructions do not exist. We have analysed the results of the 165 forms that we were able to review in Appendix II.

Of the account opening forms obtained, we have summarised in the table below the key findings analysed into the following three categories based on the nature of the customer:

• Incorporated businesses

• Unincorporated entities/ partnerships

• Personal accounts

The table below summarises these exceptions:

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Company accounts

Other entities

Personal accounts

Total

Account opening forms reviewed 98 21 46 165 Account opening documents NOT properly completed by the account holder 5 1 2 8

Account opening form has NOT been authorised by branch Manager 12 2 5 19

Memorandum and articles of association NOT obtained 10 10 Certificate of incorporation NOT obtained. 15 15 Trade License NOT obtained 50 15 65 Resolution by the board of directors to open account NOT obtained 46 46 Identification details of at least the board Chairman or Managing Director NOT obtained 24 15 6 45

Address verification documents NOT obtained e.g. Utility bills, bank statements 63 40 103

Audited financial statements for at least one year NOT obtained 87 9 96 PIN/VAT registration NOT obtained 24 12 32 68 Written confirmation NOT obtained from previous banker where applicable 48 18 16 82 Suitable account introducer NOT verified 28 16 15 59 Copies of documents obtained have NOT been certified as true copies of original 10 11 12 33

Certificate of registration of business name NOT obtained. 7 7 Identification details of at least two partners is NOT obtained 14 14 Signed partnership deed NOT obtained 7 7 Account opening documents NOT completed by the holder(s) 11 11 NOT verified employment/source of income (e.g payslip) 36 36

Compliance with banking laws and regulations Banking regulations such as the Banking Act, Central Bank of Kenya Act, Central Bank of Kenya Prudential guidelines govern the operations of banks. These include limits on a variety of areas and also reporting requirements on certain aspects of the banks’ operations.

There are four main areas noted where the bank was not in compliance with the requirements of these regulations i.e. (i) lending limits to single borrowers and their associates, (ii) limits on lending to related parties, (ii) unsecured lending to officers of the bank and their associates, and (iv) foreign currency transactions. The key points are listed below

i) The Prudential Guideline CBK/PG/07 (Section 3.2.3) and Section 11 of the Banking Act prohibit lending in excess of 20% of the institution’s core capital to any one insider and their associates. We noted instances where lending to directors of the bank and companies associated with them are beyond these limits. An example is the lending to companies associated with the Managing Director, Sanjay Shah, which were in excess of 40% of the bank’s core capital and are equivalent to 11% of the entire lending;

ii) The lending above also exceeds the limits of 25% of core capital imposed by Section 10 of the Banking Act on facilities to single borrowers and their associates;

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iii) The Prudential Guidelines CBK/PG/02 (Section 3.5.2.1) requires directors, chief executive officers and management of a bank to declare any financial interest in customers of the bank in order to reduce or eliminate conflicts of interest. Thereafter such directors or officers should not be directly involved in the bank’s dealings with such customers. The bank has extensive dealings with the Kingsway Group and Creative Innovations Limited in which some directors have an interest. Based on our review of information provided, there was also evidence that the disclosures made by the directors to CBK on their other directorships were not complete. There are numerous companies with which some directors are associated, which have not been disclosed in their submissions to the Central Bank of Kenya (“CBK”).

iv) Section 11 of the Banking Act and Section 3.5.2.7 of CBK/PG/02 prohibits directors, chief executive officers and management from granting any advances, loans or credit facilities which are not fully secured to any of its officers, significant shareholders or their associates. We noted instances where loans to officers and their associates are unsecured.

v) CBK has issued ‘Guidelines on Foreign Exchange’ that require banks to report any transaction above US $50,000 and to retain documentary evidence for those transactions. We were not provided, for our review, with copies of these returns other than for those made in 2006;

vi) CBK has issued Guidelines on Foreign Exchange that require banks to retain documentary evidence for those transactions in foreign currency amounting to more than US$ 10,000. We noted numerous instances of transfers of US $ 10,000 and below by a single customer to a single beneficiary on the same day indicating an intention to split such transactions to avoid maintenance of records or reporting transactions above US $ 50,000 as required by CBK;

vii) From the review of the returns to CBK for 2006, we noted an incomplete return relating to some funds transferred from the Lion Club of Ethiopia account. We have reviewed transactions in the Lion Club of Ethiopia account and noted other unusual/ suspicious transactions;

viii) The bank had about 150 accounts which, although denominated in Kenya Shillings had almost all transactions in them in foreign currencies. Most of these accounts were closed in 2004 and new accounts opened for the same customers in the respective foreign currencies. Although the account balances were in shillings, we noted that there were regular revaluations of the balances indicating that the intention of the bank was to retain foreign currency value. It is therefore possible that returns made to the CBK on the currency positions were misleading and did not include these types of accounts.

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Unusual transactions and accounts which indicate unusual operations of the Bank

There is evidence of irregular banking practices based on our review of customer accounts. During our investigations, we noted a number of transactions that appeared unusual and for which we recommend further investigation. Instances noted include the following:

i) We noted numerous cases where certain customers engaged in regular large cash transactions that are considered unusual. There were unusually large cash withdrawals and deposits which may indicate an intention to conceal the true source or beneficiary of the payments made. The supporting debit vouchers and deposit slips were not detailed enough to show to whom the cash was paid or from whom deposits were received;

ii) We noted a pattern of transactions involving a web of related accounts held at the bank which may indicate an intention to conceal the true source or beneficiary of the payment made. For example:

− there are several parties making payments directly or indirectly to accounts in the name of Paolo Sattanino and an entity called Capricorn SRL (no account opening details are available for these accounts), who in turn make payments overseas to various parties. We have identified a number of companies involved in this web, including Kingsway Mart and Creative Innovations. It is not clear what the transfers relate to. The amounts involved are sometimes significant and are explained in greater detail in section 5.2 of the report. We recommend that these payments be investigated further to establish their nature and rule out irregularity.

− A certain Dilpun Shah acts on behalf of several companies which have a link to payments made to Paolo Sattanino.

iii) We have noted that the bank is using a sundry creditors account for processing payments from or to customer accounts. Some of the payments debited to customer accounts such as the Prajapati account as ‘cash withdrawals’ were traced to the sundry creditors account. There is also evidence that loan repayments for a loan granted to Parmex Limited, originated from the Sundry creditors account. There is no evidence where the funds came from or whether these were indeed genuine loan repayments. It is possible that the sundry creditors account has been used to conceal transactions between accounts. It is also possible that cash may not have moved as recorded, or cash may not actually have moved into/ out of the bank.

iv) Unusual loan accounts/transactions. In addition to the Parmex Limited loan transaction discussed above, we have noted other examples, such as the Sailesh Prajapati account, where loan accounts have been credited with amounts described as “loan proceeds” or “transfers” from unexplained or unrelated accounts.

v) There are large inward and outward telegraphic transfers which are unsupported. These are repatriation and receipt of funds to or from sources and purposes that we could not ascertain.

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As explained before, we were unable to obtain supporting documents for most foreign currency transfers. Examples of some of the large transactions noted for which no support has been provided include the following:

− Crucial Properties Limited – Shs 2 billion received in January 2001 and its subsequent transfer from the receiving account;

− Kariuki Muigua Client Account – Shs 312 million received from Crucial Properties Limited in February 2001. The funds were withdrawn within a week and paid to other parties;

− Kingsway Tyres Limited – there were several large cash and telegraphic transfers in September, October and November 2005.

− Various foreign currency transactions by Paolo Sattanino.

vi) Some accounts were opened, operated and closed within an unusually short period of time indicating that they were opened to facilitate specific transactions only;

vii) There were some unusually high “insurance premium” payments to an insurance company overseas for individual endowment policies debited from the Kingsway Tyres account CA 01-000795. The supporting documents showed some discrepancies;

viii) There were instances where an account holder used cheques issued in another account’s name to transact business in his account. This was done by manually altering the account name and number on the cheques. Most of the transactions done in this manner were described as cash withdrawals;

ix) Withdrawals/ transactions were made contrary to or without appropriate account mandates;

x) There was a large number of accounts maintained in Kenya Shillings, but having foreign currency transactions, that were closed in April 2004 and replaced by new accounts. The instructions to close the old accounts and to open new ones were not made available;

xi) We noted a number of fixed deposit accounts with very unusual transactions. These were fixed deposit accounts that had a history of debit balances. The debit balances would reverse in due course through unusual entries and would eventually turn into credit balances.

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23 Know your customer “KYC” procedures

Banking best practice requires banks to gain an understanding of the customer’s identity and their source of funds among other things. CB has developed some KYC procedures that require prospective customers to supply certain information and to complete account opening forms which are then approved before an account can be opened. We however noted that these procedures are largely ignored. Some of the discrepancies are as follows:

i) Missing account opening forms - Contrary to the requirement that every new customer of the bank completes a standard account opening form detailing information about the individual or the entity, most accounts are not supported by either account opening forms or customer instructions. Of the 1,004 accounts we sampled for review, there were no account opening forms or customer instructions for 839 accounts (representing 217 relationships). These have been summarised under Appendix I;

ii) Where the account opening forms were available, we noted numerous instances where the information on the forms was incomplete. The forms require the customer to provide details about the account to be opened. Once this form is reviewed, the appropriate bank official signs it as an indication that the customer’s request has been accepted and an account can be opened. Details missing included the following:

− Certificate of incorporation, memorandum and articles of association for corporate customers;

− Trade licenses − Resolutions of directors to open an account with Charterhouse Bank; − Address verification documents such as utility bill, or bank statements;

We have summarised in Appendix II the accounts where these details were missing;

iii) The bank requires its new customers to obtain references from existing customers of the bank. However, we noted instances where potential customers did not obtain such introductions but instead a bank official noted “known to the bank” in that field. No bank official has signed the form to confirm this on behalf of the bank;

iv) There were instances where appropriate bank officers had not approved the account opening forms. We have summarised examples noted where the appropriate approvals are missing. See Appendix II;

v) The KYC procedures require that copies of documents supplied be certified as “True copies of the original”. We noted instances where copies had not been certified;

vi) We noted files where the credit history was not up to date. Examples are overdraft accounts whose facilities have expired and there was no evidence of follow-up since there were no recent correspondences between the bank and the customer;

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vii) Accounts without postal or physical addresses

The postal or physical addresses of the following customers from our sample were not recorded as expected.

Account Name Account type Account No

Kenya Catermart Limited FX 01-400142

Maniben Meghji Shah FX 01-400091

Parmex Limited FX 01-400017

Parmex Limited CA 01-000193

Anandi Vipin Shah CD 01-206954

Sonal Devani FD 01-207285

Lack of postal or other addresses imply the following:

• That the customer does not obtain regular updates of the transactions in that account;

• The accounts may not be genuine. There is a possibility that the companies and individuals mentioned above are not aware of the accounts above.

• The transactions processed in these accounts may be irregular and would call for further investigations.

viii) Accounts using unusual names - opened using initials

Our review revealed accounts as well as beneficiaries whose names appeared to be short forms. Examples include the following:

• An account by the name CIL – whose directors were the same as those operating the account of Creative Innovations Limited;

• A beneficiary by the name PIL receiving payments from Creative Innovations Limited;

• An account by the name D Shah (which may relate to accounts operated by Dilpun Shah);

• An account named S Shah;

• An account named PIVB (whose details we did not obtain).

Other than CIL, we were not provided with the account opening forms for the accounts above. We were therefore not able to confirm other details of these accounts. There were some unusual transactions in some of these accounts.

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34 Compliance with laws and regulations

3.14.1 Requirements of the Banking laws and regulations In accordance with the terms of reference, we carried out a review of compliance with the various laws and regulations in place during the period under review. The key requirements of the various regulations relevant to this exercise cover a wide range of matters including the following:

i) Corporate governance - The guidelines among other things, apply to the duties, responsibilities and code of conduct for shareholders, directors, chief executive officers and management of the bank. The code of conduct deals with outside financial interests by the directors and insider loans as well as the required disclosures.

ii) Proceeds of crime and money laundering (prevention) - The guidelines deal with methods of prudent customer identification, record keeping, identification of suspicious activities and the need to report such activities to the appropriate authorities for further investigation. The guidelines require that banks report any suspicious transactions to the CBK.

iii) Enforcement of banking laws and regulations; the guidelines deal with the supervisory role of the CBK and the role of the board of directors in ensuring that laws are enforced and weaknesses noted from CBK inspections are acted on.

iv) Foreign exchange transactions - The CBK guidelines require banks to maintain supporting documents for all transactions above US$ 10,000 or equivalent, in addition to the requirement that they report any transaction above US$ 50,000.

v) Prohibited business - This guideline applies to transactions by the bank including insider lending limitations, single borrower limits, requirement to obtain security for any insider lending, and prohibition of reckless and fraudulent activities.

The following were noted from this review:

3.24.2 Returns to CBK Management made available to us the returns made to CBK in 2006. For these returns, we focused on foreign currency transactions to ensure that transactions that required reporting to CBK were appropriately reported. Our review has indicated evidence of non-compliance, especially for transactions above the required reporting threshold of US$ 50,000, and in respect of maintaining documents for transactions above US$ 10,000.

The table below shows details of some transactions which we traced to TT confirmations that were not appropriately reported. For most, no appropriate supporting documents were made available for our review. A number of these transactions were in cash and were not properly supported.

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Date of instructions Amount From Account To Comments

6-Oct-04 US$ 70,000 Details were not available

Details were not available

TT reference per the Amex GL account: TTFX 896

4-Feb-05 US$

200,000

Kingsway and Creative Innovations Limited Tradex Srl

TT reference per the Amex GL account: TT 0117 REM

19-May-06 US$ 68,000 Discounting of cheque from Exel Kenya.

Astral Aviation US$ account 600181

An amount of US$ 59,500 was collected in cash by a Tajmina Mohamed of ID No. 22146232.

19-Jun-06 US$

100,000 Lions Club of Ethiopia US$ a/c 600173

Bank draft in the name of Medisel (K) Ltd

The attached invoice from Medisel (K) Ltd was addressed to Mr Manoj Shah/ Ms. Zahida of Kingsway Tyres & Automart. See Appendix A.

30-Jan-06 US$ 21,000

US$ a/c 600085 of Alloy Steel Castings Ltd

Cempack Ltd US$ retention a/c 600025

No details of what was being paid for were attached

9-May-06 US$ 15,400 Astral Aviation US$ account Not applicable

The amount was collected in cash by Hirji Ramji Patel of ID No. 11447259. This was described as float for flight. However the instructions were stamped received by Charterhouse on 9 Apr 06.

12-May-06 US$ 36,750

Discounting of cheque 000172 from Development Alternative Inc.

Astral Aviation US$ account 600181

Instructions were received by the bank on 13 Jun 06 and Hirji Ramji Patel of ID No. 11447259 was to collect US$ 32,400 in cash against the same cheque.

22-May-06 US$ 22,000 Astral Aviation US$ account 600181 Not applicable

Amount paid in cash to Hirji Ramji Patel of ID No. 11447259.

22-May-06 US$ 22,000 Astral Aviation US$ account 600181 Not applicable

Amount paid in cash to Hirji Ramji Patel of ID No. 11447259. The amount field had been overwritten and not countersigned. The cash was collected on 23 May 06.

31-May-06 US$ 27,400 Discounting of cheque from Tradewinds.

Astral Aviation US$ account 600181

The amount was collected in cash by Hirji Ramji Patel of ID No. 11447259.

For remittances related to the Paolo Sattanino accounts, we noted that they were only supported by electronic mails. See further work under 5.2.2.

3.34.3 Splitting of foreign currency transactions From a review of a sample of customer instructions, we noted instances where single payments were split into several telegraphic transfers. One such instance was through a letter dated 10 January 2005 from Creative Innovations Limited (See Appendix B) requesting the bank to make transfers to various beneficiaries, among them Paolo Sattanino.

The instructions to pay Paolo Sattanino required the bank to remit US$ 90,000 and Euros 19,000 in amounts of less than US$ 10,000 each over consecutive dates.

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Although the value of the transaction is significantly above the US$ 50,000 limit set by CBK for reporting and obtaining supporting documentation from the customer, this seems to have been avoided by splitting the transaction.

The table below illustrates some transfers split under instructions from Creative Innovations in January 2005. We have traced the transfers to the accounts of Paolo Sattanino; CA 01-800145 and CA 01-600006. The customer instructions appear unusual and may be aimed at ensuring that reporting to CBK does not become necessary.

Date Beneficiary US$ Account credited 17-Jan-2005 Paolo Sattanino 10,000 CA 01-600006 18-Jan-2005 Paolo Sattanino 10,000 CA 01-600006 19-Jan-2005 Paolo Sattanino 10,000 CA 01-600006 20-Jan-2005 Paolo Sattanino 10,000 CA 01-600006 21-Jan-2005 Paolo Sattanino 10,000 CA 01-600006 24-Jan-2005 Paolo Sattanino 10,000 CA 01-600006 25-Jan-2005 Paolo Sattanino 10,000 CA 01-600006 26-Jan-2005 Paolo Sattanino 10,000 CA 01-600006 27-Jan-2005 Paolo Sattanino 10,000 CA 01-600006 Total 90,000 Euro 28-Jan-2005 Paolo Sattanino 6,325 CA 01-800145 31-Jan-2005 Paolo Sattanino 6,250 CA 01-800145 01-Feb-2005 Paolo Sattanino 6,425 CA 01-800145 Total 19,000

There were other foreign currency payments made out of Creative Innovations Limited account number 01-000009. These payments also indicated possible splitting of amounts as there were several remittances to a single beneficiary on the same date. We have summarised these in Appendix III.

There were other payments of this nature to Paolo Sattanino from the Kingsway Mart Limited account CA 01-000564.

3.44.4 Insider lending Our review of lending to directors, their associates, and companies related to the directors revealed breaches to the Banking Act. These breaches are summarised below:

• Lendings to Sanjay R Shah and companies associated with him as on 23 June 2006 stood at 40.5%, exceeding the 20% limit set out under the revised guidelines and under Section 11 of the Banking Act;

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• Lendings to Sanjay R Shah and companies associated with him (including his brother, Manoj R Shah) as at 23 June 2006 exceeded the 25% maximum permitted under Section 10 of the Banking Act for any one single borrower;

• The disclosures made to CBK on lending to insiders were incomplete. Since these returns are made by bank officials, the omissions would indicate either negligence or concealment.

The table below shows the lending to Sanjay Shah and associated entities. We have identified the companies, other entities and individuals associated with him below:

Account Name A/C No. Balance at 23.06.06

Shs

Association Relationship %age of core capital

Creative Innovations Ltd 01-800842 15,102,210 Sanjay Shah Director / Shareholder

22.6%

Creative Innovations Ltd 01-800848 1,291,499 Sanjay Shah Director / Shareholder Creative Innovations Ltd 01-800849 1,291,498 Sanjay Shah Director / Shareholder Creative Innovations Ltd 01-800850 15,103,875 Sanjay Shah Director / Shareholder Creative Innovations Ltd 01-000009 64,987,278 Sanjay Shah Director / Shareholder Hameco Ltd 01-000014 1,954,613 Sanjay Shah Director / Shareholder Hameco Ltd 01-301113 230,400 Sanjay Shah Director / Shareholder Hameco Ltd 01-301060 12,986,326 Sanjay Shah Director / Shareholder

Nu Metro (Kenya) Ltd 01-301028 11,526,936 Sanjay, Manoj, Mehraz & Hamed Director / Shareholder

Nu Metro (Kenya) Ltd 03-000046 4,693,469 Sanjay, Manoj, Mehraz & Hamed Director / Shareholder

Cottex Manufacturers 01-000005 2,656,272 Sanjay Shah Director / Shareholder M. R. & S. R. Shah 01-000002 2,249,992 Sanjay Shah, Manoj Director / Shareholder Jamachar (Kenya) Ltd 01-300975 20,994,302 Manoj Shah, Nitin Shah Director

17.9%

Jamachar (Kenya) Ltd 01-301084 4,624,187 Manoj Shah, Nitin Shah Director Jamachar (Kenya) Ltd 01-000156 6,879,712 Manoj Shah, Nitin Shah Director Kings Investments Ltd. 01-300685 2,000,000 Manoj Shah, Nitin shah Director Kingsway Tyres Ltd 01-000761 313,846 Manoj, Nitin & Kamal Director / Shareholder Kingsway Tyres Ltd 01-000109 54,942 Manoj, Nitin & Kamal Director / Shareholder Kingsway Tyres Ltd 01-000795 3,183,500 Manoj, Nitin & Kamal Director / Shareholder Kingsway Tyres Ltd 01-000426 51,644,749 Manoj, Nitin & Kamal Director / Shareholder Kingsway Tyres Ltd 01-300971 16,350,015 Manoj, Nitin & Kamal Director / Shareholder Total 240,119,621 Core capital at 31 March 2006 593,069,000 Total percentage 40.5%

* The table above has been prepared based on information maintained at the bank.

Based on the above table, the bank has not complied with lending limits for insiders set by the Banking Act and there may have been intentional withholding of necessary information from the CBK.

We have included Appendix L showing the Insider lending disclosed to CBK as at 31 March 2006.

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Securities for insider lending

Prudential Guideline CBK/PG/02 3.5.2.7 and Section 11 of the Banking Act prohibit directors, chief executive officers and management from granting any advances, loans or credit facilities which are not fully secured to any of its officers, significant shareholders or their associates. We noted instances where loans to officers and their associates were unsecured.

We reviewed documentation of 25 advances identified as relating to insiders and noted the following:

• We noted instances where advances and instalment agreements were not properly documented. The amounts advanced, the instalments due as well as the guarantee indemnities did not bear the names of the borrower, amounts borrowed and the instalments due.

• There were no customer board resolutions for 13 corporate advances whereas for 7 advances, the board resolutions did not have key details such as the date of the resolution.

• 8 advances did not have any securities, whereas 15 advances did not indicate value of the security;

• For 15 of the related party advances, the were no registered charges (legal charges) for the securities provided;

Appendix IV summarises the results of tests carried out with regards to insider lending.

We have included examples of incomplete securities documentation as Appendix C.

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45 Transactions with related parties

4.15.1 Deposits by the directors of the bank and their families Our review of deposits from directors, shareholders, their associates, and companies related to them revealed that they contributed at least 24% of the total bank’s deposits as at 23 June 2006.

We have noted a number of unusual deposit accounts as discussed further under Section 5.11.1 which are associated with the directors and their families. These may need to be investigated further to confirm that they exist and are accurate.

The table below summarises deposits by the directors of the bank and their families:

Shareholders/directors, families and associates Associated deposits Shs

Sanjay Shah 111,843,722 Manoj Shah 61,572,080 Manish Shah 15,127,757 Nitin Shah 14,633,402 Mehraz, Hamed Ehsani & family 97,724,859 Shah & Ehsani joint accounts 94,912,949 Atul Shah 66,457,008 Kingsway Tyres/ Motors/ Properties 11,953,265 Yellowstone Enterprises Limited 4,083,917 Nu Metro Kenya Limited 101,000 Magnolia 37,210,248 Hameco 15,420 Jamachar Kenya Limited 589,864 Market Masters Limited 2,085,201 Nairobi Mineral Water Co. Limited 22,932 Kamal R Shah 10,276,970 Greenhills Investment Limited 260,651 Fresh n Juici Limited 1,000,000 Nakumatt Holding / Investments 174,324,380 Total 704,195,625 Total Deposits 2,942,648,725 Percentage 24%

4.1.15.1.1 Accounts operated by the Kingsway group Kingsway Tyres & Automart Limited, Kingsway Tyres Limited, Kingsway Motors Limited and Kingsway Investments Limited are companies related through common directorships and common shareholding. The companies have operated and still continue to operate numerous accounts with CB.

The relatively low balances in these accounts as shown in the table below are in contrast to the high turnover experienced within the accounts during the past few years.

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The table below summarises the accounts the Kingsway group of companies operated as at 23 June 2006 when the bank was put under statutory manager.

Accounts with credit balances as at 23 June 2006 Type of Account A/c no. Currency Customer Name Balance Shs

CA 01-000007 Shs Kings Investments Ltd. 716,445 CA 01-000008 Shs Kingsway Properties Ltd 603,141 CA 01-000012 Shs Kingsway Tyre & Automart Ltd 36,720 CA 01-000145 Shs Kingsway Tyres Ltd, Mombasa Branch 537,374 CA 01-000348 Shs Kingsway Tyres Ltd - Corner Plaza 468,982 CA 01-000425 Shs Kingsway Tyres Ltd( Piranha Centre) 127,517 CA 01-000560 Shs Kingsway Tyres Ltd -Village Market 78,896 CA 01-000673 Shs Kingsway Tyres Ltd - Downtown 214,672 CA 01-000690 Shs Kingsway Tyres Ltd-Classic Tyre Centre 227,816 CA 01-000777 Shs Kingsway Tyres Ltd - Nakuru 59,535 CA 01-000794 Shs Kingsway Tyres Ltd - U - W -Branch 1,931,663 CA 02-000717 Shs Kingsway Tyres Limited-Petty Cash A/C 63,320 CA 09-000004 Shs Kingsway Tyres Kisumu 304,919 CA 10-000130 Shs Kingsgate Enterprises Ltd 10,500 FD 01-205388 Shs Kingsway Tyre & Automart Ltd 117,942 FD 01-205475 Shs Kingsway Motors (K) Ltd 3,023,602 FD 01-205479 Shs Kingsway Tyre & Automart Ltd 3,024,854 CA 01-600182 US$ Kingsway Tyres Ltd-University Way Branch USD 13,498 CA 01-700226 GBP Kingsway Tyres Ltd-University Way Branch GBP 1,000

Accounts with debit balances as at 23 June 2006 Type of Account A/c no. Currency Customer Name Balance Shs

CA 01-000109 Shs Kingsway Tyres Limited(Funzi Rd) 54,942 CA 01-000426 Shs Kingsway Tyres Ltd(University Way) 51,644,749 CA 01-000761 Shs Kingsway Tyres Limited - Eldoret 313,846 CA 01-000795 Shs Kingsway Tyres Ltd- Recovery A/C 3,183,500 LN 01-300685 Shs Kings Investments Ltd. 2,000,000 LN 01-300971 Shs Kingsway Tyres Ltd-University Way Branch 16,350,015 Total advances 73,547,052

The turnovers of three accounts which were sampled for detailed review are summarised below;

A/c no. Customer Name Type Debit turnover since opening

of account Shs

Date account was opened

Balance at 23-Jun-06

01-000564 Kingsway Mart Limited CA 1,800,000,000 2-April-2004 Closed 01-000426 Kingsway Tyres Limited CA 2,943,610,545 6-May-2003 (51,644,749) 01-000012 Kingsway Tyres & Automart Ltd CA 3,923,881,639* Prior to 1999 36,720 * Turnover relates to the period from 1 January 1999 to 23 June 2006.

As noted in Section 5.5 of this report, our review of transactions in the three accounts above indicated unusual transactions for which we recommend further investigation. In addition, further investigations are recommended to establish whether a relationship exists between the level of

PricewaterhouseCoopers Project Fabio 18 Report to the Statutory Manager, Charterhouse Bank “Under Statutory Management”

turnover in the bank accounts above and the revenue turnover reflected in the statutory accounts of these companies.

4.1.25.1.2 Nakumatt Holdings Limited - CA 01-000085 Nakumatt Holdings maintained three accounts as at 23 June 2006; a call deposit account, a US$ current account and a shilling current account. The shilling current account CA 01-000085 was the most active.

The review of this account showed very substantial credits on a regular basis. We understood from enquiry with management that the practice is for Nakumatt to deposit its collections into its Barclays accounts and then transfer to CB those funds required to settle suppliers’ liabilities. We however noted the following matters that appeared unusual and which require further investigation:

i) We noted that during the period between May 2003 and October 2003, an amount of Shs 3.6 million was transferred to the Prajapati account on a weekly basis. There were 22 such transfers totalling Shs 79.2 million for which no supporting documentation was available as these were said to have been destroyed in a fire in September 2004. The transfers have been summarised in the table below:

Date Description per account Cheque No. Shs 2-May-03 Chq S. Prajapati Pd 169265 3,600,000 9-May-03 Chq. Sailesh Pd 169266 3,600,000 16-May-03 Chq Sailesh 169267 3,600,000 23-May-03 Chq. Sailesh Prajapati 169268 3,600,000 30-May-03 Chq. Sailesh Prajapati 169269 3,600,000 6-Jun-03 Chq Sailesh Pd 169270 3,600,000 13-Jun-03 Chq S. Prajapati Pd 169271 3,600,000 20-Jun-03 Ch Q S. Prajapati Pd 169272 3,600,000 4-Jul-03 Chq S. Prajapati Pd 169273 3,600,000 11-Jul-03 Chq Sailesh P Pd 169274 3,600,000 18-Jul-03 Chq Sailesh P Pd 169275 3,600,000 25-Jul-03 Chq Sailesh Pd 169276 3,600,000 1-Aug-03 Chq Sailes Pd 169277 3,600,000 8-Aug-03 Chq Sailesh Pd 169278 3,600,000 15-Aug-03 Chq S. Prajapati Pd 169279 3,600,000 22-Aug-03 Chq Sailesh Pd 169280 3,600,000 29-Aug-03 Chq Sailesh P Pd 169281 3,600,000 5-Sep-03 Chq Sailesh P Pd 169282 3,600,000 12-Sep-03 Sailesh P Pd 169283 3,600,000 19-Sep-03 Chq Sailesh P Pd 169284 3,600,000 3-Oct-03 Chq Sailesh P Pd 169285 3,600,000 13-Oct-03 Chq S. Prajapati Pd 169286 3,600,000

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ii) We also noted that in December of the same year, large transfers were made to the Prajapati account from the Nakumatt account for which no support was provided. These are as per the table below:

Date Description Shs 29-Dec-2003 Trf CA 01-000148 30,000,000 30-Dec-2003 Trf CA 01-000148 20,000,000

iii) On 20 December 2005, a single debit transfer of Shs 120 million was made from the Sundry Creditors account SC 01-600000 to the Nakumatt account CA 01-000085. On the same day, another debit transfer of Shs 12 million was made. No support was provided for these transactions. These are shown in the table below:

Date Description Shs 20-Jan-05 chq no. 000540 Nakumatt Holdings 12,000,000 20-Jan-05 chq no. 001261 Nakumatt Holdings 120,000,000

iv) We noted a cheque of Shs 6 million which was signed by one signatory contrary to the mandates

documented. The cheque used to make this withdrawal had alterations on its face that were not counter-signed. The alterations related to blotting out the name of the account on the face of the cheque as well as the account number and replacing them with Nakumatt details. We have included a copy of this cheque as Appendix D.

v) There were regular payments to the Fresh an Juici account of Shs 6.5 million on a regular basis for which we did not see any standing instructions. Between April 2005 and April 2006, Shs 286 million had been transferred in this manner.

We have classified these transactions as unusual and requiring further investigation as it is not clear what the bases of the transactions are, or because we identified irregularities in the accounts to/ from where payments were made.

4.1.35.1.3 Greenhills Investments Limited The company has an active current account whose directors include Manish and Manoj Shah who are brothers to the bank’s managing director, Sanjay Shah. Other directors are Mehraz Ehsani and Hamed Ehsani both of whom are also directors of the bank. The company is involved in property business and other financial assets, and we understand it owns the Village Market Complex in Gigiri, Nairobi.

There were several large or unusual transactions, in respect of which we were not provided with appropriate supporting documents, as summarised below.

Date Ref Description Shs

24/09/2002 Misc. Credit 42,945,000 24/12/2002 TRF to Abbas Ehsani (98,000,000) 30/12/2002 27340 Local Cheque Deposit 98,000,000

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Date Ref Description Shs

19/08/2003 CHQ 2259 Sent for Clearing Re 25,000,000 29/11/2003 Trf CFC bank 90,000,000 11/05/2006 1 Local Cheque Deposit 33,000,000 01/09/2003 Cash Paid (5,000,000) 17/11/2003 Cash withdrawal (4,500,000) 22/12/2003 Cash withdrawal (4,500,000) 22/12/2003 Cash withdrawal (5,500,000) 23/12/2003 Cash Trf (6,200,000) 23/12/2003 Cash Trf (7,500,000) 08/01/2004 Cash withdrawal (5,000,000) 09/02/2004 Cash Withdrawal (5,000,000)

4.1.45.1.4 Lions Club of Ethiopia CA 01-600173

Documents provided showed that Lion Club of Ethiopia opened an account with the bank on 20 April 2004. As per the documents, the customer was introduced by Mr Manoj Shah. The following gaps were identified:

• The documentation relating to the opening of the account was incomplete as there were no resolutions by the trustees (or equivalent) of Lions Club of Ethiopia to open the account

• We noted a transfer of GBP 400 from this account to Miss Priyum Shah (National Westminster Bank Plc), a daughter of Manoj Shah. See Appendix E for the details.

• We noted a payment of US$ 30,200 paid in cash to Helen Kadri Bandi - ID 13370468 on 19 May 2006. The payment instructions were not in the institution's letterhead but rather comprised an invoice from Medisel (K) Ltd. On 15 June 2006, another US$ 10,000 was paid to Eunice Wairimu Wambugu - ID 9256544 without instructions from Lion Club of Ethiopia.

We sampled a few transactions from the account to check whether they were properly supported:

Date Transaction Description

USD Work Done

DR/ (CR)

20-May-05 Chq No. 13371 (39,033) No supporting document availed

25-May-05 Transfer 38,500 Transfer to CA 610 which belongs to Lions club of Ethiopia. Seen instructions signed by Zaida Sadik to sell the dollars @Ksh 76/$

21-Jun-05 BCHQ 60 issued 20,000

Seen instructions dated 20 Jun 05 to prepare a draft to Medisel Ltd as payment for purchase of medicine. The invoices are dated February 2005 and total to Ksh 13M

28-Nov-05 Transfer 10,000 No supporting document availed

29-Nov-05 Transfer 50,000 No supporting document availed

2-May-06 Chq no. 14644 realised (116,633) No supporting document availed

19-Jun-06 Bchq 330 issued 100,000 No supporting document availed

22-Jun-06 TTFX 4181 Rem 741.23 This related to TT4181 from Lions Club of Ethiopia to transfer GBP 400 to Miss Priyum Shah (National Westminster Bank Plc)

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56 Unusual transactions and accounts which indicate abnormal operation of the bank

5.16.1 Cash transactions We noted that the bank had customers who were making withdrawals in cash that we considered to be high and/ or unusual. These transactions appeared to have no commercial substance as these customers would deposit material sums described as cash deposits which would be followed by full withdrawals on the same day.

The transactions were considered unusual due to the following:

• The cash withdrawals were high, averaging Shs 1 million

• Some of the accounts operated almost entirely on a cash basis for both deposits and withdrawals

• The accounts had very high activity on some particular days during which large sums of money would be deposited and withdrawn

The table below shows some of the accounts that exhibited the above characteristics. There are numerous other accounts with such transactions which are described in the following sub-sections.

Account Name Account No.

Account Type

Kingsway Tyres Ltd- Recovery A/C 01-000795 CA

M. R. & S. R. Shah 01-000002 CA

Nisha & Pushpa Shah 01-100149 SB

Kitek (7) Ltd, Kahawa 01-000396 CA Mitesh & Manish N Shah 01-100009 SB

Meshack Ngare Ondieki 04-000006 CA

Naina Manish Shah 01-100416 SB

Pacific Systems Ltd 01-000207 CA

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5.26.2 Webs of related accounts

5.2.16.2.1 Companies related by transaction During our review of customer accounts, we noted accounts that have similar patterns of transactions.

These accounts include:

Account Name Account No. Account Name Account No.

Fones Direct CA 01-000461 Capricorn SRL FX 01-400093/ 8 Phones Direct CA -1-000515 Creative Innovations CA 01-000009 Intra Market Trading CA 01-000420 Kingsway Mart limited CA 01-000564 Panorama Imports CA 01-000518 Paolo Sattanino 01-400145,

01-800145, 01-400006 & 01-600006

Brand Imports CA 01-000167/613 Paul Mburu 02-000463 Triton Petroleum CA 01-000352 Cargo Distributors 02-000540 Cashline Forex Bureau CA 05-000014

Transactions in these accounts have pointed to payments of cash that ends up in either Paolo Sattanino’s account or at Paramount Bank Limited. These payments are summarised as follows:

• The transactions in these accounts indicate that cash is paid from the Fones Direct & Phones Direct accounts into Intra Market Trading. From this account, the cash is then transferred to Cashline Forex Bureau. The bureau then makes a transfer to Paramount Bank Limited;

• Brand Imports, Triton Petroleum, and Panorama Imports make transfers to Cashline Forex Bureau account before it is transferred to Paramount Bank Limited. Brand Imports also makes transfers to the Capricorn account;

• Kingsway makes payments to Paul Mburu who then makes transfers to Cargo Distributors who in turn makes a transfer to Paolo Sattanino. Kingsway also makes direct transfers into the Paolo Sattanino account;

• Creative Innovations makes payments to both the Paolo Sattanino and the Capricorn accounts;

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The credit balances in the Paolo Sattanino and Capricorn accounts are then transferred out of the country through telegraphic transfers without supporting documents other than e-mail correspondence from Paolo Sattanino. Some of the beneficiaries to which these funds are transferred include the following:

i) Ettore Longo in Italy

ii) Hilda in Italy

iii) Tradex SRL

iv) Capricorn SRL

v) Parmex Limited directly or through Paolo Sattanino

vi) Others are Abdi and J Nyaga

Further investigations are required to understand why these funds are transferred and who the ultimate beneficiaries are.

See Appendix V for further description of these relations.

5.2.26.2.2 Paolo Sattanino CA 01-600006, 01-800145, 01-700154 and FX 01-400006, 01-400145, 01-400154

Paolo Sattanino, based in Italy, is a customer of the bank who, over the years, has operated a number of accounts at the bank. Paolo Sattanino’s account opening forms were not made available for our review. We however noted that the accounts under this name received funds from other customers of the bank. The account was credited on a regular basis with funds from various customer accounts.

We noted the following anomalies in regard to this account:

• A number of companies and individuals such as Creative Innovations Limited, Brand Imports Limited, Aua Industria Limited and Suresh Shah regularly transfer funds to Paolo Sattanino and Capricorn SRL accounts in lots of US$ 10,000 or Euro equivalent. Refer to Section 3.3 for examples with regards to transaction splitting.

• There was e-mail correspondence from Paolo Sattanino directing the bank to transfer money through telegraphic transfers outside the country. The transfers were not supported by relevant documentation as required for transfers whose value is above US$ 10,000. Refer to Appendix VI for money transferred from Paolo Sattanino’s accounts.

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• We noted instances where Paolo gave instructions to the bank to transfer funds but to indicate the remitter as a different entity or individual. This would amount to falsifications of the declarations made and the bank would be guilty of facilitating false declarations. For some of these transfers, the TT confirmations supporting the transactions were not made available. These have also been summarised as part of Appendix VI.

• There are indications of possible account splitting to avoid providing documentation in support of the transactions by ensuring that the values were at US$ 10,000 or less.

• For some of the sampled transactions in the Paolo Sattanino accounts, customer instructions were not provided for our review. These have also been summarised in Appendix VI.

We have included some e-mail correspondences in respect of these accounts under Appendix F.

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5.2.36.2.3 Dilpun Shah Group During the course of our work, we noted various accounts that appeared to be operated by one person. There were transactions in these accounts that linked them to a certain Dilpun Shah. A number of payments made from these accounts related to overseas payments through the accounts of Paolo Sattanino.

The deposit slips into these accounts appeared to share the same handwriting pointing to the possibility that these accounts were being operated by one person or by a small group of people. See Appendix G.

We have reviewed transactions in the accounts that appear related and have presented the accounts graphically below:

Phones Direct

CA 515

Dilpun Shah Govindji

Lakhamshi

Aniket Property &

Investments Ltd CA 771

Global Brands K

Ltd CA 766

Fones Direct

CA 461

D Shah

CA 374

Trenz Kenya Ltd

CA 712Panorama

Imports CA 518

V Market Choice K Ltd CA 429

Lexus Stationers CA 160

Phonelink Ltd CA 509

Brand Imports CA 613

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Formatted: Bullets and Numbering5.36.3 Odesys Enterprises account CA 01-000740 Odesys Enterprises is a sole proprietorship account that was opened by a Mr. Felix Odemba Nabuko whose address was indicated as P.O. Box 25 Butere, Maramba, Shibembe. The account was opened on 25 Aug 2005 and the account opening forms contain no details regarding his business.

The account opening forms indicate that Felix was introduced to the bank by an existing customer of the bank, a Mr. Dilpun Shah. Our reviews revealed that Dilpun is a director of Brand Imports, Fones Direct and Phones Express all of whom had accounts at the bank as at 23 June 2006.

Over the 10 months’ period to 23 June 2006, the account’s turnover was Shs 554,842,767 debits and Shs 566,256,592 credits. The account also had significant cash deposits accompanied by withdrawals of similar amounts on the same day. These transactions appear to have no commercial rationale and are inconsistent with a business operating from Butere. The following matters were noted:

• The turnover is high for a trader in Butere and the account needs to be investigated further for tax compliance;

• A majority of the transactions are in cash which is unusual especially for a business in Butere, in Western province where the bank has no branch operations;

• There were significant cash payments on particular dates, pointing to the possibility that the account was being used for other purposes.

The table below shows a sample of some of the transactions recorded in the account showing cash receipts and payments.

Account CA 01- 000740 in the name of Odesys Enterprises

Date Reference Description as per the customer statement

Shs

Dr/ (CR) 19/09/2005 0 Cash pd chq 3586 3,470,250 19/09/2005 0 Cash recd (6,001,125) 26/09/2005 3589

Cash pd 3,360,000 26/09/2005 3588 Cash pd 4,000,000 26/09/2005 3587 Cash pd 4,367,400 26/09/2005 0 Cash recd (6,070,300) 03/10/2005 0 Cash recd (3,612,550) 03/10/2005 0 Cash paid chq no. 000 4,842,500 12/01/2005 0 Cash pd 10,060,000 16/01/2006 0 Cash pd 4,090,000 16/01/2006

0 Cash pd 4,700,000 16/01/2006 0 Cash pd 5,475,000 16/01/2006 0 Cash pd 5,475,000 17/01/2006 Trf chq dep (3,330,500)

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Date Reference Description as per the customer statement

Shs

17/01/2006 Trf chq dep (4,326,325) 17/01/2006 Trf chq dep (4,464,890) 09/02/2006 84 Cash pd 4,033,000 09/02/2006 82 Cash pd 4,500,000 09/02/2006 83 Cash pd 4,600,393 06/03/2006 Trf chq dep (4,273,000) 06/03/2006 Trf chq dep (4,273,750) 20/04/2006 0 Cash pd 7,200,000 29/05/2006 Cash pd chq no. 3,005,000 29/05/2006 Cash pd chq no. 3,900,000 29/05/2006 Cash pd chq no. 4,090,000

5.46.4 Use of sundry creditors account The bank maintains a sundry creditors account in its general ledger. A review of this account indicates that it is used for various kinds of transactions. These include the following

• Call and fixed deposits, once matured are credited into this account before being paid out to depositors;

• Upcountry cheques are also posted through this account until they clear at which point they are posted into the customer account;

• Cash transfers from branches to the head office are also posted into this account

• We have also noted instances where transactions described as ‘cash withdrawal’ were traced to this account pointing to the possibility that there were no actual cash withdrawals.

The first three transaction types above would be normal in a sundry creditors / clearing account, where amounts are expected to clear within a short period. However, our concern is that this account may be used to mask other transactions, in particular transfers between customer accounts. From the above, we propose that any further investigation should also include a detailed review of this account to establish the nature of transactions recorded in it.

5.4.16.4.1 Sailesh Prajapati – Account CA 01 -000148 The account was opened on 8 January 1999 and closed on 2 August 2004. There are no account opening forms and there were no details of the mandates to operate the account within the banking system. We were therefore unable to establish the background details relating to this account.

During this period, the account debit turnover was Shs 2.2 billion. We were also not able to establish the signing mandates on the account because the transaction records were not made available.

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From our detailed review of the account, we noted some transactions we considered unusual as described below.

i) Amounts debited into this account as ‘cash withdrawals’ were traced to the Sundry creditors account No. 01-600000 in the general ledger. Cash may have never left the bank although the entries in the account are described as if cash was paid out;

ii) Numerous transactions of exactly the same amounts. There were over 1,300 cash deposits of Shs 1 million each out of 1,570 total credits during the period. Of the remaining credits, Shs 105 million was received from Nakumatt in 28 equal transactions of Shs 3.76 million each;

iii) Other unusual transactions were made of what was described as loan proceeds from other accounts whose relationship with the Prajapati account we were not able to confirm.

iv) All the Shs 1 million deposits mentioned above were in cash, which is unusual for a trading account.

v) The account has numerous credits described as cash receipts. Based on the ‘cash withdrawals’ traced to the sundry creditors account, the ‘cash receipts’ may also not relate to actual cash received.

The table below shows some of the credits into the account described as ‘loan proceeds’ and which may require further investigations.

Date Description Shs 28/11/2003 Loan proceeds From Ln 651 20,000,000 10/03/2003 Loan proceeds Ln 530 7,000,000 10/03/2003 Loan proceeds Ln 529 20,000,000 11/03/2003 Loan proceed Simon W.Ln 531 5,000,000 11/03/2003 Loan proceed J Mishra Ln 532 15,000,000 12/03/2003 Loan proceed Ibrahim Gacwe 8,000,000 12/03/2003 Loan proceed Subas Shas-3005 25,000,000 10/06/1999 ***Loan advance Tfr: Ln-01-300092 15,000,000 25/01/1999 To cash 16,000,000 29/12/2003 Cash withdrawal 3,389,743 29/12/2003 Cash withdrawal 6,462,429 29/12/2003 Cash withdrawal 7,119,805 29/12/2003 Cash withdrawal 10,882,629 12/03/2003 Cash withdrawal 11,000,000 11/03/2003 Cash withdrawal 14,500,000

Transacting business in cash throughout the history of the account is considered unusual. We recommend that further investigations are carried out.

PricewaterhouseCoopers Project Fabio 29 Report to the Statutory Manager, Charterhouse Bank “Under Statutory Management”

A review of the sundry creditors account however shows entries described as reversals for some of these transactions. These ‘reversals’ however are not reflected on the Sailesh account pointing to the possibility that the descriptions are misleading.

The table below contains examples of such entries in the Sailesh Prajapati account as traced to the sundry creditors’ account:

Date Shs Description 29-Dec-2003 24,464,864

These amounts have been traced to the Sailesh Prajapati account CA 01-000148 as ‘cash withdrawals’. 30-Dec-2003 16,016,000

05-Feb-2004 7,358,000

27-Feb-2004 3,693,562

02-Mar-2004 2,990,625

05-Feb-2004 7,358,000

16-Aprl-2004 4,215,000

28-May-2004 5,072,000

01-Jul-2004 5,358,000

14-Jul-2004 16,811,080

24-Aprl-2004 6,586,000 This amount per the Sundry creditors account was Shs 500,000 less.

26-May-2004 5,658,000 This amount per the Sundry creditors account. was Shs 1 million less at Shs 4,658,000.

5.56.5 Unusual loan accounts

5.5.16.5.1 Parmex Limited The company’s account opening forms indicated that the company was incorporated in England. However, the mailing address was marked as PO Box 25172 Dubai, U.A.E c/o Parmar Gen Trading Co. The details of the company’s introduction to the bank to facilitate the account opening were not clear as the forms were simply marked ‘known to the bank’.

During August 2004, the company obtained a loan LN 01-300793 of Shs 23 million. This loan was repaid within 2 months as per the details in the table below:

Date Transaction Shs Work done 27-Aug-04 Loan proceeds 23,000,000 Advance file requested but not provided. 14-Oct-04 Instalment (4,000,000)

We traced the debits in the Sundry creditors account no. SC 01-600000. The credits in the sundry creditors account have ‘cash received’ as the description. Both the debits and the credits were on the same day.

18-Oct-04 Instalment (4,000,000) 21-Oct-04 Instalment (4,000,000) 25-Oct-04 Instalment (4,000,000) 27-Oct-04 Instalment (4,000,000) 5-Nov-04 Instalment (3,282,030)

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PricewaterhouseCoopers Project Fabio 30 Report to the Statutory Manager, Charterhouse Bank “Under Statutory Management”

We recommend this account for further investigations due to the following reasons:

i) We traced the corresponding entries of the instalment repayments to the sundry creditors account no. SC 01-600000. This is considered unusual since repayments would either be cash/cheque deposits or transfers from another of the customer’s accounts.

ii) We traced the movement of the above instalments to the Kingsway Mart Limited account CA 01-000564 from where transfers were made to the Sundry creditors account SC 01-600000.

iii) The unusually speedy repayments of the loan raise queries as to the source of the cash since loans are generally repaid over a longer period of time. This is especially so if taken in the context of the credits coming from the sundry creditors account to clear the loan.

iv) The loan agreements and other correspondences with this customer were not made available to us.

We have also noted that in August 2004, the Parmex current account CA 01-000193 received a credit of Shs 23 million from the loan account LN 01-300793 discussed above. Within four days of this receipt, Shs 22.7 million was debited from this account and described as ‘cash paid’. No supporting documents were made available by the time of writing this report.

We have summarised these transactions in the table below:

Date Transaction Shs Work done 27-Aug-04 Loan proceeds (23,000,000) Received from LN 01-300793

27-Aug-04 Cash paid 6,110,636

No supporting documentation were made available.

30-Aug-04 Cash paid 1,000,000

30-Aug-04 Cash paid 7,000,000

31-Aug-04 Cash paid 8,569,744

5.66.6 Large transactions and inward and outward telegraphic transfers which are unsupported

We have reviewed the general ledger nostro accounts as well as those recorded in customer account statements with a view of establishing the nature of large transactions recorded and ascertaining whether large foreign currency transactions were reported to CBK. From this review, we noted the following matters:

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PricewaterhouseCoopers Project Fabio 31 Report to the Statutory Manager, Charterhouse Bank “Under Statutory Management”

5.6.16.6.1 Crucial Properties Limited Crucial Properties Limited is a company incorporated in Kenya. As per the documents reviewed, the company is described as having interest in property business. Although, the company has maintained bank accounts since January 2001, the account opening forms were dated 24 April 2006. The mandates to operate the accounts give Humphrey Kariuki as the only signatory.

The board resolutions authorising the company to operate an account at CB was dated 24 April 2006. The resolution referred to A/C CA 01-000300 and CA 01-600067, which are accounts in the name of Crucial Properties Limited. However, there was no mention of A/C FX 01-400067 and FX 01-400070 which were also in the name of the company, but have since been closed.

5.6.1.16.6.1.1 Crucial Properties Limited - A/C No. FX01-400067 This account was opened and operated in 2001 during which period there was a large credit of Shs 1.9 billion. These funds were then transferred or paid out between January and May 2001. As at the time of writing this report, supporting documents had not been made available for our review. The details of these transactions have been captured in the table below:

Since no documentation was availed for these transactions, we could not verify the payments neither could we confirm that these were reported to CBK. We understand that these documents were lost in a fire in September 2004

Date Transaction Description Shs Work Done DR/ (CR)

19 Jan 2001 TT US$ 24,998,785 – Temuco Foundation (1,949,905,230)

No supporting documentation availed for the transaction

22 Jan 2001 TTFX 1044 37,052,028

26 Jan 2001 Cash Paid 7,878,000

27 Jan 2001 Converted to Shs 7,842,822

03 Feb 2001 Amount transferred to Crucial Property A/C no 2 390,000,000

Amount transferred to Crucial Property A/C no. 2 (FX 01-400070)

25 April 2001 Revaluation – April 2001 (77.5) 9,602,020 Revaluation of Kenya Shilling to ensure that the US Dollar equivalent is maintained.

10 May 2001 Demand Drafts 1545-1569 1,418,250,001

The amount relates to demand drafts issued for US$ 18,300,000. However, no supporting documentation availed for the transaction. Please also refer to section 5.6.1.4 below.

11 May 2001 Transfer of US$ 700,000 to A/C CA 01-000300 54,600,000

Transfer of US$ 700,000 to current A/C CA 01-000300.

5.6.1.26.6.1.2 Crucial Properties Limited A/C 2 – A/C FX 01-400070

This account was opened in February 2001 and operated for 3 weeks after which it became dormant until its closure in April 2004. The account received a single credit of Shs 390 million from account Fx 01-400067 (see 5.6.1.1 above).

Within three days of receipt of this cash, Shs 312 million was transferred to a lawyer’s account, Kariuki Muigua & Co Advocates Client Account 2. (see 5.6.2.2 below).

Since no documentation was availed for these transactions, we could not verify the payments neither could we confirm that these were reported to CBK.

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PricewaterhouseCoopers Project Fabio 32 Report to the Statutory Manager, Charterhouse Bank “Under Statutory Management”

The table below analyses the main transactions in this account:

Date Transaction Description DR/ (CR) Shs Work Done 03 Feb 2001 Amount transferred from A/C 01-400067 (390,000,000) Amount transferred from A/C FX 01-400067

03 Feb 2001 Various DDs

21,672,096

Issue of various demand drafts. However, no supporting documentation availed for the transaction.

06 Feb 2001 Transfer to CA 01-000300 3,872,500 Amount transferred to CA 01-000300

06 Feb 2001 To Kariuki Muigua Client account 312,000,000 Amount transferred to Kariuki Muigua Client A/C No.2 (A/C FX 01-400069)

13 Feb 2001 Sale of US$ 500,000 39,000,000

Sale of US$ 500,000/-. However, no supporting documentation availed for the transaction.

5.6.1.36.6.1.3 Crucial Properties Limited A/C 2 – A/C CA -01-000300 This account was opened in February 2001 and turned dormant after May 2001. The credits into this account seem to have originated from the Shs 1.9 billion account. The table below shows how the cash was paid out to various parties.

Since no documentation was availed for these transactions, we could not verify the payments neither could we confirm that these were reported to CBK.

Date Transaction Description Shs Work Done DR/ (CR)

06 Feb 2001 US$ 50,000 from FX 01-400070 (3,872,500) Amount transferred from CA 01-000300

13 Feb 2001 B/CQ favouring V.K. Constructions 2,500,000 No supporting documents availed to us. We understand that these documents were lost in a fire in September 2004.

13 Feb 2001 B/CQ favouring Greencorner Restaurant 3,000,000

13 Feb 2001 B/CQ favouring Wines of the World 35,000,000

13 Feb 2001 US$ 500,000 @ 77.50 (38,750,000)

This looks like the same transaction in A/C FX 01-400070 but at an exchange rate of US$ 77.50 instead of US$ 78

19 Feb 2001 Cashed Cheques 7,890,000

No supporting documents availed. We understand that these documents were lost in a fire in September 2004.

19 Feb 2001 DD1486 CXD & Bal 101,746 (7,925,988)

11 May 2001 B/CHQ G K Williams (Various) 24,000,000

11 May 2001 B/CHQ Airline Supplies 23,100,000

11 May 2001 B/CHQ Green Corner Restaurant 3,000,000

11 May 2001 B/CHQ Kariuki Muigua 3,000,000

11 May 2001 US$ 700,000 (54,600,000) Transfer of US$ 700,000 from FX 01-400067

We recommend further investigations of these transactions as they are large and unusual and we could not obtain supporting documents for them.

5.6.1.46.6.1.4 Proceeds from drafts (Accounts FX 01-400087, FX 01-400086 & FX 01-400090) As noted in the preceding paragraphs on the Crucial Properties Limited accounts, some significant amounts were paid out of these accounts in the form of demand drafts, We did not obtain details of who the beneficiaries were. However, we have noted that some new accounts were opened and credited with amounts described as ‘proceeds of draft’ just about 6 months after the demand drafts totalling Shs 1.4 billion were paid out of the Crucial Properties Limited account No. FX 01-400067.

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PricewaterhouseCoopers Project Fabio 33 Report to the Statutory Manager, Charterhouse Bank “Under Statutory Management”

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The payments of Shs 1.4 billion in the Crucial Properties account had been described as demand drafts, ‘DD’s.

We have summarised three such accounts that we identified in the table below. The entries in these accounts are described as “proceeds from draft” and the amounts are almost equal to some of the drafts issued against the Crucial Properties account.

Account name Account No.

Date account credited

Amount Credited Shs

Wellen International Ltd 01-400087 07-Nov-2001 69,389,310

Wellen International Ltd 01-400090 10-Dec-2001 160,172,353

Wallance Holdings Limited 01-400086 07-Nov-2001 54,572,546

We note the following in respect of these accounts:

• There are no supporting documents for the transactions as the documents are said to have been lost in a fire of September 2004.

• These accounts were opened and closed within a short time indicating that they were operated to achieve some particular purpose;

• The amounts are almost equivalent in value to some individual drafts paid out of the Crucial Properties Limited account No. FX 01-400067 in May 2001,, although we have not been able to match them due to lack of supporting documentation.

It is therefore possible that the payments to these accounts relate to the drafts issued out of the Crucial Properties Limited account. We therefore recommend that these accounts be further investigated and that other accounts opened and operated around November 2001 be included as part of these investigations.

5.6.26.6.2 Kariuki Muigua & Co Advocates

5.6.2.16.6.2.1 Kariuki Muigua & Co Advocates (Clients a/c) – CA 01-000563 During the months of October and November 2005, this account was unusually active and received huge credits described as cash.

‘Cash’ received into this account 26-Sep-05 28-Sep-05 29-Sep-05 26-Oct-05 Receipts in Shs 127,000,000 70,000,000 226,000,000 87,000,000

Payments in Shs out of this account as per the customer account statement Kwikfit Tyres Ltd 40,486,555 21,751,200 79,891,600 28,450,400 Kirkby Tyres Ltd 40,854,700 19,921,100 78,912,400 31,400,000 Yellowstone Ltd 14,465,850 22,720,700 61,306,000 18,175,500

PricewaterhouseCoopers Project Fabio 34 Report to the Statutory Manager, Charterhouse Bank “Under Statutory Management”

Yellowstone Enterprises 18,745,300 - - 8,974,600 K/way - - 7,800,000 - Port Florence Forwarders 4,482,080 - - - Jubilee Tyres Ltd 7,128,305 - - - Subtotals 126,162,790 64,393,000 227,910,000 87,000,500

We have noted that during the dates above, there were transactions of similar amounts to the receipts above in account CA 01-000426 of Kingsway. The transactions may therefore have been transfers between the two accounts. The supporting documentations were not made available. See Section 5.6.3.2 below.

5.6.2.26.6.2.2 Kariuki Muigua & Co Clients A/C No. 2 – A/C FX 01-400069 This account was opened, operated and closed within 1 week in February 2001. The main transaction related to a transfer of Shs 312 million from another account within the bank belonging to Crucial Properties Limited A/C 2 (See Section 5.6.1.2 of the report above)

Date Transaction Description Shs Work Done 06 Feb 2001 US$ 4m from A/C FX 01-400070 (312,000,000) Amount transferred from A/C FX 01-400070.

12 Feb 2001 Sale of US$ 300,000 to cash 23,400,000 No supporting documents availed. We understand that these documents were lost in a fire in September 2004. We have traced transactions on

the same day that are similar to the Kariuki Muigua & Co Clients a/c CA 01-000091.

12 Feb 2001 Sale of US$ 300,000 to cash 23,400,000

13 Feb 2001 Sale of US$ 3,400,000 265,200,000

As shown above, the amounts received were then paid out within two days. No documentation was availed in support of these transactions,See Further work in 5.6.2.3 below:

Further investigations are recommended to establish the nature of these transactions.

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PricewaterhouseCoopers Project Fabio 35 Report to the Statutory Manager, Charterhouse Bank “Under Statutory Management”

5.6.2.36.6.2.3 Kariuki Muigua & Co Clients A/C – CA 01-000091 This account was opened on 6 August 1998 and is still in operation. We noted transactions on the same day as those recorded in Section 5.6.2.2 above indicating that funds were withdrawn from account FX 01-400069. These funds were credited into this account and details are as shown in the table below:

Date Description DR/ (CR) Shs 12-Feb-01 Sale of USD 300,000 @ 77.80 from FX69 (23,340,000) 12-Feb-01 Sale of USD 300,000 @ 77.85 from FX69 (23,355,000) 12-Feb-01 Cash Withdrawal 7,515,000 12-Feb-01 B/Chq FVG Kariuki Muigua A/C 15,000,000 13-Feb-01 USD 3,400,000 @ Shs 77.50 (263,500,000) 13-Feb-01 Cash Withdrawal 18,125,000 13-Feb-01 B/Chq FVG Kariuki Muigua A/C (3531,3538,3532,3533) 128,000,000 13-Feb-01 B/Chq FVG G K Williams (3536 & 3537) 50,000,000 13-Feb-01 B/Chq FVG Crescent Constructions (3529 & 3530) 80,000,000

22-Feb-01 B/Chq FVG G K Williams (3661, 3658, 3666, 3663, 3664, 3660, 3665, 3659 & 3662)) 90,000,000

22-Feb-01 Cancelled B/Chqs 3531/2/3 (100,000,000)

From the table above, the following can be noted;

• On 12 February 2001, Shs 46,695,000 was received into this account and Shs 22,515,000 was paid out. The following day, 13 February 2001, Shs 263,500,000 was received (equivalent of US$ 3,400,000) and Shs 276,125,000 paid out;

• The payments noted above comprised the following: Shs 140 million was described as payments to a GK Williams, Shs 80 million was described as paid to Crescent Constructions; and Shs 128 million was shown as payments to Kariuki Muigua, out of which Shs 100 million was reversed on 22 February 2001;

• The description in the Kariuki Muigua & Co Clients A/C No. 2 – A/C FX 01-400069 shows the debits as if they were sale of currency. This could be misleading and may have been aimed at concealing the actual transfer from one account to another. There may be a link with the amounts transferred out of the Crucial Properties Limited account

• The funds that were credited into this account were paid out almost immediately through what are described in the account as bankers cheques or cash withdrawals.

We recommend further investigations to establish the nature of these transactions, especially on the two days above.

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PricewaterhouseCoopers Project Fabio 36 Report to the Statutory Manager, Charterhouse Bank “Under Statutory Management”

5.6.36.6.3 Kingsway Motors Group Our review of the deposits and advances of the bank showed that a significant portion of the deposits and advances were to companies associated with the directors of the bank. One such relationship is Kingsway Motors Limited whose managing director is Manoj Shah, a brother to the bank’s managing director, Sanjay Shah. Manoj Shah is also a director of the bank.

The activities of the various accounts revealed some unusual transactions for which further investigations are recommended. We have summarised some of the transactions that we considered unusual.

5.6.3.16.6.3.1 Kingsway Mart Limited – CA 01-000564 This account had credit turnover of Shs1.8 billion since it was opened on 2 April 2004 to the time the bank was placed under statutory management on 23 June 2006. A detailed review of the account shows some high value transactions on certain days. A summary of some of these transactions is shown below:

Date

Transaction value Shs

Type

Description

28-Sep-2005 64,393,000 Credit The credits were described as cash received. 26-Oct-2005 88,500,500 Credit The credits were described as cash received. 26-Oct-2005 80,480,000 Debit Shs 65,750,000 described as cash paid while Shs 14,730,000

was a cheque payment 10-Nov-2005 32,750,000 Debit Constituting four debits described as miscellaneous debits

each of Shs 8million. 11-Nov-2005 25,160,000 Credit The credits were described as cash received constituting two

credits of Shs 10 million and another for Shs 5 million. 11-Nov-2005 5,805,100 Debit Constituting one debit described as cash paid 26-Nov-2005 10,000,000 Credit A single credit described as cash received. 13-Dec-2005 8,000,000 Debit Constituting 2 debits described as cash paid, Shs 1million and

Shs 7 million. 14-Dec-2005 11,098,500 Debit Constituting one debit described as cash paid 16-Dec-2005 8,500,000 Credit A single credit described as cash received. 22-Dec-2005 14,500,000 Credit Constituting Shs 7,500,000 ‘cash received’ and the remainder

made of ‘transfers’. 23-Dec-2005 6,195,066 Debit Constituting 2 debits described as cash paid. 23-Dec-2005 15,000,000 Credit Shs 8.5 million described as ‘transfer’, the balance is

described as ‘Kirby Tyres, Shs 4.5 million; and Kwik Fit Tyres, Shs 2 million.

29-Dec-2005 18,434,400 Credit A single credit described as transfer to K. Muigua.

The transactions above have been considered unusual due to the following:

• There are unusually high cash payments and cash deposits

• Some dates have high deposits and withdrawals such as 26 October 2005.

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PricewaterhouseCoopers Project Fabio 37 Report to the Statutory Manager, Charterhouse Bank “Under Statutory Management”

5.6.3.26.6.3.2 Kingsway Tyres Limited – CA 01-000426 This account had credit turnover of Shs 2.9 billion since it was opened on 6 May 2003 to the time the bank was placed under statutory management on 23 June 2006. A detailed review of the account shows some high value transactions on certain days. A summary of some of these transactions is shown below:

Date Transaction value Shs

Type Description

26-Sep-2005 127,000,000 Debit A single debit described as ‘transfer of cheque deposit’ 26-Sep-2005 127,269,490 Credit Two entries described as ‘transfers’ of Shs 53.6 million and Shs

73.7 million. 28-Sep-2005 70,000,000 Debit A single debit described as a transfer of cheque deposit. 28-Sep-2005 40,000,000 Credit A single entry described as a loan advance transfer ref: 01-

300971. We traced this credit to the loan account in the name of Kingsway Tyres Ltd – University Way which was opened on the same date.

29-Sep-2005 226,000,000 Debit A single debit described as a cheque deposit ref# 2074 29-Sep-2005 227,290,534 Credit Two entries described as ‘transfer’ of Shs 102.6 million and Shs

124.6 million. 30-Sep-2005 9,000,000 Debit A single debit described as a transfer to a/c 01-000012 in the

name of Kingsway Tyres & Automart Limited. 30-Sep-2005 6,300,000 Credit A single credit described as miscellaneous credit. 6-Oct-2005 11,097,000 Debit A single debit described as ‘TTFX 1112 REM’. Documents in

support of telegraphic transfers (TTs) for October 2005 were not availed for our review by the time of preparing this report.

11-Oct-2005 9,581,000 Debit A single debit described as ‘TTFX 1121 REM’. Documents in support of telegraphic transfers (TTs) for October 2005 were not availed for our review by the time of preparing this report..

26-Oct-2005 22,000,000 Debit A single debit described as a cheque deposit ref# 2189. 26-Oct-2005 65,000,000 Debit A single debit described as ‘cash paid’. 26-Oct-2005 22,079,264 Credit A single credit described as a ‘transfer’. 26-Oct-2005 65,725,000 Credit A single credit described as a ‘transfer’. 28-Oct-2005 13,000,000 Credit A single credit described as a ‘trf chq deposit’. 31-Oct-2005 8,173,000 Debit A single debit described as ‘TTFX 1214 REM’. Documents in

support of telegraphic transfers (TTs) for October 2005 were not availed for our review.

11-Nov-2005 41,119,500

Debit This is made up of two entries: Shs 32.7 million ‘trf cheque deposit’ and Shs 8.3 million ref ‘TTFX 1267 REM’.

11-Nov-2005 5,805,101 Credit A single credit described as cash received. 16-Nov-2005 7,535,000 Debit A single debit described as a ‘transfer’.

These transactions have been considered unusual due to the following:

• There are transactions of almost similar amounts in another account belonging to Kariuki Muigua & Co. Advocates. This indicates that the transactions described as cash may have been transfers and not actual cash. See Section 5.6.2.1 for further details.

• The transactions are of very high value in nature and are around the same period (September and October 2005).

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• Most of the transactions are described as cash paid/ deposits which is unusual since they are very high-value transactions to be conducted in cash.

5.6.3.36.6.3.3 Kingsway Tyres & Automart Limited – CA 01-000012 This account was in operation prior to 1 January 1999. The debit turnover for the period 1 January 1999 to 23 June 2006 was Shs 3.9 billion analysed in the table below:

Year Debit turnover Shs

1999 868,378,156 2000 773,876,406 2001 863,564,827 2002 787,460,965 2003 513,041,670 2004 112,510,445 2005 4,226,528 2006 854,073 Total debits 3,923,913,070

The table below shows some transactions that may have been split and therefore recorded as separate transactions.

Kingsway account CA 01-000012 – unusual transactions

Date Transaction value Shs Type Description

27-Feb-2001 11,000,000 Debit Two entries of Shs 5 million and 6 million respectively described as ‘reversal entry’. There were no corresponding credits for these amounts in the month of February 2001.

28-Feb-2001 11,519,000 Debit Two entries of Shs 5,019,000 and 6.5 million respectively described as ‘reversal entry’. There were no corresponding credits for these amounts in the month of February 2001.

11-April-2001 8,314,697 Debit A single entry described as ‘cash withdrawal’ 28-Dec-2001 12,000,000 Credit Constitutes of four cash deposits of Shs 4 million, Shs

3million (twice) and Shs 2 million. 07-Jan-2002 35,419,948 Debit A single entry described as transfer of $447,768+ charges 11-April-2002 13,870,593 Debit Two entries of Shs 6.4 million and 7.4 million respectively

described as cash withdrawal. 30-May-2002 13,800,000 Debit Two entries described as ‘cash withdrawal’ of

Shs 6.4 million and Shs 7.4 million. 02-Aug-2002 21,651,109 Debit A single entry described as transfer of ‘TT 2082405 $

274,621 @ 78.84 09-Oct-2002 8,394,180 Debit A single entry described as transfer of ‘US$ 105,701

Parmex’. 18-Dec-2002 28,000,000 Credit Constitutes of four cash deposits of Shs 10 million, Shs 7

million, Shs 6 million and Shs 5 million. 19-Dec-2002 21,900,000 Credit Constitutes of two entries described as ‘cash deposits’ of

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Date Transaction value Shs Type Description

Shs 10 million and Shs 11.9 million. 01-Aug-2003 11,553,773 Debit A single entry described as ‘cash withdrawal’ 14-Aug-2003 7,671,500 Debit A single entry described as ‘cash withdrawal’ 15-Jan-2004 3,040,000 Debit A single entry described as transfer to ’Manoj Shah Lions

a/c’. 18-Feb-2004 3,837,500 Debit A single entry described as ‘ttfx 0117 rem Parmex part

payment’ 20-Feb-2004 3,842,500 Debit A single entry described as ‘ttfx 0117 rem Parmex part

payment’ 23-Feb-2004 3,841,500 Debit A single entry described as ‘ttfx 0141 rem Parmex part

payment plus charges’ 24-Feb-2004 3,072,000 Debit A single entry described as ‘part payment tt0141 rem

Parmex’ 25-Feb-2004 3,072,000 Debit A single entry described as ‘part payment tt0141 rem

Parmex’ 27-Feb-2004 3,072,000 Debit A single entry described as ‘balance part payment tt0141

rem Parmex’

The debit turnover levels above appear very high especially given that Kingsway held other accounts at the bank during this period.

5.6.3.46.6.3.4 Kingsway Tyres Limited – University Way Branch A/C CA 01-700226 Supporting documents for some large foreign currency transactions were not provided by the time of writing this report. The transactions related to inward and outward telegraphic transfers (TTs) in the Kingsway Tyres Limited account CA 01-700226. We have summarised in the table below the transactions as identified from review of the Nostro accounts ledger statements, the daily transaction journals as well as this Kingsway account.

From the review of this customer account, the following matters were noted:

• An inward TT of GBP 500,000 was received into this account on 25 October 2005;

• On 26 October 2005, there were outward TTs totalling to GBP 500,000. These appear to have been misreported in the CBK returns, described as a payment by Triton although no debit was traced to the Triton accounts held in the bank. The funds seem to relate to the TT received the previous day but declared to CBK as Kingsway loan drawdown.

• On 8 November 2005, an amount of GBP 250,000 was received through the Canara Bank and an equivalent amount was wired out 3 days later.

For these transactions, we could not confirm whether they had been reported to CBK since the returns for these days were not made available.

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A/C Date Transaction Description

GBP Work Done

DR/ (CR) CA 01-700226 25-Oct-05 Inward

TT FIT/614 (500,000) The money came through Canara Bank, one of CB’s

correspondent banks. Since we were not provided with the inward TT confirmation, we reviewed the transaction through the daily activity journal. A corresponding debit was traced to the Canara Bank general ledger (GL) account A/C 01-710001. From copies of returns by the bank and obtained from CBK, Form CBK FXDR, this was described as an inward TT described as a loan drawdown for Kingsway Tyres.

CA 01-700226 26-Oct-05 Transfer – TTFX 1715 (250k) TTFX 1716 (100k) TTFX 1717 (150k)

500,000 The daily transaction report for this day (26 October 2006) and the outward TT files for the quarter ending December 2005 were not made available to us. However, our review of the general ledger Nostro accounts indicated that there were outward TTs on the same day adding up to GBP 500,000 broken down into GBP 100,000, GBP 150,000 and GBP 250,000. We could not establish who the TTs were remitted to as the information had not been available by the time of doing this report. We traced the Credit to the Canara Bank GL A/C 01-710001. From copies of returns obtained from CBK, Form CBK FXDP, this was reported as an outward TT described as payment for petroleum products by Triton Petroleum Co. Ltd.

CA 01-700226 08-Nov-05 Inward TT FIT /653

(250,000) The money came through Canara Bank as evidenced by a corresponding debit in the Canara Bank GL A/C 01-710001. Since we were not provided with the inward TT confirmation, we reviewed the daily activity journal. From copies of returns obtained from CBK, Form CBK FXDR, this was an inward TT described as a loan drawdown for Kingsway Tyres.

CA 01-700226 11-Nov-05 Transfer- TTFX 1734

250,000 A corresponding debit was traced to the Canara Bank general ledger (GL) account A/C 01-710001. We could not establish to whom the TTs were remitted as the TT files and Customer requests were not made available for the entire quarter ending 31 December 2005. From copies of returns by the bank and obtained from CBK, Form CBK FXDP, this was described as an outward TT described as payment for petroleum products by Triton Networks Solutions Ltd.

5.6.46.6.4 American Express Bank, New York - Nostro A/C 01-610000 In our review of transactions carried out by the bank through their correspondent banks, we identified significant transfers into and out of these accounts. Our efforts to review these transactions were not successful. This was due to the following:

• The internal documentation for 26 October 2005 during which a lot of large transactions took place was not provided. The documents missing included the customer instructions, the telegraphic transfers and the daily transaction journal for 26 October 2005,;

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• The Nostro bank statements were also not provided and we could therefore obtain external evidence of the transmission instructions

During the two days in October 2005, we also noted large transfers into and out of one of the Kingsway Tyres Limited GBP account (See 5.6.3.4 for further details).

The table below shows transactions obtained from the American Express Bank Nostro account in New York. Some dollar inflows on the 25 October 2005 appear to have been transferred out the following day.

Date A/C Transaction Description

DR/ (CR) US$

Work Done

25 Oct 2005 NO 01-61000 Purchases of USD

60,000 We were not provided with any documentation relating to these transactions. From copies of returns obtained from CBK, Form CBK FXDR, this was a purchase of currency from Bank of Africa Kenya Limited

25 Oct 2005 NO 01-61000 Purchases of USD

140,000 We were not provided with any documentation relating to these transactions. From copies of returns made to CBK, Form CBK FXDR, this was a purchase of currency from Fina Bank Limited

26 Oct 2005 NO 01-61000 Outward TT – TTFX 1191

(60,000)

We were not provided with any documentation relating to these transactions. We could not establish to whom the TTs were remitted as the TT files and Customer requests were not available for the quarter ending 31 December 2005. From copies of returns made by CB and obtained from CBK, Form CBK FXDP, this was a TT from Kingsway for import of tyres.

26 Oct 2005 NO 01-61000 Outward TT – TTFX 1192

(140,000) We were not provided with any documentation relating to these transactions. We could not establish who the TTs were remitted to as the TT files and Customer requests were not available for the quarter ending 31 December 2005. From copies of returns made by the bank and obtained from CBK, Form CBK FXDP, this was TT from Kingsway for import of tyres. This transaction was reported as one together with TTFX 1192 above as US$ 200,000.

02 Dec 2005 NO 01-610000 Inward TTFX 1373

(1,000,000) We were not provided with any documentation relating to these transactions. From copies of returns made by CB and obtained from CBK, Form CBK FXDP, this was a placement with Bank of Africa although the reference made in the Nostro account describes the transaction as a TT and not a placement.

We recommend that further investigations be conducted to ensure that the foreign currency transfers in the last quarter 2005 were appropriate and were reported to the CBK.

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5.6.56.6.5 Canara Bank Limited - Nostro A/C 01-710001 From our review of the Canara Bank account, we requested but did not obtain details of the sample indicated in the table below.

Date Transaction Description

GBP Work Done

26 Sep 2005 TTFX 1693 1,008,548

We were not provided with any documentation relating to this transaction. From copies of returns made by the bank and obtained from CBK, Form CBK FXDP, this was a TT by Triton Petroleum for payment of petroleum

29 Dec 2005 TTFX 1776 150,000

We were not provided with any documentation relating to this transaction. From copies of returns made by the bank and obtained from CBK, Form CBK FXDP, this was described as a payment to Fina Bank as an inter-bank sales

29 Dec 2005 TTFX 1772 230,000

We were not provided with any documentation relating to this transactions. From copies of returns made by the bank and obtained from CBK, Form CBK FXDP, this was a described as a payment to Fina Bank as an inter-bank sale. This transaction was declared as part of the TTFX 1776 above and aggregated as GBP 380,000.

We cannot confirm that these transactions are regular and recommend that CBK reviews the returns for the banks mentioned in these returns, Fina Bank Limited and Bank of Africa Limited to confirm that the transactions were confirmed by the other banks.

5.76.7 Accounts opened, operated and closed within a short time We noted that some accounts were opened and closed within a very short period. These accounts appeared to be operated for a specific reason and would be closed immediately that purpose was achieved. See table below for accounts of this nature.

Accounts opened, operated and closed within a short time

Account No. Type Account name Turnover Shs

Date opened

Date closed

01-000339 CA Kariuki Muigua & Co,

Office a/c -nil- No transactions

01-400069 FX Kariuki Muigua & Co, Office a/c

312,000,000 06-Feb-01 13-Feb-01

01-000298 CA Crucial Properties Limited

3,900,000 27-01-01 27-01-01

01-600272 Ca Anuj & Smita Shah US$ 31,223 05-May-06 12-Jun-06 01-400073 FX PIVB 44,995,736.80 24-Aprl-01 25-Jun-01 02-000686 CA Island Forex Bureau

Limited 6,760,699.87 07-Aprl-05 22-July-05

02-800503 CA Island Forex Bureau Limited

Euro 14,780.07 27-Jun-05 22-July-05

01-800098 CA Capricorn S.R.L Euro 79,421.36 7-Feb-03 1-Aprl-04 01-400145 FX Paolo Sattanino 28,705,103.40 16-Dec-03 1-Aprl-04 01-400154 FX Paolo Sattanino 23,455.80 9-Mar-04 1-Aprl-04

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Account No. Type Account name Turnover Shs

Date opened

Date closed

01-400017 FX Parmex Ltd 29,280 21-Jul-99 22-Aug-99 01-400157 FX Africa Spirits Ltd 12,327,562.60 01-Mar-04 2-Aprl-04 01-000737 CA Aua Industria Ltd (Proj.

A/C) 4,715,039.27 08-Sep-05 17-Oct-05

01-600179 CA Kingsway Tyre & Automart Ltd

US$ 580 20-Aug-04 6-Sep-04

01-203781 CD Rahul Dilesh Bid -nil- No transactions 01-201488 FD Proudview Investments -nil-

01-201493 FD Proudview Investments -nil- 01-000626 CA Hotel Sirikwa Limited 62,628,987.95 30-Jul-04 12-Nov-04

We requested for the instructions by the customer to close these accounts but none were made available to us. The transactions processed in the short period during which the accounts existed are unusual and we recommend further investigations. See also Section 5.10 for other examples of accounts operated for a short period.

PricewaterhouseCoopers Project Fabio 44 Report to the Statutory Manager, Charterhouse Bank “Under Statutory Management”

5.86.8 Payments for insurance premiums We noted that there were significant transfers of foreign currency from the Kingsway accounts which were described as settlement of insurance premiums for the directors and their families. The documents used to process these payments did not appear to be from the insurance company as we noted the following:

• The amounts being transferred do not agree with the premium documents supporting the payments in respect to the premium payable.

• The name of the insurance company was written in short form on what should be official documents;

• The premium documents were not on the letterhead of the insurance company;

The details of the payments are summarised as below;

From Account; To account Date of instruction

GBP Other details/comments

Kingsway Tyres Ltd Lcl Int Life Ass Com Ltd 12-Jan-06 9,000 For policy 20012733 - Ashit P Shah

Kingsway Tyres Ltd Lcl Int Life Ass Com Ltd 17-Jan-06 6,500 For policy 20004719 -Nitin M Shah

Kingsway Tyres Ltd Lcl Int Life Ass Com Ltd 17-Jan-06 6,500 For policy 20004718 - Nitin M Shah

Kingsway Tyres Ltd Lcl Int Life Ass Com Ltd 17-Jan-06 6,500 For policy 20004715 - Nitin M Shah

Kingsway Tyres Ltd Lcl Int Life Ass Com Ltd 17-Jan-06 17,000 For policy 20007933 - Manish R Shah

Kingsway Tyres Ltd Lcl Int Life Ass Com Ltd 19-Jan-06 8,500 For policy 20004935 - Manoj R Shah

Kingsway Tyres Ltd Lcl Int Life Ass Com Ltd 19-Jan-06 8,500 For policy 20004950 - Manoj R Shah

Kingsway Tyres Ltd Lcl Int Life Ass Com Ltd 19-Jan-06 8,500 For policy 20004942 - Manoj R Shah

Kingsway Tyres Ltd Lcl Int Life Ass Com Ltd 23-Jan-06 12,000 For policy 20006851- Sanjay R Shah

Kingsway Tyres Ltd Lcl Int Life Ass Com Ltd 23-Jan-06 12,000 For policy 20006829 - Sanjay R Shah

Kingsway Tyres Ltd Lcl Int Life Ass Com Ltd 27-Jan-06 17,000 For policy 20007927 - Manish R Shah

Kingsway Tyres Ltd Lcl Int Life Ass Com Ltd 27-Jan-06 17,000 For policy 20007932 - Manish R Shah

We have included the instructions as Appendix H.

5.96.9 Accounts operated outside their mandates We noted that some accounts were operated without proper mandates. Instances were noted where instructions were received from individuals other than those who are recorded in the system as the proper signatories and there were no records indicating that the persons giving the instructions had any relations to those accounts.

A review of the daily transaction journals showed that on 25 May 2006, Shs 2 million was paid out to Monia Posti from the account of Italian Styles Limited (A/C 01-000249). The support for this transaction was an e-mail correspondence from the CB Mega branch manager to the Operations manager indicating that the amount had been paid out in cash. This indicates that the account mandates were ignored and there is no evidence that the customer actually received the cash.

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Examples of other accounts operated outside the mandates on the system are shown below:

Account Account name Signatories per the system

Source of instructions

CA 01-000085 Nakumatt Holdings Ltd At least two signatories A Shs 6 million cheque dated 31-Dec-2004 signed singly by Atulkumar M Shah.

CA 01-600013 Mehraz Ehsani Mehraz Ehsani JA Duchac See Appendix I CA 01-600061 Mehraz Ehsani Mehraz Ehsani

SB 01-100618 Khatib Ashraf No mandates on system The mandates on the system assist the bank officials to transact business with their customers in the various branches. Failure to have these therefore renders such operations risky and open to abuse.

CA 01-600198 Faranak & Hamed Ehsani No mandates on system

CA 01-000300 Crucial Properties Limited No mandates on system

CA 01-600067 Crucial Properties Limited No mandates on system

CA 01-600070 Crucial Properties Limited No mandates on system

CA 01-000298 Crucial Properties Limited No mandates on system

CA 01-301125 Solutions General No mandates on system

CA 01-600272 Anuj & Smita Shah No mandates on system

CA 05-000014 Cashline Forex Bureau No mandates on system

5.106.10 Alterations to customer instructions We have, during the course of our investigations come across numerous cheques whose details have been altered on the face without being counter-signed. The changes made on the cheques had the potential impact of making the cheques invalid. However, all these changes were accepted by the bank and the transactions processed through the customer accounts. The alterations made related to ‘blacking out’ the name of the drawer and replacing it with another hand-written name.

Once the details of the drawer have been altered, the account number of the customer would also be blacked out and the new account number handwritten. We consider these alterations irregular.

Cheque No

Account Number Name of the original drawer

Cheque issued by

120549 Deleted on the face of the cheque 01-000364

Daewoo Motors International Limited

Account debited is CA – 426 Amount paid to cash is Shs 10k Cheque issued 5 May 2006.

120533 Deleted on the face of the cheque 01-000482

Daewoo Motors International Limited

Kingsway Mart Limited. CA – 795. Amount of Shs 2,000. Instructions on the cheque are to ‘pay cash’.

004617 Deleted on the face of the cheque 01-000482

Ketty Tours Travel & Safaris Limited

Cheque issued by Hon. Ndambuki to self and signed by himself. Amount of Shs 350,000

004611 Deleted on the face of the cheque 01-000482

Ketty Tours Travel & Safaris Limited

Cheque issued by Hon. Ndambuki to self and signed by himself. Amount of Shs 100,000 paid as cash. The cheque was not signed. On the

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Cheque No

Account Number Name of the original drawer

Cheque issued by

back of the cheque, noted as “paid to mama Macharia”.

004616 Deleted on the face of the cheque 01-000482

Ketty Tours Travel & Safaris Limited

Name of drawer changed to Kilimani Motors limited. Paying account is CA – 830

000419 Deleted on the face of the cheque

Phones Direct Name of drawer changed to Kingsway Mart. Amount of Shs 2,000 paid as cash.

000418 Deleted on the face of the cheque

Phones Direct Name of drawer changed to Kingsway Mart. Amount of Shs 15,000 paid as cash.

144908 Deleted on the face of the cheque

Deleted Payment of Shs 5 million cash to Panorama Imports. The cheque was not signed and was therefore honoured outside the operating mandates of the account.

144909 Deleted on the face of the cheque

Deleted Payment of Shs 3.4 million cash to Panorama Imports. The cheque was not signed and was therefore honoured outside the operating mandates of the account.

144910 Deleted on the face of the cheque

Deleted Payment of Shs 2 million cash to Tasara Forwarders. The cheque was not signed and was therefore honoured outside the operating mandates of the account.

Other examples where we could not identify the original cheque number are as below;

Dated New owner/ A/c no. Former A/c Name Shs Payee 28-Jul-05 Yellowstone Enterprises/CA 412 Dobbin Enterprises 143,613 Cash 28-Jul-05 Sounion Enterprises/ CA 566 Dobbin Enterprises 450,000 Aum Apparels 31-Dec-04 Creative Innovations Ltd/CA 206 Pacific Ace Ltd 200,000 Cash 31-Dec-04 Mbwanji Millers/CA 367 Pacific Ace Ltd 190,000 Cash 31-Dec-04 Gideon Ndambuki/ CA 384 Pacific Ace Ltd 70,000 Self 31-Dec-04 Parker Radio Hse/ CA 624 Pacific Ace Ltd 214,450 Cash 25-Feb-05 Kingway Mart/ CA 564 B S Mohindra & Co 7,000,300 Cash 12-Oct-04 William K. Gitau/ CA 44 Sunmatt Ltd 1,000,000 Esther N. Gitau 30-Jul-04 Kustron (K) Ltd/CA 131 CA 1309 600,000 Cash

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Formatted: Bullets and Numbering5.116.11 Foreign currency accounts maintained in Kenya Shillings The bank maintained various types of accounts. Once such account type related to accounts denoted as FX 01-4xxxxx. As of 23 June 2006, there were no accounts denoted in this manner. Our review revealed the following peculiarities in the way these accounts were operated:

• From the samples reviewed, the accounts denoted FX 01-4xxxxx existing as at 1 April 2004 were all closed on that date;

• These accounts were reported in Kenya Shillings but the transactions were recorded in various foreign currencies;

• There were revaluation gains/ losses posted into these accounts periodically;

• Most of the transactions on these accounts were described as cash transactions.

The table below shows examples of these accounts:

Account name Account No. Turnover in Shs Date of opening Date of closure Paolo Sattanino 01-400145 28,705,103 16-Dec-2003 01-Aprl-2004

Paolo Sattanino 01-400006 68,819,192 31-Mar-1999 01-Aprl-2004

Paolo Sattanino 01-400154 23,456 9-Mar-2004 01-Aprl-2004

Capricon SRL 01-400093 53,230,397 29-Jan-2002 31-Dec-2003

Capricon SRL 01-400098 136,961,850 25-Feb-2002 31-Dec-2003

Maniben Meghji Shah 01-400091 1,659,137 28-Dec-2001 28-Jan-2002

Triton Petroleum Ltd 01-400092 867,624,417 29-Dec-2001 01-Aprl-2004

Anjum Chaudry 01-400108 28,992,622 29-Aug-2002 01-Aprl-2004

Kenya Catermart Ltd 01-400142 14,095,678 16-Sep-2003 01-Aprl-2004 Jitendra Shah & Mrs Surbhi Shah 01-400158 1,570,000 23-Mar-2004 01-Aprl-2004

Amar J Shah 01-400159 1,552,000 30-Mar-2004 01-Aprl-2004

Mrs Surbhi Shah 01-400160 1,552,000 30-Mar-2004 01-Aprl-2004

Amar J Shah 01-400161 1,552,000 30-Mar-2004 01-Aprl-2004

Mrs Surbhi Shah 01-400162 1,552,000 30-Mar-2004 01-Aprl-2004

Wellen International Ltd 01-400087 69,389,310 07-Nov-2001 08-Nov-2001

Wellen International Ltd 01-400090 160,172,353 10-Dec-2001 21-Jul-2003

Wallance Holdings Limited 01-400086 54,572,546 07-Nov-2001 08-Nov-2001

P.I.V.B 01-400073 44,995,737 24-Apr-2001 25-Jun-2001

Hamed & Mehraz Ehsani 01-400024 6,223,560 10-Oct-1999 01-Apr-2004

Africa Spirit Limited 01-400157 12,327,562 01-Mar-2004 02-Apr-2004

Newcall Technologies Ltd 01-400001 51,251,171 31-Mar-1999 16-Apr-2003

J D J Malde 01-400030 5,473,175 04-Feb-2000 10-Mar-2000

J D J Malde 01-400031 51,652,714 16-Feb-2000 25-Sep-2001

Nakumatt Investments 01-400046 87,415,000 12-Jun-2000 27-Jul-2000

Mr & Mrs Nathwani 01-400060 34,732,000 27-Sep-2000 13-Oct-2000

Mr & Mrs Nathwani 01-400062 3,697,500 05-Oct-2000 13-Oct-2000

Mr & Mrs Nathwani 01-400063 39,936,919 13-Oct-2000 23-Jan-2001

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Account name Account No. Turnover in Shs Date of opening Date of closure Mr & Mrs Nathwani 01-400064 3,967,500 13-Oct-2000 26-Oct-2000

L Nathwani 01-400065 27,047,424 24-Oct-2000 23-Jan-2001

Kings Investments Ltd 01-400029 17,006,441 31-Jan-2000 07-Feb-2000

Kingsway Investments 01-400037 40,997,221 07-Mar-2000 01-Apr-2004

5.126.12 Matters noted on review of fixed and call deposits

5.12.16.12.1 Fixed deposit accounts with debit balances A review of the history of the bank’s fixed deposit accounts indicates that the running balances of some of the accounts were in debit, which is unusual. We also noted that the roll-over details of the deposits appeared unusual since the entire deposits were being credited to the account repeatedly without being retired. It is not clear whether cash was actually received each time the account was credited. Interest was being credited to these accounts even where their status was in debit.

These unusual scenarios point to the possibility that the deposits may be inaccurate, incomplete, or may not actually exist. It is also possible that such debit balances may have been created to facilitate payments to other accounts or out of the bank. The accounts having this peculiarity mainly relate to directors of the bank and other related companies.

We have summarised some of the accounts which operated as debit balances below. Most of these accounts were eventually turned into credit balances by 23 June 2006. These accounts need to be investigated to establish the following: • Why the opening balances were in debit and when these debit balances arose;

• Why the accounts showed repetitive deposits renewals without the maturing deposits being retired;

• Why, unlike other fixed deposit accounts where a new account is created to facilitate a rollover of a matured deposit, no new accounts were opened for these accounts.

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Fixed and call deposits that operated with debit balances

Type of Account Customer Name A/c no. Debit balance

(1 Jan 2003) Shs FD Sanjay R Shah 01-205196 70,984,029 FD Sanjay R Shah 01-205534 33,623,299 FD Manoj R Shah 01-205905 37,502,980 CD Nakumatt Holdings Limited 01-206626 642,760 CD R.Z. Haria 01-205966 1,768,618 CD R.Z. Haria 01-205968 2,683,684 FD Mina B. Shah 01-205320 15,988,656 FD Mina B. Shah 01-205273 44,308,051 FD Miss Shamim Ehsani & Mr Ankur Shah 01-206391 5,633,774 FD Mr Ankur Shah & Miss Shamim Ehsani 01-206393 4,418,794 FD Mr Ankur Shah & Miss Shamim Ehsani 01-207082 2,711,918 FD Mr Ankur Shah & Mr Homan Ehsani 01-207081 2,169,534 FD Mr Neel Shah & Miss Shamim Ehsani 01-206389 7,608,493 FD Mr Neel Shah & Miss Shamim Ehsani 01-206941 5,967,500 FD Mr Neel Shah & Mr Homan Ehsani 01-207083 2,169,534 FD Mr. & Mrs Arsalan Laloui 01-205290 6,305,198 FD Mrs. Paniben D. Shah & Chandulal D. 01-206874 3,229,500 FD Mrs. Paniben D. Shah & Chandulal D. Shah 01-206910 91,502 FD Mrs. Paniben D. Shah & Chandulal D. Shah 01-207013 69,972 FD Mrs. Paniben D. Shah & Chandulal D. Shah 01-207088 60,230 FD Mrs. Paniben Dharamshi Shah Chandulal

Dh 01-206875 3,855,260

FD Mrs. Suru & Nadeem Sadiq 01-205332 22,021,677 FD Mrudula S Shah 01-206073 2,246,140 FD Mrudula S Shah 01-206564 3,273,060 FD Mrudula S Shah 01-206737 939,402 FD Mrudula S Shah 01-206816 2,163,166 FD Mrudula S Shah 01-207026 2,246,140 FD Mwauco Limited 01-205486 387,695 FD Nakumatt Investments Ltd 01-206549 168,208,891 FD Narmadaben M Shah 01-205518 38,850,508 FD Nisha S Raishi 01-205155 825,299 FD Nisha S Raishi 01-205156 4,238,223 FD Nisha S Raishi 01-205191 7,620,705 FD Nisha S Raishi 01-205218 1,329,870 FD Nisha S Raishi 01-205593 9,683,223 TOTAL 515,827,285

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5.12.26.12.2 Fixed and call deposit accounts operated and closed without being credited with interest Whereas fixed deposits are ordinarily interest-earning, we noted that some accounts were operated and closed without any interest being credited into them. This would indicate possibilities that not all interest expenses incurred by the bank have been recorded in the past. In addition, the account may have been used for a purpose other than as fixed deposits.

Type of Account A/c no. Customer Name Comment

FD 01-300007 Dalbit Petroleum Limited Closed in September 2004 FD 01-300008 Dalbit Petroleum Limited Closed in April 2005 CD 01-207181 Creative Innovations Limited Closed in October 2005 FD 01-300006 Antony A Kegode No interest since August 2004 CD 01-206954 Anandi Vipin Shah No interest since March 2005

CD 01-206955 Anandi Vipin Shah No interest has been credited since March 2005

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67 Other accounts with unusual transactions

6.17.1 Creative Innovations Limited The shareholders of Creative Innovations Limited are Sailesh K Shah (who is a director of the company together with Kamal R Shah) and Kingsway Investments Limited. Creative Innovations Limited is therefore related to the Kingsway Group.

During our review of the accounts operated by Creative Innovations at CB, we have noted the matters below which may require further investigation:

• Transfers made to Paolo Sattanino account. See Section 5.2.2

• We noted possible splitting of accounts where there were several foreign currency payments made to PIL K Limited; See Appendix III;

• Transfers made to Capricorn SRL account. See Appendix V.

The Creative Innovations account receives most of its credits from the Nakumatt Holdings account CA 01-000085. In 2003, over Shs 136 million was received while Shs 212 million was received in 2004 and Shs 641 million between 1 January 2005 and 23 June 2006.

Nakumatt’s involvement with Creative Innovations and ultimately Paolo Sattanino, whose transactions appear unusual / irregular, needs to be investigated.

6.27.2 Abdul Qadir Alladina and Mohammed Yusuf – CA 07-600807

In February 2006, a US dollar account was opened by Mr Abdul Quadir Alladina and Mr Mohamed Yusuf. The account opening forms indicated the account holders were pensioners, There was an inward telegraphic transfer (TT) of USD 187,392 on 06 March 2006. The TT reference was 167.

On 6 April 2006, a TT (Ref: TTFX 664) of USD 185,000 was transferred through the Amex Nostro A/C to Deutsche Bank Trust Company for the credit of Paramount Universal Bank. The further credit was for Mr Alladina Abdul Quadir, Paramount Bank Westlands Branch. See Appendix K.

There have been very few other transactions in this account subsequently. We recommend further investigations to establish the nature of these transactions.

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6.37.3 Round sum transactions We have noted accounts whose history of transactions show only round sum transactions. This is most unexpected of a trading account and the transactions may therefore not have any commercial rationale. Examples of such accounts are:

Account No. Account name 01-600006 Paolo Sattanino 01-000012 Kingsway Tyres & Automart Limited 01-000563 Kariuki Muigua & Co Advocates – Client account 01-000148 Sailesh Prajapati 01-000352 Triton Petroleum Limited 01-000022 Greenhills Investments Limited

Further examples of such transactions have been included under Section 5. We recommend that further investigations be carried out to establish the nature of these transactions.

6.47.4 Triton Petroleum Company Limited A/C no. 01-000352 We noted various large transfers to Sonal Devani’s accounts (various fixed deposits) from the Triton Petroleum account. We requested for but were not provided with the account opening forms for the Sonal Devani accounts for our review. We also noted that there were no picture and signature images of the customer in the bank’s core operating system Equinox.

For the fixed deposits, we did not obtain any evidence that these were supported by authorisation from the customer. We have listed some of these transfers below:

Date A/C Transaction Description

Shs

Work Done

DR/ (Cr)

19 Oct 2005 FD 01-207187 Transfer

(20,000,000)

Amount transferred from Triton Petroleum Company Limited A/C 01-000352 on the same day.

27 Dec 2005 FD 01-207254 Transfer from A/C 01-000352 (10,000,000)

Amount transferred from Triton Petroleum Company Limited A/C 01-000352 on the same day.

27 Dec 2005 FD 01-207255 Transfer from A/C 01-000352 (10,000,000)

Amount transferred from Triton Petroleum Company Limited A/C 01-000352 on the same day.

27 Dec 2005 FD 01-207256 Transfer from A/C 01-000352 (10,000,000)

Amount transferred from Triton Petroleum Company Limited A/C 01-000352 on the same day.

27 Dec 2005 FD 01-207257 Transfer from A/C 01-000352 (10,000,000)

Amount transferred from Triton Petroleum Company Limited A/C 01-000352 on the same day.

27 Dec 2005 FD 01-207258 Transfer from A/C 01-000352 (10,000,000)

Amount transferred from Triton Petroleum Company Limited A/C 01-000352 on the same day.

28 Dec 2005 FD 01-207260 Opening Deposits

(7,263,950)

Amount transferred from Triton Petroleum Company Limited A/C 01-000352 on the same day.

28 Dec 2005 FD 01-207261 Opening Deposits

(8,810,200)

Amount transferred from Triton Petroleum Company Limited A/C 01-000352 on the same day.

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Date A/C Transaction Description

Shs

Work Done

28 Dec 2005 FD 01-207262 Opening Deposits

(8,925,850)

Amount transferred from Triton Petroleum Company Limited A/C 01-000352 on the same day.

16 Jan 2006 FD 01-207285 Opening Balance

(125,000,000)

No supporting documentation was provided for this transfer. However, we noted that the Shs 124.7 million was paid out from the from the Triton Petroleum Company Limited A/C 01-000352

We recommend that further investigations be carried out on the nature and authenticity of transactions in this account.

6.57.5 Accounts with no entry since their opening We noted accounts which reflect no transactions’ history since they were opened. We have summarised in the table below some of these accounts

Account No. Type Account name 01-000339 CA Kariuki Muigua & Co – Office account 01-100575 SB Benice Mburu 01-201488 FD Proudview Investments 01-201493 FD Proudview Investments 01-400079 FX Nakumatt Holdings Limited 01-400080 FX Nakumatt Holdings Limited 01-400081 FX Nakumatt Holdings Limited 01-400082 FX Nakumatt Holdings Limited

The matters about these accounts that we considered unusual were:

• The accounts above include fixed deposits, which should only be opened once the bank has received a customer deposit receipt. Other accounts are of type FX which have been found to be unusual as discussed under Section 5.

• We were not provided with the customer instructions for the opening of these accounts;

• The accounts are in the names of accounts that have been identified for other unusual transactions;

Formatted: Bullets and Numbering

APPENDIX 1

ADVANCES, CREDIT FACILITES, GUARANTEES AND/OR LIABILITIES TO EMPLOYEES, MANAGERS, DIRECTORS, SHAREHOLDERS AND ASSOCIATES (BANKING ACT SEC. 10 & CBK/PG/07, 3.1) (BANKING ACT SEC. 11 (1) (f) & CBK/PG/07, 3.2) Account Name A/C No. Balance at

23.06.06 Shs

Association Relationship %age of core capital

Creative Innovations Ltd

01-800842 15,102,210 Sanjay Shah

Director/ Shareholder

Creative Innovations Ltd

01-800848 1,291,499 Sanjay Shah

Director/ Shareholder

Creative Innovations Ltd

01-800849 1,291,498 Sanjay Shah

Director/ Shareholder

Creative Innovations Ltd

01-800850 15,103,875 Sanjay Shah

Director/ Shareholder

Creative Innovations Ltd

01-000009 64,987,278 Sanjay Shah

Director/ Shareholder

Hameco Ltd 01-000014 1,954,613 Sanjay Shah

Director/ Shareholder

Hameco Ltd 01-301113 230,400 Sanjay Shah

Director/ Shareholder

Hameco Ltd 01-301060 12,986,326 Sanjay Shah

Director/ Shareholder

Nu Metro (Kenya) Ltd

01-301028 11,526,936

Sanjay, Manoj, Mehraz & Hamed

Director/ Shareholder

Nu Metro (Kenya) Ltd

03-000046 4,693,469

Sanjay, Manoj, Mehraz & Hamed

Director/ Shareholder

Cottex Manufacturers

01-000005 2,656,272 Sanjay Shah

Director/ Shareholder

M. R. & S. R. Shah 01-000002 2,249,992 Sanjay Shah, Manoj

Director/ Shareholder

Jamachar (Kenya) Ltd

01-300975 20,994,302

Manoj Shah, Nitin Shah Director

Jamachar (Kenya) Ltd

01-301084 4,624,187

Manoj Shah, Nitin Shah Director

Jamachar (Kenya) Ltd

01-000156 6,879,712

Manoj Shah, Nitin Shah Director

Kings Investments Ltd.

01-300685 2,000,000

Manoj Shah, Nitin shah Director

Kingsway Tyres Ltd

01-000761 313,846 Manoj, Nitin & Kamal

Director/ Shareholder

Kingsway Tyres Ltd

01-000109 54,942 Manoj, Nitin & Kamal

Director/ Shareholder

Kingsway Tyres Ltd

01-000795 3,183,500 Manoj, Nitin & Kamal

Director/ Shareholder

Kingsway Tyres Ltd

01-000426 51,644,749 Manoj, Nitin & Kamal

Director/ Shareholder

Kingsway Tyres Ltd

01-300971 16,350,015 Manoj, Nitin & Kamal

Director/ Shareholder

Sub-Total 240,119,621 %ge to Core Capital 40.5%

P. J. Mwangi 01-300688 2,103,220 Charterhouse Bank Member of Staff

Grand Total 242,222,841 %ge to Core Capital 40.8% Core capital at 31 March 2006 593,069,000

APPENDIX 2

SECURITY STATUS OF ADVANCES, CREDIT FACILITIES, GUARANTEES, AND LIABILITIES TO EMPLOYEES, MANAGERS, DIRECTORS, SHAREHOLDERS AND ASSOCIATES (BANKING ACT SEC. 11 (1) (c & d) & CBK/PG/07, 3.2 −

A/C Type

Account Name A/C No.

Amount (KShs) Relationship* Security Valuation

Charge / registration

Bank Agreements

Board Resolution

LN Greenhills Investments Ltd.

01-300972 35,000,001 Hamed Ehsani, Mehraz Ehsani

Titles for Nbi/Blk91/133 & 132 in Amili Limited

None Not effected Forms have been signed in blank

Signed in Blank

LN Kamal Properties Ltd

01-300684 1,000,000 Kamal Shah Acc 01-206374 rcpt 7489

1,149,660

Ok - Call deposits receipts held

Forms have been signed in blank

None

CA Kamal Properties Ltd

01-000312 441,000 Kamal Shah Acc 01-206374 rcpt 7489

1,149,660

Ok - Call deposits receipts held

Forms have been signed in blank

None

LN Jamachar (Kenya) Ltd

01-300975 20,994,302 Manoj Shah, Nitin Shah

None None None Forms have been signed in blank

Duly signed and dated

LN Jamachar (Kenya) Ltd

01-301084 4,624,187 Manoj Shah, Nitin Shah

None None None Forms have been signed in blank

Duly signed and dated

CA Jamachar Kenya (Fuchs Oil)

01-000156 6,879,712 Manoj Shah, Nitin Shah

None None None Forms have been signed in blank

Duly signed and dated

LN Kings Investments Ltd.

01-300685 2,000,000 Manoj Shah, Nitin shah

Acc 01-206375 rcpt 7488

2,299,320

None Forms have been signed in blank

None

CA Kingsway Tyres Limited – Eldoret

01-000761 313,846 Manoj Shah, Nitin Shah, Kamal Shah

FD and CD accounts amounting to 73,926,646

73,926,646 Ok - Call deposits receipts held

Forms have been signed in blank

Duly signed and dated

CA Kingsway Tyres Limited(Funzi Rd)

01-000109 54,941 Manoj Shah, Nitin Shah, Kamal Shah

FD and CD accounts amounting to 73,926,646

73,926,646 Ok - Call deposits receipts held

Forms have been signed in blank

Duly signed and dated

CA Kingsway Tyres Ltd- Recovery A/C

01-000795 3,183,499 Manoj Shah, Nitin Shah, Kamal Shah

FD and CD accounts amounting to 73,926,646

73,926,646 Ok - Call deposits receipts held

Forms have been signed in blank

Duly signed and dated

CA Kingsway Tyres Ltd(University Way)

01-000426 51,644,748 Manoj Shah, Nitin Shah, Kamal Shah

FD and CD accounts amounting to 73,926,646

73,926,646 Ok - Call deposits receipts held

Forms have been signed in blank

Duly signed and dated

LN KINGSWAY TYRES LTD-University Way Branch

01-300971 16,350,014 Manoj Shah, Nitin Shah, Kamal Shah

FD and CD accounts amounting to 73,926,646

73,926,646 Ok - Call deposits receipts held

Forms have been signed in blank

Duly signed and dated

A/C Type

Account Name A/C No.

Amount (KShs) Relationship* Security Valuation

Charge / registration

Bank Agreements

Board Resolution

CA Fresh and Juici Ltd

01-000546 7,572,403 Mrs Prabhu Yogini Krishna

Acc 01-207382 rcpt 0986, Acc 01-207447 rcpt 1016, 250k Acc 01-207418 rcpt 1003, 250k Acc 01-207347 rcpt 0969, Debenture on Coy Assets - C. 105413, Directors guarantee

Call Deposits of 1M; debenture of 5M and gurantee of 25M

Ok - Call deposits receipts held and debentures and guarantees are registered

Forms have been signed in blank

Signed in Blank

LN P.J. Mwangi 01-300688 2,103,220 Peter Joshua Mwangi

Lease not singed or registered

None Not effected Forms have been signed in blank

N/A

LBD Creative Innovations Limited

01-800842 15,102,210 Sanjay Shah All Deposit for 18,456,507 Acc 01-205979 for SR Shah rcpt 0833

18,456,507

Not effected Forms have been signed in blank

Signed in Blank

LBD Creative Innovations Limited

01-800848 1,291,499 Sanjay Shah Copy of logbook Toyota station wagon KAH 621N 1300cc

None Not effected Forms have been signed in blank

Signed in Blank

LBD Creative Innovations Limited

01-800849 1,291,498 Sanjay Shah Logbook for AE 100 KAK 538 1300cc

None Not effected Forms have been signed in blank

Signed in Blank

LBD Creative Innovations Limited

01-800850 15,103,875 Sanjay Shah 20M mortgage over creative innovations assets c. 49962

20,000,000

Ok - effected

Forms have been signed in blank

Signed in Blank

CA Creative Innovations Limited

01-000009 64,987,278 Sanjay Shah Hypothecation of assets

Not effected Forms have been signed in blank

Signed in Blank

CA Hameco Ltd 01-000014 1,954,613 Sanjay Shah Log book for KAD 118K Daewoo Racer

None Signed Motor vehicle transfer forms

Forms have been signed in blank

None

HPA Hameco Ltd 01-301113 230,400 Sanjay Shah KAD 307V None Not effected Forms have been signed in blank

None

LN Hameco Ltd 01-301060 12,986,326 Sanjay Shah See above None Not effected Forms have been signed in blank

None

LN Nu Metro (Kenya) Ltd, Prestige Plaza

01-301028 11,526,936 Sanjay Shah None None None None None

CA Nu Metro (Kenya) Ltd, Prestige Plaza

03-000046 4,693,469 Sanjay Shah None None None None None

CA Cottex Manufacturers Ltd

01-000005 2,656,272 Sanjay Shah None None None Forms have been signed in blank

None

A/C Type

Account Name A/C No.

Amount (KShs) Relationship* Security Valuation

Charge / registration

Bank Agreements

Board Resolution

CA M. R. & S. R. Shah

01-000002 2,249,992 Sanjay Shah, Manoj

Acc 01-205888 rcpt 7186

2,998,619

Ok - Call deposits receipts held

Forms have been signed in blank

LN Nairobi Mineral Water Co.Ltd

02-300919 1,899,061 Vipin Shah None None None None None

LN Nairobi Mineral Water Co.Ltd

02-300645 38,797,842 Vipin Shah None None None None None

CA Ukay Estates Ltd

01-000222 956,360 Vipin Shah, Atul shah

Title for LR/No. 209/12829

OMV 20M, MV 15M FSV 11M done in 2001

Ok - Charge effected

Forms have been signed in blank

Duly completed and signed

APPENDIX 3 RECKLESS AND FRAUDULENT TRANSACTIONS (BANKING ACT SEC. 11 (1) (h) & CBK/PG/07, 3.2

Nature of transaction

Summary of transaction

Fictitious Deposit A fictitious deposit certificate for Ksh. 10 million, not supported by funds, was issued to a friend of the managing director in 2000. The friend filed a suit in the High Court against the bank, under unclear circumstances, and the Court ordered the bank to honour its “liability”. This made the bank lose Ksh. 17.22 million, inclusive of interest.

Hotel Sirikwa

Out of a cheque of over ksh. 52 million,, in favour of Hotel Sirikwa, a subject of a court order, ksh. 40 million was hurriedly paid with the assistance of the bank even before it was cleared, despite the bank having been served with the court order.

A purported Loan to a foreign company

A purported loan of $ 60,000 was advanced to Paolo Sattanino’s company, Tradex srl. Whereas funds were transmitted to Paolo, no records of such a loan exist in the bank.

Lions Club of Ethiopia CA 01-600173

. The documentation relating to the opening of the account was incomplete as there were no resolutions by the trustees (or equivalent) of Lions Club of Ethiopia to open the account

. GBP 400 was transferred from this account to Miss Priyum Shah (National Westminster Bank Plc), a daughter of Manoj Shah

. US$ 30,200 was paid from this account in cash to Helen Kadri Bandi - ID 13370468 on 19 May 2006. The payment instructions were not in the institution's letterhead but rather comprised an invoice from Medisel (K) Ltd. On 15 June 2006, another US$ 10,000 was paid to Eunice Wairimu Wambugu - ID 9256544 without instructions from Lion Club of Ethiopia.

. A payment of $ 100,000 from the account to pay Medisel (K) Ltd made against an invoice addressed to Manoj and Ms. Zahida c/o Kingsseay Tyres & Automart.

Loans to Related Parties

Documentation in support of the securities offered for advances to related parties were incomplete. The amount advanced, instalments due, and guarantee indemnities do not bear the names of the borrower, amounts borrowed, or instalments due where appropriate, Domuments signed in blank.

Mehraz Ehasani – Religious Account

Letters originating from Mehraz Ehsani to funds against the account executed by one, Janice A. Duchac

Payments for Insurance Premiums

Transfers of foreign currency from the Kingsway accounts which were described as settlement of insurance premiums for the directors and their families. The amounts transferred did not agree with the premium documents supporting the payments in respect to the premiums payable.

Accounts operated without proper mandates

Instances were noted where instructions were received from individuals other than those who are recorded in the system as signatories to the accounts.

De-Faced Cheques

Numerous cheques which, despite being materially de-faced, were processed, passed, and their monetary transactions posted to completion. The de-facing entailed “blocking out” the name of the drawer of the cheque and the account number and replacing the same with new hand-written names and numbers. Most of the transactions involving de-faced cheques related to unusual transactions majority

being cash withdrawals.

Triton Petroleum Company Limited A/C no. 01-000352

Various large transfers made to personal accounts of one, Sonal Devani’s (various fixed deposits) from the Triton Petroleum account without appropriate authority, There were no account opening forms for the Sonal Devani accounts.

Instructions to debit unrelated accounts

There were several e-mail instructions from Paolo Sattanino to debit other unrelated clients accounts and to transfer funds to himself.

Sundry Creditors Account

. The bank maintained a sundry creditors account in its general ledger which was used for various kinds of transactions including processing payments to and from customers’ accounts. Some of these unusual transactions include the following:

. Loan repayments for a purported loan granted to Parmex Limited, originated from the Sundry creditors account. There is no evidence for the source of these funds. Likewise a purported loan account of one, Sailesh Prajapati received credits described as loan proceeds from unexplained or unrelated accounts.

. Some transactions described as ‘cash withdrawal’ were also traced to sundry creditors account.

APPENDIX 4

NON-DISCLOSED ADVANCES, CREDIT FACILITES, GUARANTEES AND/OR LIABILITIES TO EMPLOYEES, MANAGERS, DIRECTORS, SHAREHOLDERS AND ASSOCIATES (BANKING ACT SEC. 11 (1) (e), (i) Account Name A/C No. Balance at

23.06.06 Shs

Association Relationship %age of core capital

Creative Innovations Ltd

01-800842 15,102,210 Sanjay Shah

Director/ Shareholder

Creative Innovations Ltd

01-800848 1,291,499 Sanjay Shah

Director/ Shareholder

Creative Innovations Ltd

01-800849 1,291,498 Sanjay Shah

Director/ Shareholder

Creative Innovations Ltd

01-800850 15,103,875 Sanjay Shah

Director/ Shareholder

Creative Innovations Ltd

01-000009 64,987,278 Sanjay Shah

Director/ Shareholder

Nu Me`tro (Kenya) Ltd

01-301028 11,526,936

Sanjay, Manoj, Mehraz & Hamed

Director/ Shareholder

Nu Metro (Kenya) Ltd

03-000046 4,693,469

Sanjay, Manoj, Mehraz & Hamed

Director/ Shareholder

Cottex Manufacturers

01-000005 2,656,272 Sanjay Shah

Director/ Shareholder

M. R. & S. R. Shah 01-000002 2,249,992 Sanjay Shah, Manoj

Director/ Shareholder

Jamachar (Kenya) Ltd

01-300975 20,994,302

Manoj Shah, Nitin Shah Director

Jamachar (Kenya) Ltd

01-301084 4,624,187

Manoj Shah, Nitin Shah Director

Jamachar (Kenya) Ltd

01-000156 6,879,712

Manoj Shah, Nitin Shah Director

Kings Investments Ltd.

01-300685 2,000,000

Manoj Shah, Nitin shah Director

Total 153,401,230 Core capital at 31 March 2006 593,069,000 Total percentage 25.86%

APPENDIX 5

PARTICULARS OF SHAREHOLDERS AND DIRECTORS AS REPORTED BY BANK BANKING ACT SECTION 50 (1)

SHAREHOLDER %GE SHAREHOLDING

NAMES O F SHAREHOLDERS

%GE SHAREHOLDING IN COMPANY

ULTIMATE BENEFICIAL SHAREHOLDER

%GE ULTIMATE BENEFICIARY

Ciko Investments Ltd

21.74 P. Bhadra 50 P. Bhadra 10.87

S. Chio 50 S. Chio 10.87

Seiko Investments Ltd

21.74 Sanjay Shah 50 Sanjay Shah 10.87

Kamal Shah 50 Kamal Shah 10.87

Proudview Investments Ltd

21.74 M..W. Prabhu 100 M..W. Prabhu 21.74

Foreman Corpoaration Ltd

21.74 B. Parmar 100 B. Parmar 21.74

Nakumatt Investements Ltd

10 P. Angst 33 P. Angst 3.30

Daniel M. Fleming

33 Daniel M. Fleming

3.30

Bernadette Bopp

33 Bernadette Bopp

3.40

Hamed Ehsani 1.52 N.A. 34 Hamed Ehsani 1.52

Mehraz Ehsani 1.52 N.A. N.A. Mehraz Ehsani 1.52

Total 100 N.A. 100

APPENDIX 6

A TRUST AND OFF-SHORE RELATED COMPANIES BANKING ACT SECTION 13 (1),(3),(4) The diagram below is a presentation of off-shore companies, the off-shore trust, the trustees, and beneficiaries.

BENEFICIARIES• Sanjay Shah & family – 33⅓%• Manoj Shah & family – 33⅓%• Manish Shah & family – 33⅓%

RAM TRUST

FIRST ADVISORY TRUST REG.(Registered in Liechtenstein)

Trustees of Ram Trust

PROUDVIEW INVESTMENTS LTD(Registered in British Virgin

Islands)

Shares issued in favour of First Adv. Trust as trustess of Ram Trust

Shares issued in favour of First Adv Trust as trustees of Ram Trust

Beneficiaries

Bearer shares held by First Adv Trust as trustees of Ram Trust

EPSOM HOLDINGS CORPORATION

(Registered in Liechtenstein)

FOREMAN CORPORATION(Registered in Belize)

CHARTERHOUSE BANK LTD21.74% Shareholding 21.74% Shareholding

It is therefore noted that through the beneficial ownership of the Rum Trust, the Shah family owns over 54% of Charterhouse Bank Limited, with Sanjay Shah owning 25.36% of total capital, in violation of Banking Act Section 13 (1) which restricts ownership by a party to a maximum of 25%.

APPENDIX 7

PARTICULARS OF DIRCTORSHIP AS REPORTED BY THE BANK BANKING ACT SECTION 50 (1)

DIRECTOR’S NAME STATUS OTHER DIRECTROSHIPS

MEHRAZ EHSANI NON-EXECUTIVE

(CHAIRMAN)

• GREENHILLS INVESTMENTS LTD

• HAMECO LIMITED

• MEHRAZ & ASSOCIATES

SANJAY SHAH EXECUTIVE

(MANAGING DIRECTOR)

• GENERAL TYRES SALES

• MOTOR TYRE SUPPLIES

HAMED EHSANI NON-EXECUTIVE • GREENHILLS INVESTMENTS LTD

• HAMECO LIMITED

ATULKUMAR M. SHAH NON-EXECUTIVE • NAKUMATT HOLDINGS LTD

• NAKUMATT INVESTMENTS LTD

MANOJ SHAH NON-EXECUTIVE • KINGSWAY TYRES & AUTOMART LTD

• GENERAL TRYE SALES

MANJUNATH W. PRABHU

EXECUTIVE

(GENERAL MANAGER)

NIL

APPENDIX 8

PARTICULARS OF DIRECTORSHIP AS PER INVESTIGATION FINDINGS BANKING ACT SECTION 50 (1)

APPENDIX 9

SAMPLE OF UNREPORTED AND MISREPORTED FOREIGN RECIPTS AND PAYMENTS – GUIDELINES ON FOREIGN EXCHANGE TRANSACTIONS-SECTION 4 DATE NATURE OF

TRANSACTION AMOUNT COMMENTS

02.09.2005 PAYMENT $320,000 Other records obtained from investigations show that amount was remitted to Barclays Bank PLC London (TTFX0951) for the account of Parmex Limited – Dollar Account No. 77681744. Only $ 175,000 was reported. No documentation to support this transaction.

26.09.2005 PAYMENT $1,340,000 Other records obtained from investigations show that amount was remitted to American Express Bank Limited, Singapore, (TTFX1063) for the account of Sanjay Shah & Others – Account No. 63413, but misreported as a payment for Triton Petroleum Co. Ltd for loan repayment. No documentation to support this transaction.

26.09.2005 PAYMENT $ 961,274.17 Other records obtained from investigations show that amount was remitted to ABN AMRO BANK, N.V. (TTFX1051) for the account of Parmex Limited, but misreported as a payment for Triton Petroleum Co. Ltd for loan repayment. No documentation to support this transaction.

26.09.2005 PAYMENT $ 872,259.57 Other records obtained from investigations show that amount was remitted to ABN AMRO BANK, N.V. (TTFX1047) for the account of Parmex Limited, but misreported as a payment for Triton Petroleum Co. Ltd for loan repayment. No documentation to support this transaction.

19.10.2005 PAYMENT $200,000 Only $170,000 reported and passed to General Ledger. Other records obtained from investigations show that $200,000 was remitted to Unicredit Banca, Italy (TTFX1152) for the account of Tradex SRL. No documentation to support this transaction.

26.10.2005 PAYMENT £100,000 Other records show that amount was transferred through HSBC-London and remitted to SG Hambros Bank and Trust Ltd: Beneficiary being Epson Holdings Corporation, of Account No. 13464300, value date 27.10.2005(TTFX1716). No documentation to support

the underlying transaction.

26.10.2005 PAYMENT $ 60,000 Other records show that amount was remitted to Unicredit Banca, Italy (TTFX1191) for account of Tradex S.R.L. Account No. 10166523, being loan from Charterhouse Bank but no such loan is booked at the bank and no documentation to support the transaction.

26.10.2005 PAYMENT $140,000 Other records show that amount was remitted to Barclays Bank PLC, London (TTFX1192) for the account of Parmex Limited - US Dollar Account No. 77681744, No documentation to support the transaction.

26.10.2005 PAYMENT £250,000 Other records obtained from investigations show that amount was remitted to Barclays Bank PLC London (TTFX1715) for the account of Parmex Limited – Sterling Account No. 13251934. No documentation to support this transaction.

26.10.2005 PAYMENT £150,000 Other records obtained from investigations show that amount was remitted to CitiBank PBG London (TTFX1717) for the Loan Account No. 305723/001, beneficiary being Sanjay Shah.

11.11.2005 PAYMENT £250,000 Other records show that amount was remitted to Citi Bank – London for crediting Sanjay Shah’s loan Account No. 305723/001, value date 14.11.2005(TTFX1734).No documentation to support the underlying transaction.

15.11.2005 RECEIPT $749,965.00 Other records show that amount was received via CitiBank, NA for the account of Themis Investment Ltd – relating to the procurement of ammunition for Malawi Defence Force. No documentation to support the underlying transaction.

22.01.2001 to 11.05.2001

VARIOUS PAYMENTS

$24,998,785 On 19th Jan. 2001 Crucial Properties Limited received the amount from Temuco Foundation and paid out various parties in varied amounts, eg $18.578m was paid as Demand Drafts; $,4.0m was paid to Kariuki Muigua; about $1.8m was sold to cash and transferred to various parties.

Note: some significant amounts were paid out of Crucial Properties accounts in the form of demand drafts - details of majority of beneficiaries were not indicated. However, some new accounts were opened and credited with amounts described as ‘proceeds of

draft’ just about 6 months after the demand drafts totalling Shs 1.4 billion were paid out of the Crucial Properties Limited account No. FX 01-400067. The payments of Shs 1.4 billion in the Crucial Properties account had been described as demand drafts, ‘DD’s.

06.02.2001 RECIPTS $4,000,000

Kariuki Muigua received the amount and paid out various parties including: GK Williams (Shs 140m); Crescent Construction (Shs 80m); Kariuki Muigua (bankers cheques of Shs 143 m-out of which Shs 100 million was reversed on 22 February 2001);

07.11.2001& 10.12.2001

RECEIPTS Demand Drafts Sh.229.5m.

Wellen International Ltd received in account no. 01-400087 proceeds of demand drafts equivalent of sh. 69,389,310; and in account no. 01-400090 equivalent sh. 160,172,353.

07.11.2001 RECEIPTS Demand Drafts Sh.54.5m.

Wallance Holdings Limited received in account no. 01-400086 proceeds of demand drafts equivalent of sh. 54,572,546.

APPENDIX10

SPLITTING OF FOREING RECEIPTS AND PAYMENTS TO CIRCUMVENT

CBK REPORTING REQUIRMENTS

GUIDELINES ON FOREIGN EXCHANGE TRANSACTIONS, SECTION 4

The table below illustrates some transfers split under instructions from Creative Innovations in January 2005. These were traced to the accounts of Paolo Sattanino; CA 01-800145 and CA 01-600006.

Date Beneficiary US$ Account credited 17-Jan-2005 Paolo Sattanino 10,000 CA 01-600006 18-Jan-2005 Paolo Sattanino 10,000 CA 01-600006 19-Jan-2005 Paolo Sattanino 10,000 CA 01-600006 20-Jan-2005 Paolo Sattanino 10,000 CA 01-600006 21-Jan-2005 Paolo Sattanino 10,000 CA 01-600006 24-Jan-2005 Paolo Sattanino 10,000 CA 01-600006 25-Jan-2005 Paolo Sattanino 10,000 CA 01-600006 26-Jan-2005 Paolo Sattanino 10,000 CA 01-600006 27-Jan-2005 Paolo Sattanino 10,000 CA 01-600006 Total 90,000 Euro 28-Jan-2005 Paolo Sattanino 6,325 CA 01-800145 31-Jan-2005 Paolo Sattanino 6,250 CA 01-800145 01-Feb-2005 Paolo Sattanino 6,425 CA 01-800145 Total 19,000

There were other payments of this nature to Paolo Sattanino from the Kingsway Mart Limited account CA 01-000564.

Splitting on Creative Innovations Limited account CA 01-000009

The transactions listed below show multiple remittances to a single recipient within a day.

Date Amount Shs Transaction details as shown in the bank statement 21-Jun-2006 303,138 tt fng PIL (K) Ltd – USD 4,102@73 21-Jun-2006 976,578 tt fng PIL (K) Ltd – USD 13,197@74 21-Aug-2003 446,866 ttfx0308678 remitted to Capricorn

Date Amount Shs Transaction details as shown in the bank statement 21-Aug-2003 455,418 ttfx03080677 remitted to Capricorn 14-Apr-2005 158,639 USD DD issued fvg PIL K Ltd for 2071/-@76/6 14-Apr-2005 329,533 USD DD issued fvg PIL K Ltd for 4302/-@76/6 14-Apr-2005 838,464 USD DD ssued fvg PIL K Ltd for 10946/-@76/6 14-Apr-2005 1,021,078 USD DD ssued fvg PIL K Ltd for 13330/-@76/6 14-Apr-2005 1,021,078 USD DD ssued fvg PIL K Ltd for 13330/-@76/6 14-Apr-2005 1,670,799 USD DD ssued fvg PIL K Ltd for 21812/-@76/6 11-Oct-2005 353,572 tt fng PIL (K) Ltd – USD 4,778 @ 74.00 11-Oct-2005 397,972 tt fng PIL (K) Ltd – USD 5,378 @ 74.00 11-Oct-2005 629,444 tt fng PIL (K) Ltd – USD 8,506 @ 74.00 11-Oct-2005 747,844 tt fng PIL (K) Ltd – USD 10,106 @ 74.00 19-Oct-2005 318,283 tt fng PIL (K) Ltd –USD 4,278.00 @ 74.40 19-Oct-2005 355,483 tt fng PIL (K) Ltd –USD 4,778.00 @ 74.40 19-Oct-2005 355,483 tt fng PIL (K) Ltd –USD 4,778.00 @ 74.40 28-Oct-2005 673,844 tt fng PIL (K) Ltd – USD 9,106.00 @ 74.00 28-Oct-2005 703,444 tt fng PIL (K) Ltd – USD 9,506.00 @ 74.00 28-Oct-2005 718,244 tt fng PIL (K) Ltd – USD 9,706.00 @ 74.00 2-Dec-2005 185,871 tt fng PIL (K) Ltd – USD 2,505.00 @ 74.20

Date Amount Shs Transaction details as shown in the bank statement 2-Dec-2005 358,386 tt fng PIL (K) Ltd – USD 4,830.00 @ 74.20 2-Dec-2005 684,272 tt fng PIL (K) Ltd – USD 9,222.00 @ 74.20 6-Dec-2005 363,580 tt fng PIL (K) Ltd – USD 4,900.00 @ 74.20 6-Dec-2005 708,610 tt fng PIL (K) Ltd – USD 9,550.00 @ 74.20 7-Dec-2005 190,421 tt fng PIL (K) Ltd – USD 2,575.00 @ 73.95 7-Dec-2005 357,179 tt fng PIL (K) Ltd – USD 4,830.00 @ 73.95 14-Dec-2005 202,242 tt fng PIL (K) Ltd –USD 2,733.00 @ 74.00 14-Dec-2005 373,404 tt fng PIL (K) Ltd –USD 5,046.00 @ 74.00 14-Dec-2005 391,164 tt fng PIL (K) Ltd –USD 5,286.00 @ 74.00 19-Dec-2005 357,216 tt fng PIL (K) Ltd - USD 4,880.00 @ 73.20 19-Dec-2005 359,412 tt fng PIL (K) Ltd - USD 4,910.00 @ 73.20 19-Dec-2005 637,572 tt fng PIL (K) Ltd - USD 8,710.00 @ 73.20 19-Dec-2005 710,772 tt fng PIL (K) Ltd - USD 9,710.00 @ 73.20 20-Dec-2005 11,380 tt fng PIL (K) Ltd - USD 156.00 @ 72.95 20-Dec-2005 540,195 tt fng PIL (K) Ltd - USD 7,405.00 @ 72.95 3-Jan-2006 184,956 tt fng PIl (K) Ltd - USD 2,525.00 @ 73.25 3-Jan-2006 357,460 tt fng PIl (K) Ltd - USD 4,880.00 @ 73.25 3-Jan-2006 364,785 tt fng PIl (K) Ltd - USD 4,980.00 @ 73.25 3-Jan-2006 1,418,853 tt fng PIl (K) Ltd - USD 19,370.00 @ 73.25 11-Jan-2006 81,365 tt fng PIL (K) Ltd - USD 1,104.00 @ 73.70 11-Jan-2006 705,917 tt fng PIL (K) Ltd - USD 9,710.00 @ 72.70

Date Amount Shs Transaction details as shown in the bank statement 16-Jan-2006 356,466 tt fng PIL (K) Ltd - USD 4,910.00 @ 72.60 16-Jan-2006 364,307 tt fng PIL (K) Ltd - USD 5,018.00 @ 72.60 16-Jan-2006 364,307 tt fng PIL (K) Ltd - USD 5,018.00 @ 72.60 20-Jan-2006 318,843 tt fng PIL (K) Ltd - USD 4,410.00 @ 72.30 20-Jan-2006 354,993 tt fng PIL (K) Ltd - USD 4,910.00 @ 72.30 20-Jan-2006 364,537 tt fng PIL (K) Ltd - USD 5,042.00 @ 72.30 26-Jan-2006 313,635 tt fng PIL (K) Ltd USD 4,350.00 @ 72.10 26-Jan-2006 354,011 tt fng PIL (K) Ltd USD 4,91000 @ 72.10 26-Jan-2006 702,254 tt fng PIL (K) Ltd USD 9,740.00 @ 72.10 24-Mar-2006 163,205 tt fng PIL (K) Ltd - USD 2,248.00 @ 72.60 24-Mar-2006 270,153 tt fng PIL (K) Ltd - USD 3,716.00 @ 72.70 24-Mar-2006 314,791 tt fng PIL (K) Ltd - USD 4,330.00 @ 72.70 24-Mar-2006 371,267 tt fng PIL (K) Ltd - USD 5,128.00 @ 72.40 13-Apr-2006 151,723 tt fng PIL (K) Ltd - USD 2,122.00 @ 71.50 13-Apr-2006 869,583 tt fng PIL (K) Ltd - USD 12,162.00 @ 71.50 9-May-2006 283,061 tt fng PIL (K) Ltd - USD 3,970.00 @ 71.30 9-May-2006 872,356 tt fng PIL(K) ltd – USD 12235 @71.30 12-Jun-2006 559,472 tt fng PIL (K) Ltd - USD 7,664.00 @ 73.00

Date Amount Shs Transaction details as shown in the bank statement 12-Jun-2006 607,536 tt fng PIL (K) Ltd - USD 8,294.00 @ 73.25 21-Jun-2006 2,223 tt fng PIL (K) Ltd -USD 30.00 @ 74.10 21-Jun-2006 303,138 tt fng PIL (K) Ltd - USD 4,102.00 @ 73.90 21-Jun-2006 976,578 tt fng PIL (K) Ltd -USD 13,197.00 @ 74.00 16-Feb-2004 768,000 transfer to a/c paolo 17-Feb-2004 766,500 transfer to a/c of paolo 15-Apr-2004 466,000 transfer to paolo 19-Apr-2004 470,000 transfer to paolo 22-Apr-2004 465,000 transfer to Euro a/c of paolo 23-Apr-2004 467,500 transfer to paolo 27-Apr-2004 672,979 transfer to Euro a/c of paolo

APPENDIX11

IRREGULAR FOREIGN LOANS TO PARMEX LIMITED AND TRADEX SRL GUIDELINES ON FOREIGN EXCHANGE TRANSACTIONS-SECTION 5.2 In August 2004, Parmex Limited obtained a loan LN 01-300793 of Shs 23 million. This loan was repaid within 2 months as per the details in the table below:

Date Transaction Shs Remarks

27-Aug-04

Loan proceeds 23,000,000 Advance file not in place –no documentation in relation to this credit faci

14-Oct-04

Instalment (4,000,000) Debits originated from Sundry creditors account no. SC 01-600000. The credits in the sundry creditors account have ‘cash received’ as the description. Both the debits and the credits were on the same day.

18-Oct-04

Instalment (4,000,000)

21-Oct-04

Instalment (4,000,000)

25-Oct-04

Instalment (4,000,000)

27-Oct-04

Instalment (4,000,000)

5-Nov-04 Instalment (3,282,030) − It was also noted that in August 2004, the Parmex current account CA 01-000193 received a credit of Shs 23 million from the loan account LN 01-300793 discussed above. Within four days of this receipt, Shs 22.7 million was debited from this account and described as ‘cash paid’. No supporting documents were made available.

A summary of these transactions is presented in the table below:

Date Transaction Shs Work done

27-Aug-04 Loan proceeds (23,000,000) Received from LN 01-300793

27-Aug-04 Cash paid 6,110,636

No supporting documentation.

30-Aug-04 Cash paid 1,000,000 30-Aug-04 Cash paid 7,000,000 31-Aug-04 Cash paid 8,569,744

APPENDIX12

FOREIGN CURRENCY ACCOUNTS OPERATED IN KENYA SHILLINGS GUIDELINES ON FOREIGN EXCHANGE TRANSACTIONS-SECTION 6(5) Examples of these accounts are shown in the table below:

Account name Account No.

Turnover in Shs

Date of opening

Date of closure

Paolo Sattanino 01-400145 28,705,103 16-Dec-2003 01-Aprl-2004

Paolo Sattanino 01-400006 68,819,192 31-Mar-1999 01-Aprl-2004

Paolo Sattanino 01-400154 23,456 9-Mar-2004 01-Aprl-2004

Capricon SRL 01-400093 53,230,397 29-Jan-2002 31-Dec-2003

Capricon SRL 01-400098 136,961,850 25-Feb-2002 31-Dec-2003

Maniben Meghji Shah 01-400091 1,659,137 28-Dec-2001 28-Jan-2002

Triton Petroleum Ltd 01-400092 867,624,417 29-Dec-2001 01-Aprl-2004

Anjum Chaudry 01-400108 28,992,622 29-Aug-2002 01-Aprl-2004

Kenya Catermart Ltd 01-400142 14,095,678 16-Sep-2003 01-Aprl-2004 Jitendra Shah & Mrs Surbhi Shah 01-400158 1,570,000 23-Mar-2004 01-Aprl-2004

Amar J Shah 01-400159 1,552,000 30-Mar-2004 01-Aprl-2004

Mrs Surbhi Shah 01-400160 1,552,000 30-Mar-2004 01-Aprl-2004

Amar J Shah 01-400161 1,552,000 30-Mar-2004 01-Aprl-2004

Mrs Surbhi Shah 01-400162 1,552,000 30-Mar-2004 01-Aprl-2004

Wellen International Ltd 01-400087 69,389,310 07-Nov-2001 08-Nov-2001

Wellen International Ltd 01-400090 160,172,353 10-Dec-2001 21-Jul-2003

Wallance Holdings Limited 01-400086 54,572,546 07-Nov-2001 08-Nov-2001

P.I.V.B 01-400073 44,995,737 24-Apr-2001 25-Jun-2001

Hamed & Mehraz Ehsani 01-400024 6,223,560 10-Oct-1999 01-Apr-2004

Africa Spirit Limited 01-400157 12,327,562 01-Mar-2004 02-Apr-2004

Newcall Technologies Ltd 01-400001 51,251,171 31-Mar-1999 16-Apr-2003

J D J Malde 01-400030 5,473,175 04-Feb-2000 10-Mar-2000

J D J Malde 01-400031 51,652,714 16-Feb-2000 25-Sep-2001

Nakumatt Investments 01-400046 87,415,000 12-Jun-2000 27-Jul-2000

Mr & Mrs Nathwani 01-400060 34,732,000 27-Sep-2000 13-Oct-2000

Mr & Mrs Nathwani 01-400062 3,697,500 05-Oct-2000 13-Oct-2000

Mr & Mrs Nathwani 01-400063 39,936,919 13-Oct-2000 23-Jan-2001

Mr & Mrs Nathwani 01-400064 3,967,500 13-Oct-2000 26-Oct-2000

L Nathwani 01-400065 27,047,424 24-Oct-2000 23-Jan-2001

Kings Investments Ltd 01-400029 17,006,441 31-Jan-2000 07-Feb-2000

Kingsway Investments 01-400037 40,997,221 07-Mar-2000 01-Apr-2004

These accounts were reported in Kenya Shillings but transactions were recorded in various foreign currencies; There were revaluation gains/ losses posted into these accounts periodically; Most of the transactions on these accounts were described as cash transactions.

APPENDIX13

ACCOUNTS WITHOUT ACCOUNT OPENING FORMS CBK/PG/08 −

Account Title Number of Accounts by Type Total Type of Account CA CD FD HPA LBD LN SB

A.K Patel Mr 1 - - - - - - 1 Aakshi Sanjay Shah - - 1 - - - 1 2 Aarav Kamal Shah - - 1 - - - - 1 Aarjaa Manish Shah - - 2 - - - 1 3 Aashit Ramesh Shah - - 4 - - - - 4 Aashni & Aakshi Shah - - - - - - 1 1 Aashni Sanjay Shah - - 1 - - - 1 2 Abbas Ehsani - - 6 - - - - 6 Amal Manish Shah - - 2 - - - - 2 Amip Rajendra. Patel & Mr. Rajendra.J. Patel - - 4 - - - - 4 Anaita N Shah - - 1 - - - 1 2 Anandi Vipin Shah - 2 - - - - - 2 Anay Kamal Shah - - 1 - - - - 1 Ankoor Shah - - 1 - - - 2 3 Anthony J. Rodrigues - - 4 - - - - 4 Antony A. Kegode - - 1 - - - - 1 Ashok & Subhash J. Nagda - - - - - - 1 1 Ashok K.K.Gosar & Rashila A.Shah - - - - - - 1 1 Ashok Kapoor & Geeta Ashok K. - - - - - - 1 1 Astral Aviation Ltd - - - - 4 - - 4 Atul Shah & Harsha Shah - - 2 - - - - 2 Atulkumar M Shah 1 - - - - - - 1 Awal Limited - 1 - - - - - 1 Azhar Chaudry - - - - - 2 - 2 Beatrice Sabana - - 1 - - - - 1 Bharat J Shah - - 6 - - - - 6 Brand House Limited 1 - - - - - - 1 Brand Imports Limited - 4 2 - 8 - - 14 Chandulal D Shah & Kunden C Shah - - 2 - - - - 2 Chandulal D. Shah & Paniben D. Shah - - 3 - - - - 3 Consolidated Asphalts Ltd - - - - - 1 - 1 Converters East Africa Ltd - - - - - 2 - 2 Creative Innovations Limited - - - - 4 - - 4 Crucial Properties Ltd Ac1 1 - - - - - - 1 Crucial Properties Ltd(Usd) A/C 2 1 - - - - - - 1 Crucial Properties Ltd-Ksh A/C 2 1 - - - - - - 1 Dalbit Investments Ltd 2 - - - - - - 2 Dalbit Petroleum Ltd 1 4 - - - - - 5

Account Title Number of Accounts by Type Total Type of Account CA CD FD HPA LBD LN SB

Dimken (K) Ltd 1 - 1 - - - - 2 Discount Cash & Carry - 2 - - - 8 - 10 East African Safari Air - - - - - 1 - 1 Esther Njeri Gitau - 1 - - - - 1 2 F. W Ngatia 2 - - - - - - 2 F.W. Ngatia - - 5 - - - - 5 G.K. Shah - - 21 - - - - 21 Gikandi & Co. Advocates - - - - - 1 - 1 Hamed & Mehraz Ehsani 1 - 5 - - - - 6 Hamed Ehsani - - 1 - - - - 1 Hamed Ehsani & S,R, Shah 1 - - - - - - 1 Hamed Ehsani Uri Account - - 2 - - - - 2 Hans Apparel Ltd - - - - 53 - - 53 Harun International Limited 1 - - - - - - 1 Hinal Ashok Shah - 3 - - - - - 3 Image Motors (K) Ltd - - - - 5 - - 5 J. Shah & B. Chager, P.S. Sehmi, A. Chou 1 - - - - - - 1 J.R. Shah,M.R. Shah & N.Nathwani - 1 - - - - - 1 J.V Barot & Mrs M.J. Barot - - 5 - - - - 5 Jaleh Ehsani Farokhy - - 2 - - - - 2 Jamachar (Kenya) Ltd - - - - - 2 - 2 James Kariuki - - - 2 - - - 2 Jayna Manoj Shah & Manoj R. Shah - 1 3 - - - - 4 John & Anna Ndambuki 1 - - - - - - 1 John Harun 1 - 1 - - - - 2 John Harun Limited - - 1 - - - - 1 Kamal R Shah - - 3 - - - - 3 Kamlesh V Sanghrajka 1 - - - - - - 1 Kariuki Muigua & Co., Clients A/C 1 - - - - - - 1 Kariuki Muigua & Co.-Office A/C 1 - - - - - - 1 Kariuki Muigua David - - - 1 - - - 1 Kasturi Limited 1 - - 3 - 1 - 5 Kempaper Ltd - - - - - 1 - 1 Kenya Hotels Limited 1 - - 1 6 - - 8 Ketan M Shah &/Or Naimisha Shah 1 - - - - - - 1 Ketty Tours Travels & Safaris Ltd 1 - - 1 - - - 2 Kings Chemists Ltd 1 - - - - - - 1 Kingsgate Enterprises Ltd 1 - - - - - - 1 Kingsway Motors (K) Ltd - - 1 - - - - 1 Kingsway Properties Ltd 1 - - - - - - 1 Kingsway Tyre & Automart Ltd - - 2 - - - - 2 Kingsway Tyres Limited – Eldoret 1 - - - - - - 1 Kingsway Tyres Ltd- Recovery A/C 1 - - - - - - 1 Kingsway Tyres Ltd(University Way) 1 - - - - - - 1 Kingsway Tyres Ltd-University Way Branch - - - - - 1 - 1 Kipkorir Titoo & Kiara Advo. 1 - - - - - - 1

Account Title Number of Accounts by Type Total Type of Account CA CD FD HPA LBD LN SB

Kirit N & Mrs. Anjana Patel - - - - - 1 - 1 Laloui & Mosleh Yazdi - - 2 - - - 1 3 Laser Creations 1 - - - - 2 - 3 Leila Ehsani - - 1 - - - - 1 Lions Club Greater Nairobi - - 4 - - - - 4 Lucy W Mwangi - - 1 - - - - 1 M. R. & S. R. Shah 1 - 8 - - - - 9 Magnolia - 9 - - - - - 9 Manish R Shah - - 1 - - - 1 2 Manjunath W Prabhu - - - - - - 1 1 Manoj R Shah - - 5 - - - - 5 Manoj R. Shah 1 - - - - - - 1 Manoj R. Shah Lions A/C - - 9 - - - - 9 Market Masters Ltd - 2 - - - - - 2 Market Masters Ltd – Electricity 1 - - - - - - 1 Masters Kenya Limited - - - - 2 - - 2 Mayfair Insurance Co. Ltd - - 1 - - - - 1 Meera Kamal Shah - - 1 - - - - 1 Meera Kamal Shah & Kamal R. Shah - - 6 - - - - 6 Meshack Ngare Ondieki 1 - - 1 - 4 - 6 Mina B. Shah - - 2 - - - - 2 Minakshi Navinchandra Shah - - - - - - 1 1 Miss Aakshi Shah $ Miss Shamim Ehsani - 1 4 - - - - 5 Miss Aakshi Shah & Mr Ankur Shah - - 2 - - - - 2 Miss Aashni Shah & Mr Homan Ehsani - - 5 - - - - 5 Miss Shamim Ehsani & Miss Aashni Shah - - 1 - - - - 1 Miss Shamim Ehsani & Mr Ankur Shah - - 1 - - - - 1 Mitesh & Manish N Shah - - - - - - 1 1 Mohamed H Alimohamed - - - - - 5 - 5 Mohamed Ifterhar Ghani - - 2 - - - - 2 Motor Tyre Suppliers Ltd - 1 1 - - - - 2 Mr & Mrs Nathwani - - 4 - - - - 4 Mr Ankur Shah & Miss Shamim Ehsani - - 4 - - - - 4 Mr Ankur Shah & Mr Homan Ehsani - - 2 - - - - 2 Mr Homan Ehsani & Miss Aakshi Shah - - 4 - - - - 4 Mr Neel Shah & Miss Aashni Shah - - 2 - - - - 2 Mr Neel Shah & Miss Shamim Ehsani - - 2 - - - - 2 Mr Neel Shah & Mr Homan Ehsani - - 2 - - - - 2 Mr. & Mrs Arsalan Laloui - - 1 - - - - 1 Mr. K.N. Patel & Mrs. A.K Patel - 1 - - - - - 1 Mrs. Bhanumati K. Shah & Mrs. Ina S.Shah - - 2 - - - 1 3 Mrs. I Kanabar & Mrs H. Kanabar - - - - - - 1 1 Mrs. Paniben D. Shah & Chandulal D. - - 1 - - - - 1 Mrs. Paniben D. Shah & Chandulal D. Shah - - 5 - - - - 5 Mrs. Paniben Dharamshi Shah Chandulal Dh - - 1 - - - - 1 Mrs. Suru & Nadeem Sadiq - - 1 - - - - 1

Account Title Number of Accounts by Type Total Type of Account CA CD FD HPA LBD LN SB

Mrudula S Shah - - 5 - - - - 5 Ms. E N Gitau - 1 - - - - - 1 Mwauco Limited 1 - 1 - - - - 2 Naazmina Mohamed - - 1 - - - - 1 Naina M Shah - - 8 - - - - 8 Naina M.Shah & Manish R. Shah 1 - - - - - - 1 Naina Manish Shah - - 4 - - - 2 6 Nakumatt Holdings Limited - 1 - - - - - 1 Nakumatt Investments Ltd 2 - - - - - - 2 Narendra Raichand Shah - - 1 - - - 1 2 Narendra Shah A/C 2 - - - - - - 1 1 Narmadaben M Shah - - 1 - - - 1 2 Nassir Ahmed Ibrahim - - 1 - - - - 1 Navinchandra N. Shah - - - - - - 1 1 Nazir Sadrudin Jivan - - - - - - 1 1 Neel Shah - - 1 - - - 1 2 Neel Shah & Aakshi Shah - - 1 - - - - 1 Newcal Technologies 1 - - - - - - 1 Nikhil Vipin Shah - 2 - - - - - 2 Nilesh Karsandas Somaia - 1 - - - - - 1 Nilima Rajendra Shah - 2 - - - - - 2 Nisha & Pushpa Shah - - - - - - 1 1 Nisha S Raishi - - 5 - - - - 5 Nishit & Co. Ltd 1 - - - - - - 1 Nishit K Patel 2 - - - - 2 - 4 Nishit R Shah - - 2 - - - - 2 Njuca Consolidated Ltd 1 4 - - - 2 - 7 Nu Metro (Kenya ) Limited Marketing A/C 1 - - - - - - 1 Nu Metro (Kenya) Ltd, Prestige Plaza 1 - - - - 1 - 2 Odesys Enterprises 1 - - - - - - 1 Overseas Developments Limited - - 1 - - - - 1 Pacific Systems Ltd 1 - - - - - - 1 Paniben D. Shah & Chandulal D Shah - - 1 - - - - 1 Paniben D. Shah & Chandulal D. Shah - - 1 - - - - 1 Paolo Sattanino 3 - - - - - 1 4 Parker Radio House Ltd 1 1 - - 8 - - 10 Pepe Limited 1 - 8 - - - - 9 Peter Kabi Gitau - - - - - - 1 1 Phone Link (K) Ltd - 1 1 - - - - 2 Priyum Manoj Shah - - 1 - - - - 1 Proudview Investments - - 1 - - - - 1 Pushpaben R Shah - - 4 - - - - 4 R. Parmar - - - 1 - - - 1 R.Z. Haria - 2 - - - - - 2 Race Track Supermarket Ltd 1 - - - - - - 1 Rajul M, Shah - - 1 - - - - 1

Account Title Number of Accounts by Type Total Type of Account CA CD FD HPA LBD LN SB

Riyaz Hasham & Nishta Hasham - - - 1 - - - 1 Roadstar Limited - - - - - 1 - 1 S.K.D. Shah & S.R. Shah - 1 - - - - - 1 Safia Chaudry - - 1 - - - - 1 Saijul Mr. Shah - - - 1 - - - 1 Sanjay R Shah - 3 9 - - - - 12 Savitaben Shah - - 10 - - - - 10 Sawan Rajendra Shah - 2 - - - - - 2 Sawtantar Kumar & Ravinder Singh - - - - - 1 - 1 Shawaz Textile Mills Limited - - - - 247 - - 247 Shiloah Investments Ltd - - - - - 2 - 2 Shivam Enterprises Limited - - - - - 1 - 1 Shobhna Shah - - 6 - - - - 6 Shree Ram Mandir - - 2 - - - - 2 Shree Ram Mandir (Stri Shaba) - - 1 - - - - 1 Sonal Devani - - 1 - - - - 1 Sonia Shah - - 1 - - - - 1 Southlands Transporters Co. - - - 2 - - - 2 Soyum Manoj Shah - - 1 - - - - 1 Span Hardware & Building Suppl. - - - - - 2 - 2 Star Electronics Ltd - - - - - 1 - 1 Stephen K Tarus - - - - - 1 - 1 Sureshchandra P Shah - - 1 - - - - 1 Tasha Enterprises (K) Ltd - 2 1 - - - - 3 Tebebe Y. Berhan 1 - - - - - - 1 The Stage Market Ltd - - - - - - 1 1 Trenz Cosmetics Ltd - - 2 - - - - 2 Trenz Kenya Ltd - - 2 - - - - 2 Triton Petroleum Co. Ltd 1 2 - - - - - 3 Trucks Eicher Kenya Limited-Service A/C - - - - - 1 - 1 Tusker Mattresses Ltd - - 1 - - - - 1 Unizone Investments Ltd - - - - - 1 - 1 Uttamchand D. Shah & Chandulal D. Shah - - 1 - - - - 1 V - Market Choice Limited - 1 - - - 1 - 2 V And A Shah 1 - - - - - - 1 Vipin Maganlal Shah - - - - - - 1 1 W. E. Tilley (Muthaiga) Ltd - - - - - 2 - 2 William K Gitau - 2 1 - - - - 3 World Shelter Limited - - 2 - - - - 2 Yagnesh Devani - - 6 - - - - 6 Yellow House Ltd - 1 - - - - - 1 Total Number Of Accounts Without Forms 59 62 285 14 337 51 31 839

Key CA – Current account; FD – Fixed Deposit CD – Call deposit; LBD – Local Bills Discounted SB – Savings Account HPA – Hire purchase Account

APPENDIX14

SUSPICIOUS TRANSACTIONS AND ACTIVITIES CBK/PG/08

Failing to obtain and maintain records in regard to sources of funds and details of transactions.

Failing to submit to CBK reports of any suspicious transactions, or activities that may indicate money laundering, or other attempts to conceal the true identity of customers or ownership of assets.

Opening and maintaining anonymous accounts.

ACCOUNT NATURE OF TRANSACTION

Nakumatt Holdings Limited CA 01-000085

. Between May 2003 and October 2003, Shs 3.6 m. was transferred to one, Prajapati’s account on a weekly basis. The 22 such transfers totalled shs 79.2 million. Other transfers included sh 20m. and sh. 30m. on 29th and 30th December, 2003.

. On 20 December 2005, debit transfers of Shs 120 m. and sh. 12 m. each were made from the Sundry Creditors account SC 01-600000 to the Nakumatt account CA 01-000085. No support documents for these transactions.

. A cheque to withdraw Shs 6 m. was signed by one signatory contrary to the mandates documented. The face of the cheque was altered and details of Nakumatt inserted.

. There were regular transfers to the account of Fresh an Juici of Shs 6.5 million on a regular basis for which standing instructions were not in place. Between April 2005 and April 2006, Shs 286 million had been transferred in this manner.

Greenhills Investments Limited

. Directors are Manish and Manoj Shah (brothers to the bank’s managing director),

Mehraz Ehsani and Hamed Ehsani.

. There were large cash withdrawals to the level of sh. 5 m. and on 24. 12. 2002 sh. 98,000,000 was transferred to personal account of one, Abbas Ehsani, without supporting documentation.

Paolo Sattanino (based in Italy) . There was a web of transactions involving these entities: Fones Direct; Phones Direct; Intra Market Trading; Brand Imports; Panorama Imports; Triton Petroleum; Cashline Forex Bureau; Capricorn SRL; Creative Innovations; Kingsway Mart limited; Cargo Distributors. All these surrounded the activities of one, Paolo Sattanino.

. Transactions in these accounts entailed payments of “cash” and transfers that ends up in either Paolo Sattanino’s account or at Paramount Bank Limited.

- Cash is paid from the Fones Direct & Phones Direct accounts into Intra Market Trading. From this account, the cash is then transferred to Cashline Forex Bureau. The bureau then makes a transfer to Paramount Bank

Limited;

- Brand Imports, Triton Petroleum, and Panorama Imports make transfers to Cashline Forex Bureau account before it is transferred to Paramount Bank Limited. Brand Imports also makes transfers to the Capricorn account;

- Kingsway makes payments to Paul Mburu who then makes transfers to Cargo Distributors whointurn makes a transfer to Paolo Sattanino. Kingsway also makes direct transfers into the Paolo Sattanino account;

- Creative Innovations makes payments to both the Paolo Sattanino and the Capricorn accounts;

- Credit balances in the Paolo Sattanino and Capricorn accounts are then transferred out of the country through telegraphic transfers without supporting documents other than e-mail correspondence from Paolo Sattanino. Some of the beneficiaries to which these funds are transferred include the following: Ettore Longo in Italy, Hilda in Italy, Tradex SRL, Capricorn SRL, Parmex Limited directly or through Paolo Sattanino. Others are Abdi and J Nyaga;

- A number of companies and individuals such as Creative Innovations Limited, Brand Imports Limited, Aua Industria Limited and Suresh Shah regularly transfer funds to Paolo Sattanino and Capricorn SRL accounts in lots of US$ 10,000

or Euro equivalent.

Dilpun Shah Govindji Lakhamshi . There was another web of transactions involving these entities: Fones Direct; Phones Direct; Lexus Stationers; Global Brands K Ltd; V Market Choice K Ltd; Trenz K Ltd; D Shah; Aniket Property & Investments Ltd; Brand Imports; Panorama Imports.

- These accounts appeared to be operated by one person and transactions were linked to one, Dilpun Shah.

- A number of payments made from these accounts related to overseas payments through the accounts of Paolo Sattanino.

- The deposit slips into these accounts appeared to share the same handwriting.

Odesys Enterprises account CA 01-000740

. A sole proprietorship account opened by one, Felix Odemba Nabuko of Butere and introduced by Dilpun Shah.

. Account opened on 25 Aug 2005. Account opening forms contain no details regarding the business.

. Over the 10 months’ period to 23 June 2006, the account’s turnover was Shs 554,842,767 debits and Shs 566,256,592 credits.

. The account also had significant cash deposits accompanied by withdrawals of similar amounts on the same day. On 12th January 2005 a cash withdrawal of sh. 10,060,000 was made from the account.

Sailesh Prajapati Account CA 01 -000148

. Account opened on 8 January 1999 and closed on 2 August 2004. No account opening forms and details of mandates to operate the account within the banking system.

. During this period, the account debit turnover was Shs 2.2 billion.

. Amounts debited into this account as ‘cash withdrawals’ were traced to the Sundry creditors account No. 01-600000 in the general ledger. Cash may have never left the bank

although the entries in the account are described as if cash was paid out;

. Account exhibited the following:

- Numerous transactions of exactly the same amounts. There were over 1,300 cash deposits of Shs 1 million each out of 1,570 total credits during the period. Of the remaining credits, Shs 105 million was received from Nakumatt in 28 equal transactions of Shs 3.76 million each;

- “Loan proceeds” from other accounts whose relationship with the Prajapati account was not clear.

- Numerous credits described as cash receipts.

1.1.1.1 Crucial Properties Limited A/C No. FX01-400067

Although, the company had maintained bank accounts since January 2001, the account opening forms were dated 24 April 2006. The mandates to operate the accounts give Humphrey Kariuki as the only signatory.

The board resolutions authorising the company to operate an account at CB was dated 24 April 2006. The resolution referred to A/C CA 01-000300 and CA 01-600067, which are accounts in the name of Crucial Properties Limited. However, there was no mention of A/C FX 01-400067 and FX 01-400070 which were also in the name of the company, but have since been closed.

This account was opened and operated in 2001 during which period there was a large credit of Shs 1.9 billion. These funds were then transferred or paid out between January and May 2001.

19 Jan 2001 a TT US$ 24,998,785 – (shs. 1,949,905,230) received from Temuco Foundation

22 Jan 2001 a TTFX 1044 of shs 37,052,02826 paid out (no supporting documents).

Jan 2001 Cash Paid of shs 7,878,000 (no supporting documents).

27 Jan 2001 Converted to Shs7,842,822 (no supporting documents).

3 Feb 2001 shs 390,000,000 transferred to Crucial Property A/C no. 2 (FX 01-400070)

25 April 2001 Revaluation – (@77.5) 9,602,020Dr to ensure that the US Dollar equivalent is maintained.

10 May 2001 Demand Drafts 1545-1569 , shs. 1,418,250,001 (US$ 18,300,000.) paid out – no supporting documents

11 May 2001 Transfer of US$ 700,000 to A/C CA 01-000300 of Crucial Properties (shs 54,600,000).

Crucial Properties Limited A/C 2 – A/C FX 01-400070 . Account opened in February 2001 and operated for 3 weeks after which it became dormant and closed in April 2004. The account received a single credit of Shs 390 million from account Fx 01-400067.

. Within three days of receipt of this cash, Shs 312 million was transferred to a lawyer’s account, Kariuki Muigua & Co Advocates Client Account

2

1.1.1.2 Crucial Properties Limited A/C 2 – A/C CA -01-000300

This account was opened in February 2001 and turned dormant after May 2001. The credits into this account seem to have originated from the Shs 1.9 billion account.

6 Feb 2001 US$ 50,000 received from FX 01-400070 (shs 3,872,500) - Amount transferred from CA 01-000300

13 Feb 2001 paid a B/CQ favouring V.K. Constructions 2,500,000

13 Feb 2001 paid a B/CQ favouring Greencorner Restaurant3,000,000

13 Feb 2001 paid a B/CQ favouring Wines of the World 35,000,000

13 Feb 2001 received US$ 500,000 @ 77.50 (38,750,000)

19 Feb 2001 Cashed Cheques 7,890,000

19 Feb 2001 paid DD1486 CXD & Bal 101,746 (7,925,988)

11 May 2001 paid B/CHQ G K Williams (Various) 24,000,000

11 May 2001 paid B/CHQ Airline Supplies 23,100,000

11 May 2001 paid B/CHQ Green Corner Restaurant 3,000,000

11 May 2001 paid B/CHQ Kariuki Muigua 3,000,000

11 May 2001 received US$ 700,000 (54,600,000) a transfer from FX 01-400067

Some beneficiaries of the damand drafts from Crucial Properties included Wellen International Ltd (shs. 229 m.) and Wallance Holdings Limited ( shs. 54m.).

1.1.1.3 Kariuki Muigua & Co Clients A/C No. 2 – A/C FX 01-400069

This account was opened, operated and closed within 1 week in February 2001. The main transaction related to a transfer of Shs 312 million from another account within the bank belonging to Crucial Properties Limited A/C 2 (See Section 5.6.1.2 of the report above)

06 Feb 2001 received US$ 4m from A/C FX 01-400070 (312,000,000) from A/C FX 01-400070.

12 Feb 2001 sold US$ 300,000 to cash –shs.23,400,000

12 Feb 2001 sold US$ 300,000 to cash –shs 23,400,000

13 Feb 2001 sold US$ 3,400,000 265,200,000

Above transactions traced to Kariuki Muigua & Co Clients a/c CA 01-000091.

1.1.1.4 Kariuki Muigua & Co Clients A/C – CA 01-000091

12-Feb-01 received Sale of USD 300,000 @ 77.80 from FX69 - (shs.23,340,000)

12-Feb-01 received Sale of USD 300,000 @ 77.85 from FX69 (23,355,000)

12-Feb-01 Cash Withdrawal

7,515,000

12-Feb-01 B/Chq FVG Kariuki Muigua A/C 15,000,000

13-Feb-01 received sale of USD 3,400,000 @ Shs 77.50 (263,500,000)

13-Feb-01 Cash Withdrawal 18,125,000

13-Feb-01 B/Chqs FVG Kariuki Muigua A/C (3531,3538,3532,3533) - shs 128,000,000

13-Feb-01 B/Chqs FVG G K Williams (3536 & 3537) - shs50,000,000

13-Feb-01 B/Chqs FVG Crescent Constructions (3529 & 3530) - shs80,000,000

22-Feb-01 B/Chqs FVG G K Williams (3661, 3658, 3666, 3663, 3664, 3660, 3665, 3659 & 3662)) – shs 90,000,000

• 22-Feb-01 Cancelled B/Chqs 3531/2/3 (100,000,000) On 12 February 2001, Shs 46,695,000 was received into this account and Shs 22,515,000 was paid out. The following day, 13 February 2001, Shs 263,500,000 was received (equivalent of

US$ 3,400,000) and Shs 276,125,000 paid out;

• The payments noted above comprised the following: Shs 140 million was described as payments to a GK Williams, Shs 80 million was described as paid to Crescent Constructions; and Shs 128 million was shown as payments to Kariuki Muigua, out of which Shs 100 million was reversed on 22 February 2001;

• The description in the Kariuki Muigua & Co Clients A/C No. 2 – A/C FX 01-400069 shows the debits as if they were sale of currency. This could be misleading and may have been aimed at concealing the actual transfer from one account to another. There may be a link with the amounts transferred out of the Crucial Properties Limited account

• The funds that were credited into this account were paid out almost immediately through what are described in the account as bankers cheques or cash withdrawals.

Nakumatt’s “shadow”

account (CA 01-000091) received large cash deposits and cheques drawn from its account with Barclays Bank Kenya Limited. Other credits included cash deposits from Mombasa. Beneficiaries of payments from the account were parties that would ordinarily be trading with Nakumatt Supermarkets. Daily transactions on the account were numerous with 26th January 1999 recording 205 transactions.

APPENDIX15

MONTHLY STAFF EMOLUMENTS PAID OUTSIDE THE PAYROLL WITHOUT DEDUCTING TAX CBK ACT SECTION 33G (1) (b)

NAME OF STAFF JOB TITLE ENTERTAINMENT

ALLOWANCE – KSH.

CONVEYANCING

ALLOWANC – KSH.

TOTAL

KSH.

ARUN JAIN OPERATIONS

MANAGER

20,000 17,000 37,000

PETER J MWANGI MANAGER

HEAD OFFICE

20,000 15,000 35,000

S.B. PILLAI CREDIT MANAGER 20,000 12,000 32,000

VINAYAN PODUVAL MANAGER

IT DEPARTMENT

10,000 N/A 10,000

W. PRABHU GENERAL MANAGER VARIES (NOT FIXED)

APPENDIX 16

TAX EVASION AND OTHER IRREGULARITIES

Mechanisms were devised to assist certain local companies (“importers”) to evade taxes such as import duty, excise duty and VAT (“Taxes”). Based on the e-mails and other records, entities involved in such tax evasion include, but not limited, to the following:

λ Kingsway Tyres Limited/Kingsway Tyre and Automart Ltd (“KTL”)

λ Creative Innovations Ltd

λ Bachu Industries

λ Brand Imports Ltd

λ Cargo Distributors

λ Aua Industria Ltd

λ Hidden Treasures

λ Books First

λ Motorline (in Mombasa)

λ Shift Cargo Ltd

λ Africa Media Group Ltd-Tanzania

λ Transcargo Ltd-Tanzania

Such evasion of taxes would be facilitated by the involvement of 6 off-shore companies namely:

λ Tradex SRL (“Tradex”) in Italy

2

λ Capricorn SRL (“Capricorn”) in Italy

λ Parmex Limited (“Parmex”) in the UK

λ Parmar General Trading LLC (“PGT”) in Dubai

λ Epsom Holdings Corporation ( “Epsom”) in Liechtenstein and

λ Foreman Corporation (“Foreman”) in Belize

The diagram below illustrates the activities and parties involved in the importation of goods, the payment of these and documents used for the payment of taxes on the importation.

3

OFF-SHORE SUPPLIERS

IMPORTERS/ CB CUSTOMERSKingsway Tyres, Brand Imports, Bachu Industries, Cargo Distributors, Creative Innovations, Aua Industria Ltd, Africa Media group etc.

Full invoice value

Some Invoices sent directly to companies

• Paolo Sattanino• Capricorn SRL

Numerous split payments of under US $ 10,000 THIRD PARTIES

• Mehul Shah• Jaspal• Suresh Shah• Bachu Industries• Transenergy Ltd• Forex Bureaus

etc

Possibly payments from Bank

Payments on instruction of Paolo Sattanino mainly to Tradex & Capricorn (probably used to pay suppliers)

• Under-valued invoice for purposes of import declaration

• Perhaps also full invoice for the purpose of remittance (though not seen)

Payment of the invoices raised by the above companies Payments by these

individuals are mostly to Parmar and Parmex for the account of Kingsway or Creative Innovations

KRAPayment of duties based on under-valued invoices

Payment of full invoices value

Some direct payment to suppliers

OFF-SHORE COMPANIES• Tradex SRL in Italy• Capricorn SRL in Italy• Parmex Ltd in the UK• Parmar General Trading in Dubai• Epsom Holdings Corporation in Leichtenstein• Foreman Corporation in Belize

Key features are:

4

λ Suppliers invoice the off-shore companies for the goods supplied to the importers who are customers of Charterhouse Bank Limited (CHB)

λ Off-shore companies provide undervalued pro forma invoices and/or commercial invoices to the importers for purposes of IDF declaration on the value of goods imported and therefore taxes payable

λ Importers remit funds to the off-shore companies for the goods supplied by:

− remitting foreign currency monies into Paolo and Capricorn bank accounts at CHB which is then remitted to Tradex and Capricorn (on Paolo’s instructions) without appropriate supporting documents and

− direct payments to the off-shore companies.

λ Remitters would instruct Paolo on what to do with the payments remitted. Since purchase of amounts above US$10,000 requires supporting documents, the remittances into Paolo’s accounts (either by cash or transfers from account holders at CHB) are in most cases in tranches of US$10,000 or equivalent in other currencies.

A description of each of the off-shore companies, their activities and involvement in the process is as follows:

Tradex and Capricorn in Italy

λ These two companies are in Italy and are represented by a Mr Paolo Sattanino. (“ Paolo”).

λ Paolo maintains 7 personal accounts at CHB ( Sterling Pound, Euro, US$ and KShs )

λ Capricorn has 4 bank accounts (2 Euros and 2 US$) at CHB

λ Paolo facilitates the documentation, inspection, shipment and payment on behalf of the importers of goods to the exporters. Negotiations and identification of suppliers is often done by the importers directly. Key importers are KTL for tyres, rims and other accessories, Creative Innovations Ltd for furniture and electrical accessories and Hidden Treasures for books.

λ Paolo provides under valued pro forma invoices, blank invoices and commercial invoices as required by the importers to evade import taxes. Instructions in respect of these requirements are from Sanjay. Paolo makes payments to suppliers and others on instructions of Sanjay and the importers

λ There is evidence of an agreement by Sanjay to pay Paolo 0.5% profit/commission on the FOB values from the suppliers

λ Monies are remitted into Paolo’s various accounts at CHB by the importers and other individuals. Paolo maintains accounts of the remitters and provides statement of accounts to them. These statements indicate payments received from them, debit notes sent and

5

payments made on their behalf. Since the purchase of amounts above US$10,000 requires supporting documents, the remittances into Paolo’s accounts (either by cash or transfers from account holders at CB) is almost always in tranches of US$10,000 or equivalent in other currencies

λ Monies from Paolo’s and Capricorn accounts are then remitted mainly to Tradex and Capricorn on instructions from Paolo without supporting documentation.

Paolo’s bank accounts at CHB The table below is a summary of the following: λ Funds received into Paolo’s and Capricorn’s active accounts at CHB and

λ Samples of remittances made off-shore from Paolo’s accounts on his instructions

6

Funds received by Paolo and Capricorn active bank accounts at CHB

Account Details

Account Name

Account Number

Transactions period

Number of Credits in the account

Value of credits into the account Comments based on the description in the current account

Total cash Transfers

GBP Paolo CA 01-

700154

Apr 04 to Oct

05

7 18,650 4,552 14,088 A single cash credit of GBP 4,552 is from D Shah.

Source of the credit transfer is unknown.

Euro Paolo CA 01-

800145

Apr 04 to Jun

06

168 1,205,052 171,451 937,265 Creative Innovations Ltd, KTL and Brand Imports account for

51% of the total transfers into this account (18%, 15% and 18%

respectively). Other transfers include Cargo Distributors, Hon

Kabogo, Habib, Suresh Shah and D. Shah. Transfers made in

tranches of US$ 10,000 and below.

Euro but

maintained

as KShs

Paolo FX 01-

400145

Dec 03 to Mar

04

35 28,705,103 15,140,315 13,556,316 Euro account maintained in Kenya Shillings

Transfers are mainly from Creative, Cargo Distributors Ltd and

Capricorn in tranches of US$ 10,000 and below.

US$ Paolo CA 01 -

600006

Feb 03 to Jun

06

187 2,284,533 85,249 2,157,312 There are about 150 transfers into this account of $10,000 each

mainly from Creative Innovations Ltd and KTL accounts

US$ but

maintained

as KShs

Paolo FX 01-

400006

Mar 99 to Mar

04

148 63,646,190 39,026,661 18,261,783 This is a Euro account maintained in Kenya Shillings. Transfer

mainly from Creative Innovations Ltd, Capricorn and Saima

Avandero.

US$ but

maintained

as KShs

Capricorn FX 01-

400093

Jan 02 to Dec

03

67

53,230,397

13,187,013

22,609,403

Credits into this account are mainly from Creative Innovations

Ltd, Paolo and Capricorn.

Euro but

maintained

as KShs

Capricorn FX 01-

400098

Feb 02 to Dec

03

175

136,961,850

71,175,189

43,327,867

There are mainly cash deposits into this account. Credit transfers

are mainly from Creative Innovations Ltd, Brand Imports, KTL and

Cargo distributors.

7

Examples of remittances made from Paolo and Capricorn accounts on Paolo’s instructions

Date of email

Remitter as specified by Paolo Remitter details as advised by Paolo Currency Amount Beneficiary Account to be debited as specified by

Paolo

19-Sep-02 Creative Innovations Ltd

None Euro 19,710 Capricorn Capricorn Euro Account with CB

23-Sep-02 Kingsway Tyres Ltd Invoice No 257 Euro 17,412 Capricorn Capricorn Euro Account with CB

23-Sep-02 Brand Imports None Euro 70,000 Capricorn Capricorn Euro Account with CB

13-Nov-02 Cargo Distributors Ltd Invoice No 281 Euro 2,991 Capricorn Capricorn Euro Account with CB

19-Dec-02 Cargo Distributors Ltd Invoice No 348 Euro 13,859 Capricorn Capricorn Euro Account with CB

19-Dec-02 Creative Innovations Ltd Invoice No 330, 334, 340, 343, 323, 336 Euro 39,471 Capricorn Capricorn Euro Account with CB

06-May-03 Brand Imports Invoice No 101 Euro 21,319 Capricorn Capricorn Euro Account with CB

06-May-03 Creative Innovations Ltd Invoice No 100 Euro 26,800 Capricorn Capricorn Euro Account with CB

06-May-03 Kingsway Tyres Ltd Invoice No 94 Euro 33,923 Capricorn Capricorn Euro Account with CB

11-Oct-04 Creative Innovations Ltd Deposit on order confirmation US$ 70,000 Tradex US$ account no Fx 400006

19-Oct-04 Kingsway Tyres Ltd Invoice No 143 GBP 695 Tradex GBP account no Fx 400154

19-Oct-04 Charterhouse Invoice No 68/105/133/140 /146/151/162/164

Euro 31,638 Tradex Euro account Fx 4000145

15-Nov-04 Franco Tramontano None US$ 16,000 Tradex - Dubai UAE US$ account no CA 600006

20-Dec-04 Kingsway Tyres Ltd Invoice no 200 Euro 26,307 Tradex Euro account Fx 4000145

07-Jan-05 Creative Innovations Ltd Invoice no 148 Euro 20,000 Tradex Euro account Fx 4000145

14-Jan-05 Africa Media Group Ltd Final settlement US$ 30,000 Screen Service Italia SRL US$ account

21-Jan-05 Kingsway Tyres and Automart Ltd Invoice no 7400578/7400593/7400594 US$ 49,908 Wilson Logistics Italia Spa US$ account no Fx 400006

31-Jan-05 Kingsway and Creative Innovations Ltd

Kingsway invoice - 160 Creative Innovations Ltd - Order

fi ti US$ 200,000 Tradex US$ account no Fx 400006

03-Feb-05 Creative Innovations Ltd, Brand Imports & Motorline Invoice no 183/199/203/165/152 Euro 60,026 Tradex Euro account Fx 4000145

08-Mar-05 Charterhouse Invoices no 193/3/7/26 Euro 42,534 Tradex Euro account Fx 4000145

31-Mar-05 Africa Media Group Ltd Invoices no 49 dated 22/3/2005 Euro 27,271 Tradex Euro account Fx 4000145

07-Apr-05 Creative Innovations Ltd Deposit on order confirmation US$ 170,000 Tradex US$ account no Fx 400006

8

Date of email

Remitter as specified by Paolo Remitter details as advised by Paolo Currency Amount Beneficiary Account to be debited as specified by

Paolo

12-Apr-05 Any African name None Euro 1,531 Mr. Ettoro Longo Euro account Fx 4000145

21-Apr-05 Creative Innovations Ltd Invoices no 40/42/50/62 Euro 48,980 Tradex Euro account Fx 4000145

25-May-05 Aua Industria Ltd Deposit on order confirmation US$ 100,000 Tradex US$ account no Fx 400006

01-Jun-05 Charterhouse Invoices no 47/63/66/73/87 Euro 33,809 Tradex Euro account Fx 4000145

01-Jun-05 Kingsway, Hidden treasures & Creative Innovations Ltd

Invoice 80, Invoice 51& Deposit on order confirmation

US$ 117,010 Tradex US$ account no Fx 400006

22-Jun-05 Hidden treasures Invoice No 109 GBP 753 Tradex GBP account no Fx 400154

27-Jun-05 Kingsway Creative Innovations Ltd

Invoice no 77 Invoices 81 (partial) 99 (full)

Euro 62,287 Tradex Euro account Fx 4000145

11-Jul-05 Any African name None Euro 978 Mr. Ettoro Longo Euro account Fx 4000145

18-Jul-05 Suresh Shah Deposit on order confirmation Euro 15,000 Tradex Euro account Fx 4000145

20-Jul-05 Creative Innovations Ltd Deposit on order confirmation US$ 80,000 Tradex US$ account no Fx 400006

29-Aug-05 Creative Innovations Ltd Aua Industria Ltd

Deposit on order confirmation US$ 100,000 Tradex US$ account no Fx 400006

14-Sep-05 Brand Imports Creative Innovations Ltd

Invoices 150/146/113 Euro 79,688 Tradex Euro account Fx 4000145

20-Sep-05 Brand Imports, Creative Innovations, Africa Media

Invoices 147/146/138/134 Euro 29,167 Tradex Euro account Fx 4000145

29-Sep-05 Hidden treasures Invoices 174 GBP 1,000 Tradex GBP account no Fx 400154

13-Oct-05 Any African name None Euro 560 Mr. Ettoro Longo Euro account Fx 4000145

23-Nov-05 Charterhouse None Euro 27,716 Tradex Euro account Fx 4000145

06-Dec-05 Creative Innovation Ltd Invoices 116 & 186 Euro 93,090 Tradex Euro account Fx 4000145

23-Jan-06 Creative Innovations Ltd Invoices 229/05 Euro 54,741 Tradex Euro account Fx 4000145

17-Mar-06 Aua Industria Ltd Deposit on order confirmation US$ 30,000 Tradex US$ account no Fx 400006

9

Examples of Paolo’s e-mail communication Below are examples of e-mail communication between Paolo and Sanjay and other remitters to his account:

• Paolo to Amar Taylor of Aua Industria dated 11 October 2005 “Apparently you have paid US$62,000 to Tradex Italy wherein was expecting the same to be paid in Kenya with CB!! ………please never pay to Italy unless we agree first!! “ This money was paid directly to Italy by a Mr Paresh Shah (US$39,982.50) and Mr Palvi Patel (US$21,982.50)

• Paolo to Sanjay regarding Aku of Brand Imports dated 16 November 2005 “ ….aku has given instructions to Charterhouse to remit to Tradex Italy Euro 39,228.18-That is fine for me but can you make sure no sender neither details will appear on the TT!!. reason is, i do not have any official outstanding on my books with Brand imp” Sanjay responded on 17 Nov 2005 “We will not put name on your Euro Credit on the statement|”

• Sanjay to Paolo dated 7 July 2005

“ Kindly note the above amount has been remitted to your account by Hon Kabogo” The amount is Euros 5,270

• Paolo to Sanjay dated 13 September 2005 “I have asked Suresh to pay 100,000 Euros to tradex to be able to pay his suppliers. I do not know whether he needs to pay the same to my account in Kenya or not…….in case he wants to go through my Charterhouse account, please make sure this will not be done in one lot……..”

Parmex and PGT λ Parmex is a company registered in the UK and PGT in Dubai. It appears that there is common ownership interest in these two

companies by the Parmar family which actively manages these companies. The UK Company is actively managed by Mr D.Parmar and Mr S. Parmar and the Dubai business by Mr B.Parmar and Mr C. Parmar (son of B.Parmar).

λ There is evidence of an agreement by Sanjay to pay Parmex 0.5% profit/commission on the FOB values from the suppliers.

λ Parmex and PGT facilitate the documentation including providing pro forma invoices for the purpose of import declaration, inspection, shipment and payment on behalf of the importers of goods to the exporters. This arrangement is similar to that of Paolo of Tradex but in this case Paolo often does the administrative work and also issues Parmex Ltd invoices to KTL and other importers. Key importers are KTL and Creative Innovations Ltd.

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λ KTL purchases tyres mainly from Transityres in Europe in the name of Parmex. Transityres invoices Parmex which in turn invoices KTL and sends both of these invoices to KTL.

λ Sanjay provides guidance on the activities and trading of Parmex and has arranged securities for loan facilities to Parmex’s lenders. Parmex had loan facilities of about US$4.4m October 2004 at AMN Amro, guaranteed by personal deposits of Sanjay Shah/Manoj Shah/Manish Shah.

Other activities of Parmex and PGT

Local sales paid off-shore

There is evidence that sales made locally by KTL to buyers such as Transenergy (K) Ltd in Mombasa, RT (East Africa) Ltd and Bachu Industries are paid for in Dubai to PGT by the purchasers E.g. a local sale of US$181,936 to Transenergy was paid for by Transenergy’s office in Dubai to PGT by way of 4 equal post dated cheques. Similarly another local sale to Transenergy of US$ 56,880 was paid for in Dubai to PGT and in this particular instance 2 invoices seem to have been raised by Kingsway Tyre and Automart. One for US$ value to PGT since they asked for an invoice to be accounted for in their books and another local invoice to Transenergy. It is therefore likely that this method of invoicing and direct off-shore payments/receipts could result in under-reported revenues by KTL.

Payment of personal and friends bills Certain personal bills and of parties related/associated to Sanjay are received by Parmex and paid on Sanjay’s approval. These include bills for credit cards, Amex card bills for Mr Harun Mwau and safe deposit box rentals. D.Parmar notified Sanjay of receiving John Harun’s Amex bill of ₤9,086 and the need to pay this bill. Local Payments on behalf of PGT Often payments are made locally by Sanjay on behalf of PGT on instructions of Mr B. Parmar. The equivalent of the local amounts in US$ is credited to the relevant accounts such as KTL or Creative Innovations Ltd account in Dubai. Examples include:

λ Payment of US$10,000 made to Mr Jaffer and Creative Innovations Ltd account credited in Dubai

11

λ KShs 1,152,540 paid to Mr Gulam Abbas and Creative Innovations Ltd account credited in Dubai

λ US$10,000 and KShs 449,580 paid to Mr Gulam Abbas and KTL account credited with US$16,000 in Dubai

Receiving payments from Paolo on behalf of KTL

Paolo maintains a trading current account with Parmex. Often Sanjay requests Paolo to instruct Parmex to debit Paolo’s account in its books and credit the KTL account with the same. In return KTL credits Paolo’s US$ account at CB. E.g. a US$100,000 transfer from Paolo’s account into KTL account in Parmex books was re-imbursed to Paolo in his US$ account at CB by way of 10 tranches of US$10,000 so as to avoid any documentation as required by CBK. Receiving payments for various third parties Various payments were received into the Parmex account at CB from individuals, CB and likely customers of KTL. It seems there were private arrangements made by Sanjay with the remitters to have funds remitted to Parmex. Further investigations are required to understand the completeness of these transactions i.e. the authenticity of the remitters and the reasons for remitting monies to Parmex.

12

The table below provides details of some of the funds paid to Parmex

Date of email Payer Currency Amount Comments

06-Sep-04

Cash less commission US$ 49,750.00

B. Parmar writes to Sanjay "we are crediting parmex account with US$ 200,000 and the remaining we credit Kingway Tyres account with US$ 49,676.5 in PGT books” Monia Posti US$ 129,950.50

Amin and Premji US$ 69,976.00

25-Sep-04 L Dolciami c/o Bay forex US$ 64,996.00 B. Parmar writes to Sanjay " …… we have receved US$ 64,996 with value dated 16.09.2004 from L.Dolciami, C/o Bay forex as per

enclosed copy. We are creditting this amount to Kingsway Tyres account."

10-Jan-05 Mehul GBP 6,000.00 D. Parmar of Parmex writes to Sanjay "we confirm receiving instructions from Mehul to transfer GBP 6,000 to Kingsway Tyres”

17-Jan-05 Mehraz Ehsani US$ 39,951.59

S. Parmar of Parmex email to Sanjay advising receipt of funds Kingsway Tyres US$ 199,936.73

23-Feb-05 Jaspal GBP 5,000.00 S. Parmar advising Sanjay of the receipt of cash

24-Feb-05 Parmex, UK GBP 100,000.00 ₤100,000 was received in cash from unknown source. D. Parmar of Parmex writes to Sanjay "we are depositing the cash of GBP 100,000 in lots of approx 5,000 per day. Hence the first payment of approximately US$ 90,000 to Transtyre can not be effected until about 8 working days time from today.”

28-Feb-05 Rowshanak Nazari Khan, of Village Market

Euro 2,370.00 S. Parmar of Parmex email to Sanjay "we have received net Euro 2,370 for Rowshanal Nazari Khan, the Village Market. Please confirm if this for your account"

01-Mar-05 Jaspal GBP 6,000.00 S. Parmar advising Sanjay of the receipt of cash

03-Mar-05 Jaspal GBP 6,000.00 S. Parmar advising Sanjay of the receipt of cash

07-Mar-05 Jaspal GBP 8,000.00 S. Parmar advising Sanjay of the receipt of cash

08-Mar-05 Jaspal GBP 7,000.00 S. Parmar advising Sanjay of the receipt of cash

09-Mar-05 Jaspal GBP 8,000.00 S. Parmar of Parmex email to Sanjay, "please be advised that we have received cash £8,000 from Jaspal."

10-Mar-05 Jaspal GBP 7,000.00 S. Parmar advising Sanjay of the receipt of cash

11-Mar-05 Jaspal GBP 8,000.00 S. Parmar advising Sanjay of the receipt of cash

14-Mar-05 Zahiad Janmohamed US$ 9,966.37 S. Parmar writes to Sanjay "today we have received net $9,966.37 from Zahiad Janmohamed."

13

Date of email Payer Currency Amount Comments

BACHU US$ 39,836.43 Sanjay writes to D. Parmar "this is to confirm that US$ 39,836.43 from Bachu is for the account of Kingsway”

16-Mar-05 Zahiad Janmohamed US$ 9,966.41 S. Parmar writes to Sanjay "we confirm having received net $9,966.41 from Zahiad S Janmohamed for today's value date"

22-Mar-05 Zahiad Janmohamed US$ 9,966.56 D. Parmar writing to Sanjay confirming receipt of funds

29-Mar-05 US$ 50,000.00 D. Parmar writing to Sanjay confirming receipt of funds

12-Apr-05 Court Langley Ltd GBP 165,000.00 S. Parmar advising Sanjay of the receipt

29 July 2005 Religious Account US$ 29,954.00 S. Parmar writes to Sanjay” we have received US$29,954 from ordering customer “Religious Account” Nairobi. Please confirmif this is for

your account.”

1 Sept 2005 Mr and Mrs RKShah GBP 15,000.00 From S. Parmar Parmer to Sanjay ” we confirm safe receipt of a chq for GBP 15,000 from Mr & Mrs RK Shah”

24-Oct-05

Bachu Induatries Limited US$ 43,538.97 S. Parmar of Parmex writes to Harshad Amin "please be advised that we have received net US$43,538.97 from Bachu Industries Ltd for

today's value date for the account of Kingsway."

Transcargo Ltd, Tanzania US$ 6,874.26 S. Parmar of Parmex writes to Harshad Amin "We have also received net US$6,874.26 from Transcargo Ltd, Tanzania, please confirm if

this is for your account."

27-Oct-05 Worldwide Adventure Travel US$ 11,339.20 S. Parmar advising Sanjay of the receipt

30-Nov-05 Bachu Industries US$ 43,574.58 S. Parmar advising Sanjay of the receipt

20-Dec-05 Worldwide Adventure Travel GBP 3,250.00 Sanjay writes to D. Parmar of Parmex "Kindly note that we are expecting STG 3,250.00 from a company called Worldwide Adventure

Travel to be paid to yourselves. Could you check and confirm receipt of these funds."

06-Jun-06 RT East Africa Ltd US$ 106,817.20 Rajesh of Parmar writes to Sanjay "we have received US$ 106,817.20 from RT East Africa Ltd with value date 01.06.2006 and we are

making payment to Transityre as per instruction."

07-Jun-06 Charterhouse US$ 85,000.00 Sanjay advising D. Parmar of Parmex that they should be receiving these amounts

07-Jun-06 Bachu US$ 101,340.80 Sanjay advising D. Parmar of Parmex that they should be receiving these amounts

14

Epsom Holdings and Foreman Corporation It appears that these are not trading companies. There were proforma invoices from these two companies for the supply of books to Books First and Hidden Treasures. Paolo of Tradex arranged for the shipment of the books and asked Sanjay in an e-mail dated 15 December 2003 what invoices to use for this consignment and Sanjay responded on 17 December 2003 asking to use any of the two companies, Epsom or Foreman. Further investigation would be appropriate in order to verify the consignment of books to Books First and Hidden Treasures and establish the payments made by Books First and Hidden Treasures in respect of this consignment and the taxes paid.

Taxes (Import duty, Excise duty, VAT) paid There is evidence of activities that strongly suggest the possibility of underpayment of taxes by the importers that Sanjay is associated with. These activities entail:

λ Preparing under-valued proforma and commercial invoices for purposes of IDF declaration on the value of goods imported

λ Obtaining blank invoices from suppliers and Paolo of Tradex with the intention of undervaluing goods imported in order to pay lower taxes.

λ Disguising or not appropriately describing the goods imported

The table below illustrates the under-statement of invoices on imported goods for purposes of IDF declaration with the objective of evading the import related taxes.

15

Preparing under-valued proforma and commercial invoices for the purpose of IDF declaration on the value of goods imported

Date of invoice /Email

Supplier Agent Consignee Type of goods

Source of adjusted pro forma invoice

Value of Pro forma invoice used

Actual Value of Goods

Under declaration Comments and extracts from email correspondences

1 Oct 2003

Capricorn Kingsway Tyres and Automart Ltd

Tyres

Parmex Ltd and Excelcior Export, Import & Finance Services

$39,042.00 $ 75,508.78 $36,466.78

Paolo writes to Sanjay “.. for your information the inspector will only come when the container is loaded so, provided no body is going to open the container over there, in the future if we want to play some game on the quantity we will be able to do it”

15-Jan-04

Tradex Creative Innovations Ltd

Luxten lights Tradex

$10,271.40 $21,000.00 $10,728.60 Correspondences are between Paolo and Sanjay copied to Dipesh Valani of Creative Innovations Ltd.

13-Oct-04

Tecra Intl - Dubai

Kingsway Tyres Ltd

Tyres Tecra Intl - Dubai $22,037.16

Two proforma invoice with the same number (PI-P08103/A). One is about 20% less in value compared to the other

10-Feb-05

Tradex Kingsway Tyres Ltd

Rims Tradex

$10,886.16 $36,810.00 $25,923.84 Paolo writes to Sanjay “here enclosed proforma invoice actual value 36,810 if you are happy with the same, pls carry on and apply for IDF”

29-Apr-05

Johnnic Comm SA

Nu-Metro Kenya Limited

CDs, DVDs and other accessories

Johnnic Comm SA

$152,000.00 $240,000.00 $88,000.00

Supplier (Benjamin Krief) writes to Sanjay “ Can you please receive confirmation that I will personally play with figures and confirm what is the lowest value we can “officially” reach.”

Sanjay replies “Thank you for your email, yes I confirm and await what is the lowest cost to work with.”

03-May-05

Zhejiang Zhongda

Parmex - Dubai

Kingsway Tyres Ltd

Rims Zhejiang Zhongda

$34,918.00 $58,196.67 $23,278.67 Two proforma invoice with the same number (915AW22003). One is about 30% undervalued from the other.

16-May-05

Tradex Creative Innovations Ltd

Lights Tradex

€ 21,011.08 € 52,291.71 € 31,280.63 Adjusted proforma invoice attached. Email containing this info is sent by Paolo to Sanjay and Shailesh Shah of Creative Innovations Ltd

16-Aug-05

Zhejiang Rims Not indicated

Kingsway Tyres Ltd

Rims None attached $22,118.00 $33,578.00 $11,460.00

The mail refers to an earlier discussion between Sanjay and a Ben. Indication there is no Custom Clean Report of Findings (CCRF)

16

Date of invoice /Email

Supplier Agent Consignee Type of goods

Source of adjusted pro forma invoice

Value of Pro forma invoice used

Actual Value of Goods

Under declaration Comments and extracts from email correspondences

16-Aug-05

Khind Not indicated

Creative Innovations Ltd

Microwaves None attached $17,286.00 $28,810.00 $11,524.00

The mail refers to an earlier discussion between Sanjay and a Ben. Indication there is no Custom Clean Report of Findings (CCRF)

31-Aug-05

Seng Yip Furniture

Tradex Creative Innovations Ltd

Furniture

None attached

$8,000.00 $23,500.00 $15,500.00

Values are from the mail from Paolo to Sanjay There are indications of two other containers (actual value $48,000) not yet repriced and Paolo asking Sanjay what to do.

14-Oct-05

Zhangazhou Tradex Creative Innovations Ltd

Furniture Tradex

$5,999.31 $22,826.00 $16,826.69 Both actual and the adjusted pro forma invoice attached to the mail. Paolo's email of 3 Aug 2005 to a "Ben" indicating prior knowledge and discussions with Sanjay

29-Nov-05

Boston Office Furniture

Tradex Creative Innovations Ltd

Furniture

Tradex $3,626.98 $7,860.50 $4,233.52

Both actual and the adjusted pro forma invoice attached to the mail. Goods sourced from Malaysia. Email containing this info is sent to Sanjay sent by Paolo of Tradex

29-Nov-05

Tradex Kingsway Tyres Ltd

Tyre centre accessories

Tradex € 7,013.00 € 27,000.00 € 19,987.00

Paolo writes, “…. Here enclosed proforma invoice for IDF (it covers Teco goods which actual value is 27,000 euros) if you are happy with that pls apply immediately for IDF ……. “

Obtaining blank invoices from suppliers and Paolo of Tradex with the intention of undervaluing value of goods imported for the purpose of paying import duty

17

Date of Email Email from Email to Extracts as is extracts from the email

02-Dec-02 Mr. Choi of Seowoong International Sanjay "Piano not mentioned on documents even invoice and packing list. We sent full set BL (bill of

lading) with blank invoice and packing list per requested"

08-Jan-03 Capricorn – Paolo Sanjay

“As agreed on phone, pls find here attached: …… Capricorn blank invoice (for you to type anything

you need)”

Capricorn blank invoice attached

01-Mar-03 Sanjay Chanparmar@Parmex.co.uk

“They have no business with the actual invoices and Mavji ensure there are never declared on the

airway bill as it will only bring problems.”

Chandresh replies, "I have already done a dummy invoice for them. They need this for the UK

customs as this is the new requirement they need"

17-Apr-03 Capricorn – Paolo Sanjay

“pls find here attached invoice no.96 dated 15/04/03 without prices where you have the actual list of

items shipped, pls modify it as you wish and put prices as per your convenience for custom

clearance”

Blank Capricorn invoice attached

14-May-04 Sanjay "please find attached a blank invoice for the 4 tyres" A Tradex blank invoice is attached addressed

to Kingways Tyres Ltd bestfast@net200ke.com

03-Nov-04 Sanjay Mr. Choi of Seowoong

International “In your next DHL courier, please send some blank invoices and packing lists.”

14-Jun-05 Sanjay Seowoong International "…… would appreciate if you could send us blank invoices and packing lists."

20-Jun-05 Sanjay Connie - vmsh@tm.net " can you urgently send us 3 blank packing list and 3 blank invoices to enable us to do local

inspection"

Disguising or not appropriately describing the goods imported

18

Date of Email Email from Email to Relevant extraction from the mail

04-Dec-02 Tradex- Paolo Sanjay "I am ready with me glasses for wardrobes and piemme for Kabogo, please tell me who will be the

consignee and what description of goods you want me to put."

16-May-03 William Kabogo info@kingswaytyres.com and copied to

abstairs@yahoo.co.uk

"….. For the purpose of easy and quick clearing of goods indicate the goods as agricultural pipes

and accessories plus one used agro-pipe bending machine. Total Value Rand 10,000"

28-Sep-03 Sanjay Parmex – D. Parmar

.. " Description: General Cargo. There will be no inspection required" D. Parmar wrote “the supplier

is saying that customs in Brazil, will not allow description of goods to be declared as 'General

Cargo'. Supplier requests that goods description is: 'Alloy wheels and optional Accessories'"

22-Oct-04 Sanjay Seowood International - Mr Choi Instruction to describe goods as “General Merchandise"

24-May-05 Sanjay Tradex- Paolo

" I urgently require you to ask the shipping company to change the description from Umbrellas to

Tyres."

"They do not need to mention the breakdown, they can only mention quantity of Tyres."

13-Feb-06 Kingsway Tyres Ltd-

Harshad Amin Balkrishna Tyres - Chetang

" ………. You must state the quantity of tyre shipped in the container as AGRICULTURAL

TYRES…."

Communication between Sanjay, Paolo and the suppliers on underdeclaring the value of goods imported.

19

Date of Email Email from Email to Relevant extraction from the mail

12-Jan-04 Tradex- Paolo Sanjay "….. Actual value US$ 22,000 (may be better we will inspect it as 50% off ???"

" ……. Actual value 18,000 (can we try the same as above???????)"

9-Mar-04 Tradex- Paolo Sanjay “ ….. the same should not be a problem since the value of my proformas was 65% undervalued”

19-Oct-04 Sanjay Seowood International - Mr Choi

"if we wanted to inspect batteries and tube shipments would you be able to get an inspection up to 50%

under invoicing. If this is possible it would greatly help us if not we would then need to give you alternative

shipping instructions."

04-Jan-05 Sanjay Seowood International - Mr Choi "As you make future shipments would it be possible to undervalue these shipments by probably 40-50%

on batteries and up to 60 - 70% on inner tubes."

09-Mar-05 Sanjay Tradex- Paolo and copied to

Hamin of KTL

"In my mind we have reduced the cost of these tyres too low and probably looking for trouble. Would you

advise me the actual values so that we can see how much to declare."

07-Apr-05 Sanjay

Seowood International - Mr Choi

copied to

hamin@kingswaytyres.com

"….. We need to undervalue the same. By what percentage can you comfortably undervalue so we know

how to process this matter"

27-Apr-05 Sanjay

"Can you ask your suppliers to confirm if he will get us the inspection at 30% - 40% undervalue?

Thereafter I require you to prepare an original pro-forma invoice and the undervalue pro-forma invoice

………. "

chanparmar@parmex.co .uk

05-May-05 Sanjay Kingsway - Harshad Amin "We need to know what these pro-forma's are and if any under invoicing is to be done so that inspection

can be arranged"

06-May-05 Sanjay

Seowood International - Mr Choi,

Harshad Amin of Kingsway and

copied to Manoj of Kingsway

"Kindly advise us what undervalue you can do for each of the two invoices"

22-Jul-05 Sanjay "I have attached the invoice which you need to undervalue by 30% and apply for IDF and arrange to clear" bestfast@net200ke.com

26-Aug-05 Sanjay Tradex- Paolo "In respect of this invoice, may I suggest we create the actual invoice for more than $5,000 and can

increase the value of tyres since Agricultural Tyres do not have duties."

20

Date of Email Email from Email to Relevant extraction from the mail

09-Sep-05 Sanjay Tradex- Paolo

Paolo's request, "…. Actual value of shipment is ($)48,000. please advise what kind of Tradex invoice you

require for IDF and clearance"

Sanjay replied "please make approximately 40% and send to me"

05-Oct-05 Tradex- Paolo Sanjay "please urgently advise what kind of tradex invoice you need"

29-Mar-06 Tradex- Paolo Amar Taylor – Aua Industria "….. I have updated the quantity to read I projector only."

"I have mentioned this to the boss and he said we will decide once the loot is in the account."

Other tax matters Company revenue banked into personal account

There is evidence that rebates and marketing budgets for KTL in Nairobi from Transityres (KTL supplier ) in Europe is received into the personal accounts of Sanjay Shah/Manoj Shah/ Manish Shah at Citibank (A/C No 305723) on the instructions of Sanjay Shah. These amounts are Euros 37,800 (19/8/05) and Euros 12,779 (26/9/05) for the marketing budget and US$ 133,070 (July 2005) for the rebate.

E-mail communication indicating intention to evade tax

There is evidence in the form of e-mail communication that indicates intention to evade tax. We state as is some of these e-mail communication below:

• From Bhavesh Patel of Creative Communication to dated 14 February 2006:

“We are still waiting for your advice on how to make invoices for 130m which is still pending as at today”

• From Sanjay to Hamed of Village Market dated 18 October 2005:

21

“ ……Thereafter we request Patrionics to prepare a new bill with just the wordings Hotel Project and would save us from VAT element”

• From D.Ghosh of Greenhills Investment (Sanjay is a director of this company) and Market Master to Sanjay dated 10 June 2004:

“ As you know that Molla and Naombi were doing PAYE Tax audit for Green Hills Investments and Market Masters for the years 1999 to 2003. They have finished and given the cert for Market Masters for the above period without any problems. But Greenhill they have done their reconciliations and showing around 3 to 4 million in salary which was not taxed. As advised by Mr Hamed they will come to see you with all the details. ……….”.

• From Bhavesh Patel to Sanjay sending calculations done by KRA on tax payable by S K D Shah and R Shah dated 9 May 2005:

“Please see these attachments. I have not understood their calculations. I think these people are mad. The amounts they are asking us to pay is so crazy. Anway, please give me advice on what I should do with these idiots”

• From Sailesh Shah of Creative Innovations Ltd forwarding an e-mail of Creative Innovations Ltd employee to Sanjay dated 10 January 2005

“ Sanjay for your info and guidance …… It seems things are getting difficult.

Contents of e-mails being forwarded is “ As you are aware, recently we have got ourselves in trouble with BV and customs due to documentation declarations. We believe Melvin has briefed you on what counter measure we took in order to get the containers moving and meet BV requirements. We need to highlight to you that we actually put ourselves at risk by sorting the documents with customs. We have consulted our group Financial Controller who gave his personal guarantee to the customs and also paid some fees to the customs officers which we will need you to assist in paying…………… This is not healthy for KHIND as a public listed company and if we are found out to do double declaration, we will be black listed by the customs and our export licence might be suspended………………….”

• From Paolo a memo to Amin and Manoj Shah of KTL dated 4 October 2004. Below is relevant extraction from the memo

“As agreed with Kumho will make shipment of the goods in the following manner

For all passenger and light truck sizes (those not listed in the Pro-forma Invoice No……) will be shipped without any inspection and in the following manner…………………………… Description: General Merchandise

22

For all Truck Tyre sizes, the following methodically will be used……………….. At the time of loading Kumho must ensure that Bureau Veritas present to do a physical count as per packing list(VERY INPORTANT ONLYPACKING LIST TO BEDECLARED TO BUREAU VERITAS as pricing is between Parmex and KingswayTyres nothing to do with Kumho”

• From Rakesh Singla of KTL to Sanjay dated 23 April 2005 on suggestions to evade tax on Kamal Properties Ltd, a company in which Sanjay is a both a shareholder and a director. The detailed suggestion to evade tax include :

1. Plan to create expenses such as repairs and maintenance, salaries and interest to reduce rental income and

2. Plan to show rental income at lower level which include asking for rent in two parts (cash and cheque) at the time of negotiation

• From Paolo to Sanjay dated 17 March 2004:

“I keep on receiving from Bureau Veritas requests for inspection for tyres tube and flap on Wilson logistics/Capricorn etc etc of course all of them have been applied by Cargo Distributors!!!! I do not know what to say to them since they want to inspect the goods. Please let me know.”

It is possible that Paolo means that using Cargo Distributors Ltd as the consignee was creating a problem with the inspectors such that they inspected the shipment where the consignee was. It appears that as a result of this concern, the consignee for the pending shipment was changed to Nairobi Procurements Ltd and the shippers advised accordingly by Paolo.

23

1 Other unusual matters

Below are extracts of some of the e-mails that indicate unusual operations at CHB:

Unclaimed deceased money taken into bank’s income • E-mail from Purnima Shah of CB Kisumu branch to David Okinda of CB dated 13 march 2006:

“ We would like to request to activate account 09-100008 Masakhalia Kangu James which has gone dormant. The said person is deceased and has no one to claim the balance. We would like to close the account and credit the balance to our income account”

The response from David Okinda dated 13 March 2006 was: “ The account has been activated”

Based on the above, it is possible that CB has the practice of taking into its income account the unclaimed deceased monies. Further investigation work needs to be done to establish this.

Transactions on verbal instructions • E-mail from Fred Shitakha of CB Mega Branch to Arun Jain regarding CA 01-000249 Italian Stlyes Ltd dated 25 May 2006:

“As per our telephone conversation, I have paid cash Kes 2,000,000/= from the above account to Monia Posti. Please be advised “

Arun responded on the same day as “OK confirmed”

Further investigation is required to establish if the above transaction was ever supported by appropriate documents and accounting entries and to establish if there CB has a trend of carrying out banking activities on verbal instructions of its management.

Large amounts of cash remitted to PGT through Central Forex Bureau

• E-mail from B.Parmer of PGT to Sanjay dated 14 October 2004: “We have received AED 200,000 (US$ 55,000) from Central Forex Bureay today”

Sanjay responded on 15 October 2003:

“Please apply this to clear off the transactions for the cheque you had issued on behalf of John Harun for AED 200,000”

24

• E-mail from B.Parmar to Sanjay dated 13 March 2004:

“We have received US$100,000 today from Central Forex Bureay”

Further investigations is required to understand these remittances and the relation if any to CHB

Bank certificate for the purpose of obtaining Visas Purnima Shah works at CB in Kisumu. She wrote an e-mail on 10 May 2006 addressed as “Dear Mr Shah”. It is not clear who the e-mail is sent to. She requested for a certificate of KShs 7m to enable her show this to the Australian High Commission for the purpose of obtaining visas for her two sons. The extract of her e-mail is as follows:

“Dear Mr Shah,

……………………. I need assistance for my two sons. They have been selected for higher studies in Australia. To enable them us to obtain VISA, Australian High Commission wants a statement for Ksh7 Million.

I would request you if you could issue me a certificate for KSh7 Million only as a matter of record and for their VISA purpose. I am ready to produce any documents that you want for that. …………………………… As you know as a salaried individual, it is difficult for us to accumulate Ksh 7 Million and show in savings or deposit account…………………… Sincerely yours Purnima Shah”

Further investigations is required to establish if a bank certificated was issued from CB to the Australian High Commission for the purpose of obtaining Visas and if so, how this was accounted for in the records of CHB.

Indication to reword loans given so as to disguise violation of CBK regulations on lending limitation based on the share capital of CHB. There is an e-mail dated 14 March 2006 from unknown sender as follows:

“Sanjay we need to re-word the I st para as the bank can not lend 193. something like “including the deposit of Ksh.80m”

Sanjay responded on 15 March 2006 to unknown recipient as follows:

25

“ ………………………….b) or we redo and give another letter. We just need to be careful that we do not state we are loaning 193 million as we cannot under the CBK Act, as our share capital isn’t sufficient. We can state that we undertake to pay 193 million which is different from we loaning 193million. ……………………………………..”

Deposits and liabilities in foreign bank accounts

The table below is a summary of the deposits and liabilities on personal accounts of the Shah brothers and those of the 3 off-shore companies at specific dates.

Bank Account Account

No.

Assets Liabilities Date of the

assets/liabilities

position

Citigroup-

London

Sanjay Shah &/or

Manish Shah &/or

Manoj Shah

Foreman Corp

305723

???

US$72,740

₤ 430,340

US$658,777

₤998,262

₤442,051

Assets and liabilities

position as at 27 April

2006 based on e-mail

confirmation from

Michael Glen of

Citigroup

American

Express

Bank-

Singapore

Sanjay Shah &/or

Manish Shah &/or

Manoj Shah

CIF 63413 Assets unknown but

₤700,000 and

US$400,000

transferred from

ABN on 29/10/04

and 15/3/05

respectively

Request for guarantee of

US$600,000 to Kumho

Tyres Co. And US$1m to

Transityres

26

Bank Account Account

No.

Assets Liabilities Date of the

assets/liabilities

position

Deutshe

Bank(Suisse)

SA

Kingsway Tyres

Ltd

Proudview

Investments Ltd

2005900

2006027

₤1,107,000

US$1,265,000

US$500,000

₤1,056,900 Assets and liabilities

position as at 7 April

2006 based on e-mail

confirmation from

Monika Haesh of

Deutshe Bank

ABN Amro Sanjay Shah &/or

Manish Shah &/or

Manoj Shah

Epsom Holdings

Corp

FDR ₤2,440,093

US$1,292,514

US$1,218,223

Facilities to Parmex Ltd

for US$4,468,631

Facilities to Epsom for

US$1,050,000

Assets and liabilities

position as at 12

October 2004 based

on e-mail confirmation

from Gail Lawrence of

ABN Amro

SG Hambros

Bank & Trust

Ltd

Kingsway Tyres

Limited

Epsom Holdings

Corp

??? US$3m deposit to

secure guarantee

facilities

???

Page 1 of 5

SHAREHOLDERS OF CHARTERHOUSE BANK LTD

Authorised Issued

Nakumatt LR No. 209/7130 Hotnet Ltd (see below) KShs.250,000,000 Snowdale Capital Ltd 2,440,000 C 34221Investments Ltd "Kirungii" Ring Rd Atulkumar M Shah 2,500,000 shares Gismass Trust Nominees 1

Westlands KShs 100 2,440,003 shares Atulkumar M Shah 1 2 April 1987PO Box 30029 each Narshi M Shah (deceased) 1

Nairobi Total 2,440,003

Seiko L/R No:209/2468 Sanjay R Shah Shs.1,000,000 Sanjay R Shah 1 C 70023Investments Ltd University Way Kamal R Shah divided into 2 shares Kamal R Shah 1

PO Box 11324 1,000 ordinary 2 April 1996Nairobi shares of

Shs.1,000each Total 2

LIKELY RELATED COMPANIES

L.R. No: Nitin M Shah Shs.100,000 Sushila R Shah 1 C 33749209/2468 Manoj R Shah divided into 5 shares Nitin M Shah 1

University Way Sanjay R Shah 1,000 shares Manoj R Shah 1 5 January 1987PO Box 11324 Manish R Shah of Shs.100 Sanjay R Shah 1

Nairobi each Manish R Shah 1Total 5

L.R. No: Nitin M Shah Ksh:10,000,000 Sushila R Shah 10,000 C 33751209/2468 Manoj R Shah divided in to 50,000 shares Nitin M Shah 10,000

University Way Sanjay R Shah 100,000 shares Sanjay R Shah 10,000 5 February 1987PO Box 11324 Manish R Shah of Shs.100 Manoj R Shah 10,000

Nairobi each Manish R Shah 10,000Total 50,000

L.R. No: Manish R Shah Shs.100,000 Sushila R Shah 1 C 52252209/2468 Manoj R Shah divided in to Manish R Shah 1

University Way Sanjay R Shah 1,000 shares 6 shares Manoj R Shah 1 21 October 1993PO Box 11324 Nitin M Shah of Shs.100 Sanjay R Shah 1

Nairobi Ashwin P Shah each Nitin M Shah 1Ashwin P Shah 1

Total 6

5 Kingsway Group of Companies Ltd

1

2

3 Kingsway Holdings Ltd

4Kingsway Investment Ltd

SUMMARY OF COMPANY SEARCHESAPPENDIX 2A

S/No. Company Name Registered Office Name of DirectorsShare Capital

Shareholder's Name Shares Held

Certificate of Incorp. No. & Date

Page 2 of 5

Authorised IssuedS/No. Company Name Registered Office Name of DirectorsShare Capital

Shareholder's Name Shares Held

Certificate of Incorp. No. & Date

Creative L/R No: 209/2468 Sailesh K Shah Shs.2,000,000 Kingsway Investments Ltd 10,000 C 49962Innovations Ltd University Way Kamal R. Shah 20,000 shares Sailesh K Shah 10,000

PO Box-49644 Shs.100 each 20,000 shares 23 June 1992Nairobi

Total 20,000

Kamal L/R No: 209/2468 Manish R Shah Shs. Manish R Shah 10,000 C15821Properties Ltd University Way Manoj R Shah 5,000,000 Manoj R Shah 10,000

PO Box 11324 Sanjay R Shah divided into 50,000 shares Sanjay R Shah 5,000 26 May 1979Nairobi Ashwin P Shah 50,000 shares Nitin M Shah 5,000

of100 each Kamal R. Shah 2,500Nishit R Shah 2,500Vikas K Shah 5,000Sushila R Shah 10,000

Total 50,000

Kingsway L.R. No: Kingsway Holdings Ltd. Shs. 100,000 Kingsway Holdings Ltd. 999 C 33750Properties Ltd 209/2468 Growth Management Ltd divided into Growth Management Ltd 1

University Way 1,000 shares of 1000 shares 5 February 1987PO Box11324 100 each

NairobiTotal 1,000

Kings L.R. No:.NO : Manish R Shah Shs. 100,000 Manish R Shah 20 C 31254Investment Ltd 209/2468 Ashwin P Shah divided into 100 shares Manoj R Shah 20

University Way Nishit R Shah 100 shares of Nitin M Shah 20 20 February 1986PO Box11324 1,000 each Ashwin P Shah 20

Nairobi Sushila R Shah 20

Total 100

Growth L/R No:209/2468 Manish R Shah Shs.100,000 Manish R Shah 1 C 51330Management Ltd University Way Sanjay R Shah divided into 2 shares Sanjay R Shah 1

PO Box 11324 Bharat Tank 1,000ordinary 6 November 1992Nairobi Mahendra Shah shares of

Shs.100 each Total 2

10

6

7

8

9

Page 3 of 5

Authorised IssuedS/No. Company Name Registered Office Name of DirectorsShare Capital

Shareholder's Name Shares Held

Certificate of Incorp. No. & Date

L/R No:209/167/4/2 Antony O Kinaiyia Shs. 100,000 Anton O Kinaiyia 1 C 93013 Westlands, Muthithi Rd Jecinta W Kageni divided into 2 shares Jecinta W Kageni 1

PO Box-10248 1,000 shares of 1 March 2001Nairobi Shs.100 each

Total 2

Greenhills L/R No:- 91/418 Hamed Ehsani Shs.10,000,000 Kingsway Investments Ltd 50,000 C 42829Investments Ltd Limuru Rd Mehraz Ehsani divided into 100,000 shares Hamed Ehsani 25,000

PO Box300 Manish R Shah 100,000ordinary Mehraz Ehsani 25,000 26 April 1990Village Mkt Manoj R Shah shares of

Nairobi Shs.100 eachTotal 100,000

Nu Metro LR No. 91/923 Brian C Pottinger KShs.10,000 Hameco Ltd (see below) 50 C 96156(Kenya) Ltd The Village Mkt Mehraz Ehsani 100 shares Nu Metro (EA) Ltd 50

PO Box 226 Hooman Ehsani KShs 100 100 shares 1 November 2001Village Mkt, Nairobi Hermanus C Trollip each

Anthony WardHamed EhsaniSipho SitholeSanjay R ShahManoj R Shah Total 100

Hameco Limited L/R No:- 91/148 Hamed Ehsani Shs.20,000 Hamed & Mehraz Ehsani 500 C 13452Limuru Rd Sanjay R Shah divided into Sanjay & Manish R Shah 500PO Box300 1,000 ordinary 1000 shares 29 March 1975Village Mkt shares of

Nairobi Shs.20 eachTotal 1,000

Market Masters LR No. 91/418 Faranak T Ehsani Shs.100,000 Faranak T Ehsani 1 C 51688Ltd Limuru Rd Kamal R Shah divided into Kamal R Shah 1

PO Box 100 Hooman Ehsani 1,000 ordinary 2 shares 1 December 1992Village Mkt, Nairobi (alt. to Faranak) shares of

Shs.100eachTotal 2

15

11 Crosslynx Ltd (shareholders are employees of one of the companies owned by Sanjay, Manish & Manoj Shah)

12

13

14

Page 4 of 5

Authorised IssuedS/No. Company Name Registered Office Name of DirectorsShare Capital

Shareholder's Name Shares Held

Certificate of Incorp. No. & Date

Ken Kip Ltd LR No. 209/2468 Hon Ezekiel Bargentury Shs.1,000,000 Hon Ezekiel Bargentury 340 C 38884University Way Manish R Shah 1,000 ordinary Manish R Shah 330PO Box 11324 Mehmood Rehmat Khan shares of 1000 shares Mehmood Rehmat Khan 330 29 November 1980

Nairobi Shs.1,000 each

Total 1,000

Yellowstone LR No. 12596/39 Kamal R Shah Shs.20,000 Kamal Shah 1 C 42426Enterprises Ltd Enterprise Rd Mitesh N Shah divided into 200 2 shares Mitesh Nemchand Shah 1

PO Box 41986 shares of Total 2 6 March 1990Nairobi Shs.100 each

NON RELATED COMPANIES

Hotnet Ltd KShs.2,000 C 87016200 shares of

KShs10 200 shares 9 September 1999each

AUA Industria LR No. 209/625 Dahyalal V Taylor KShs.10,000 Dahyalal V Taylor 1 C 81295Ltd Standard Blding Udhayan V Taylor 100 shares of 3 shares Udhayan V Taylor 1

Kimathi Street Amar V Taylor KShs100 Amar V Taylor 1 28 July 1998PO Box 41159 each

Nairobi Total 3

LR No. 209/656 Kimaru Ndegwa F36/2001Moi Avenue Mohamed Fizan

PO Box 30756 Khatib Ashraf 19 July 2001Nairobi

Kabuito Uniafric House Rajendra J Patel KShs.200,000 Rajendra J Patel 51 C 19431Contractors Ltd Koinange Street Jitendra J Patel 10,000 shares of Jitendra J Patel 50

PO Box 14054 Rasmikant M Patel KShs 20 108 shares Rasmikant M Patel 5 30 July 1979Nairobi each

Total 106

19

20 Dalbit Investments Ltd (company incorporated in British Virgin Islands)

Details not available in the company file at the registrar's

21

16

17

18 Details not available in the company file at the registrar's

Details not available in the company file at the registrar's

Page 5 of 5

Authorised IssuedS/No. Company Name Registered Office Name of DirectorsShare Capital

Shareholder's Name Shares Held

Certificate of Incorp. No. & Date

Kings Chemist LR No. 1870/4X/162 Jitendra Shah KShs.100,000 Jitendra Shah 800 C 29563Ltd Mpaka Rd Surbhie Shah 1,000 shares of Surbhie Shah 200

Westlands KShs 100 1,000 shares 9 May 1985PO Box 49847 each

Nairobi Total 1,000

Sunmatt Ltd LR No. 1870/11/28 Sundip A Shah KShs.2,000 Sundip A Shah 33 C 48263Lower Kabete Rd Tushar A Shah 100 shares Tushar A Shah 34

Westlands KShs 20 100 shares Mita Shah 33 10 December 1991PO Box 14843 each

Nairobi Total 100

Ukwala LR No. 209/2794 Vijay Jayantilal KShs. 75,000 Vijay Jayantilal Dodhia 300 C 64606Supermarket Ltd Haile Sellasie Ave Rohit Maganlal 750 shares Rohit Maganlal Shah 450

PO Box 34667 Nitin Velji KShs 100 750 shares 27 April 1995Nairobi Anilkumar Jayantilal each

Nemchand Kanji Total 750

Yellow House LR No. 11646/12 Samson W Njoroge KShs. 50,000 Samson W Njoroge 2,499 C 61237Ltd Ridgeways Rd Salome W Njoroge 2,500 shares 2,500 shares Salome W Njoroge 1

PO Box 74694 KShs 20 22 September 1994Nairobi each

Total 2,500

23

24

25

22

215t July 2006

Our Ref: KNCHRICOF/47

Your Ref: CHB/KNCHRlCN1/06

Mr. S. ShahDirector, Charterhouse Bank6th Floor, Longonot PlaceKijabe StreetNAIROBI

Dear Sir

RE: IN THE MATTER OF THE PERSONAL SECURITY OF PETER GEORGEODHIAMBO AND TITUS MWIRIGI RELATING TO EVENTS SORROUNDINGCHARTERHOUSE BANK.

We acknowledge receipt of your letter on the above subject dated 19th July 2006 thecontents of which we have noted.

Your contention that we have condemned and scandalized you and the fellow directors ofCharterhouse Bank without due recourse to the rules of natural justice has profoundlysurprised us. We therefore invite you to read yet again our letter of the 12th July 2006upon which you should notice that the only concern we have with the PoliceCommissioner is the personal safety and security of Messrs Peter Odhiambo and TitusMwirigi.

We do reiterate as a matter of fact that Mr. Peter Odhiambo has since ih- July 2006received a lot of telephone calls from people warning him of their capabilities to harmhim on account of the events that surround Charterhouse Bank. Peter Odhiambo 's andTitus Mwirigis fears for their safety are real and not flights offancy.

We take this opportunity to clarify further our involvement in this matter which is alsopremised on Mr. Odhiambo's attempted arrest by police officers relying on documentsthat had not been executed by the present Charterhouse Statutory Manager Mrs. RoseDetho. This is the basis upon which we asked the Commissioner of Police to investigatehow officers from Central Police Station could purport to effect an arrest based on non-authentic and unenforceable documents.

From the foregoing, by a copy of this letter, we are forwarding to the Commissioner ofPolice the names of the two officers from Central Police Station who went to the CentralBank of Kenya and attempted to arrest Mr. Odhiambo on 7th July 2006 as:

i) Superintendent Muya Nyale the District Criminal Investigations Officer(DCIO),

ii) Inspector Jaliwa.

Sincerely

Maina KiaiChairman

CC: Maj. General Hussein Ali, EBSCommissioner of Police

, .-:CHARTERHOUSE BANK LTD

P.O.Box 43252, 00100 Nairobi. Kenya· 6th Floor, Longonot Place, Kijabe StreetTel: (254020) 242246 - 53' Fax: (254020) 219058' E-Mail: info@charterhouse-bank.com

Our Ref: CHB/KNCHR/CN1/06

Wednesday, July 19, 2006.

The Chairman

Kenya National Commission On Human Rights1

stFloor, CVS Plaza, Lenana Road,

P.O. Box 74359 - 00200NAIROBI.

Dear Sir,ATTENTION: MAINA KIAI

RE: IN THE MATTER OF YOUR LETTER REF: KNCHR/COF/47 DATED 12thJULY 2006.

The vision of the Kenya National Commission on Human Rights (KNCHR) is tocreate a strong vibrant human rights culture founded on equality and social justicefor all. The KNCHR prides itself of being possessed of eight core values:

1. Independence2. Accessibility3. Humility4. Professionalism5. Gender diversity equity and equality6. Accountability7. Participation8. People centred approach.

By employing these core values, KNCHR seeks to upon receipt of a complaintconduct investigations and where necessary seek redress on behalf of anindividual or group.

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Having stated the above, we hereby acknowledge receipt of your letter Ref:KNCHR/COF/47 dated iz" July 2006 on which is appended the signature of Mr.Maina Kiai the Chairman of KNCHR.

We would like to start by pointing out that the directors of Charterhouse Bank towhom you have addressed individually the said letter are perturbed, stunned andgreatly concerned especially by the contents of your last but one paragraph whichstates:

tlMay we also add that should anything untoward compromisethe safety and security of Mr. Odhiambo or Mr. Mwirigi, thensuspicion witt remain that those responsible are the owners ofCharterhouse Bank, their agents and/or some elements withinthe police force. 11

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Equally flabbergasting are the contents particularly those of your 2nd, 3rd, 4th, 5th,

11th, 1~th and 13th paragraphs which state:

"The events surrounding this issue are that in April 2004, when Mr.Odhiambo was employed as the Internal Auditor at Charterhouse Bank, hecame. across information touching on various economic crimes thatincluded money laundering, tax evasion, violation of the Banking Act andthe Central Bank of Kenya Act, being perpetrated by the owners andmanagement of the bank.

He relayed this information to the Kenya Revenue Authority in the samemonth. In August 2004, this information was transmitted to then Minister forFinance Hon. David Mwiraria with a promise of strict confidentiality. Basedon this information, Hon. Mwiraria through the Central Bank of Kenyaconstituted an Inter Agency Task Force chaired by the - Kenya Anti-Corruption Commission to carry out a detailed investigation into theviolations cited in that report.

During the course of the investigations by the task force, Mr. Odhiamboassisted the Task Force with additional information including the forensicaudit on Charterhouse Bank. In August 2004 as the work of the task forcewas ongoing, Mr. Odhiambo was advised by his contacts within the TaskForce to resign his job at Charterhouse Bank and in view of his cooperation,the Central Bank of Kenya offered him alternative employment in February2005 in the Internal Audit Department.

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His role in assisting the Task Force was regrettably leaked to the ownersand the management of Charterhouse Bank around November 2004 and as aresult he started receiving anonymous and threatening phone calls throughhis mobile phone. He also noticed several suspicious persons inquiringabout where he lived. Owing to these inquiries, Mr. Odhiambo was forced todispatch his family-his wife and two children- out of the country. Since then,

he has been forced to move houses thrice.

Article 9 of the International Covenant on Civil and Political rights providesfor the right of everyone to enjoy security of the person which right is alsoguaranteed by Section 70 of the Constitution of the Republic of Kenya.Every Kenyan is entitled to life, liberty, security of the person and theprotection of law. Now that Messrs Odhiambo's and Mwirigi's personalsafety has become a matter of national concern on account of the eventsthat surround Charterhouse bank, it is our sincere belief that the police havea duty to ensure that their right to security of their persons is not infringed.

We further draw your attention to Section 392 of the Penal Code (Cap 63Laws of Kenya) which imposes a duty on citizens to prevent commission ofcrimes by making it an offence to neglect to prevent a felony. It reads:

"Every person who, knowing that a person designs to commit or iscommitting a felony, fails to use all reasonable means to prevent thecommission or completion thereof is guilty of a misdemeanour"

In our minds, the KNCHR is expected to be a credible, professional and ethicalbody holding custody of human rights protection and mandated to act impartially,fairly, legally and within the rules of natural justice. It is our fair assumption thatyour above quoted letter was a finding resulting from a complaint filed to andthoroughly investigated by the KNCHR

Our surprise is therefore based on your findings that " ... should anything untowardcompromise the safety and the security of Mr. Odhiambo or Mr. Mwirigi, thesuspicion will remain that those responsible are the owners of Charterhouse Bank,their agents and/or some elements within the police force."

This finding is ascertained and confirmed by your mighty signature as theChairman of KNCHR. The KNCHR in its protection and defence of human rightsand in its administration of justice is only mandated to act within the law,independently, impartially and without discrimination.

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The rules of natural justice demand that no person be condemned unheard, orwithout being accorded a fair opportunity to defend themselves against anyaccusation levelled against them. The KNCHR has accused, condemned andscandalised us under none other than by its Chairman without giving us theopportunity to respond to any allegations and we are disturbed as to how theChairman a lawyer of no mean distinction drew his conclusions without giving bothparties a fair hearing.

It is our contention that the acts, the letter and the findings stated in the said letterare unreasonable, unfair, discriminatory, biased, scandalous and against the rulesof natural justice as they are based on malicious rumours and allegations and arein violation of our fundamental rights for the following facts and reasons:

1. Charterhouse Bank is a financial institution, licensed, operating,controlled, supervised and regulated under the Banking Act and theCentral Bank of Kenya Act.

2. The Central Bank of Kenya (CBK) as the regulator is mandated underthe Banking Act to inspect, supervise, provide a remedy and advise oreng~ge a professional to undertake any act or action that is required fora bank to be compliant.

3. The Central Bank of Kenya in performance of its duty brings to thenotice of any commercial bank any violations if they are detected andthe bank is given an opportunity to respond before the CBK takes anyaction. .

4. Charterhouse Bank of its own volition and motivated by the need to becompliant with the Banking Act Cap 488 Laws of Kenya, fhe CentralBank Act of Kenya Cap 491 of the Laws of Kenya and the PrudentialGuidelines sought to recruit an internal auditor to ensure that all thebank accounts, documents and operational procedures were in totalcompliance with the laws and more particularly the CBK Act and theBanking Act. Mr. Peter Odhiambo sought employment in CharterhouseBank as an internal auditor and during the interview, he portrayedhimself as being capable of undertaking the duties and functions of aninternal auditor responsible for the bank's audit that is to say, all thedocuments transactions, operations and banking related business. Hewas supposed to ensure compliance and make recommendations to themanagement where necessary.

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5. In essence, the custodians of the bank's documents at theCharterhouse Bank were the internal auditor Peter Odhiambo and theperson in charge of the archives Joseph Maina Gachari.

6. From the time that Peter Odhiambo was employed, he at all timesinformed the management that he was up-to date with his audit, that hehad audited and continued to audit all the bank books, documents,operations and transactions and everything was compliant with theBanking Act, the Central Bank of Kenya Act and the PrudentialGuidelines. Even where an issue would be raised by the Central BankInspectors, it is Peter Odhiambo who would be the first person torespond before the matter came to the attention of the management orboard.

7. If there were any or if there existed any violations or wrong doings atCharterhouse Bank, Peter Odhiambo either caused them or deliberatelyfailed to rectify them or where he was not able to rectify, to bring them tothe attention of the management or the board or to the Central Bank ofKenya Inspectors who have always been inspecting Charterhouse Bankfrom time to time as provided by the statutes.

8. Sometimes in the year 2003, the management of Charterhouse Bankbecame aware that its data and diskettes to the Clearing House werebeing tampered with to the detriment of the bank and its customers.This being a major security breach, the matter was reported to theCentral Bank of Kenya, the Banking Fraud Investigations Departmentbut no one was apprehended.

9. At the same time the bank discovered that its Back-up data andsoftware were missing. This time a report was made at the CentralPolice Station but no action was taken. The management then calledand interrogated Mr. Lameck Wangumba, who was in charge of theInformation Technology and computer systems at the bank. From hisresponse and behaviour, it became apparent that he knew and/or wasresponsible for the theft of the bank's back-up data and the software.

10. As soon as Mr. Wangumba knew that the police had been involved, hequickly left the bank just before Christmas of December 2003.

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11. With this information and experience, the management became alertand discovered that although Lameck Wangumba had left he was inconstant touch with Peter Odhiambo.

12. Sometimes in mid 2004, the bank received information that someonewas stealing and removing documents from the bank. The managementdirected Peter Odhiambo to investigate, audit and to establish the extentof the theft and what documents had been stolen and whether it wastrue or not. He was required to put into place measures to ensure thatconfidential documents were not stolen or interfered with and if he hadany difficulties, he was supposed to report and/or makerecommendations to the management.

13. At all times, Peter Odhiambo confirmed to the management that he had,perused and examined all the documents and transactions and that allwere in compliance and that the allegations of theft and/or remov~1 ofdocuments from Charterhouse Bank was false.

14. Being the internal auditor, the banks documents custodian and amember of the senior management team, the bank had no reason not tobelieve him.

15. However, the information about documents being stolen and removedfrom the bank increased. Whatever was stolen was allegedly beingtaken to the Central Bank of Kenya and to the Kenya RevenueAuthority. The bank engaged the services of a private investigator whodiscovered that the documents were actually being stolen and removedfrom Charterhouse Bank by Peter Odhiambo and another officer calledChege from the foreign exchange department and were being deliveredto certain people both at Kenya Revenue Authority, the Central Bank ofKenya and at various hotels within the city.

16. After receiving the Investigator's report, the bank called in the police andPeter Odhiambo left the bank in a huff when he discovered that thepolice had been called in respect of the stolen documents and he hadbeen identified as the culprit.

17. The private investigator ascertained that Peter Od hiambo and Chegewere frequent visitors at the Central Bank and the KRA offices.

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18. On 31st August 2004, a contingent of officials from CBK accompaniedby the Governor's son Mr. Silla Mullei, Mr. Melville Smith and othersincluding officers from the Kenya Anti Corruption Commission (KACC)and police officers raided Charterhouse Bank demanding certainspecific documents in respect of certain specific accounts running up toand approximately 260 accounts.

19. At the bank it was discovered that during the activities of these raids,the raiders were constantly receiving directions on their mobile phoneswhich seemed unusual. The raiders were looking for specific documentswhich strangely enough were found to be missing as they had beenstolen.

20. The management summoned one Joseph Maina Gachari being theperson in charge of the bank's archives to explain why the documentsthat were being sought were not being made available. Mr. Gachariwas ordered to ensure that the documents were found and handed overto the CBK team as they had requested.

21. Mr .. Gachari informed the management that the documents that werebeing sought were among those that had been transferred temporarilyto the bank's archives during the bank's expansion. He was directed togo to the archives and bring the documents and the management gavehim until 1st November 2004 to produce all the documents. When askedwhy the documents had still not been availed, he said he was unable tolocate them and suggested that Peter Odhiambo 'would know where thedocuments were since they were not in the archives and he was theonly other person who' had access to the archives. Given that PeterOdhiambo had already quit employment, Mr. Gachari was suspendedfrom work but he never returned.

22. Immediately after Gachari was suspended, on zo" September 2004, insome rather inexplicable circumstances, the banks archives caught fireand everything in the archives burnt down. It is instructive that thelocation of the archives was only known to Peter Odhiambo, MainaGachari, the Managing Director and one other manager. The matterwas reported to the police but the cause of fire was never establishedalthough arson was suspected.

23. From the description of the documents that had been stolen from thebank, it is the bank's view that this had been a calculated conspiracy to

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remove account opening documents of certain accounts, files of certainclients and to pluck out vital documents from the files that could later beused as a weakness to portray Charterhouse Bank as being in violationof the "Know your Customer" which can only come about by way ofmissing documents.

24. After the raid, the investigation and the inspection, the bank was notable to produce the missing files nor any of the missing documents thatwere being demanded by the CBK team but we were to later learn thatall the documents that were specifically being requested had beendownloaded, plucked out discriminatively from various files and forthese unfortunate events, the bank was found to be in violation andfined KShs. 1,000,000/-.

25. Up to this point in time, the bank management had put the unpleasantissues at the back of their minds and moved on and the bank continuedwith its normal operations and enhanced its security managementsystems or so they thought.

26. Unfortunately, towards the end of the year 2005, it was discovered thatone James Muia a current employee of Charterhouse Bank wasconstantly being seen in the company of Peter Odhiambo and MainaGachari. The bank management suspected that he might try to stealdocuments again from the bank, but decided not to sack him but to puthim under surveillance since the Police Officers from the Central PoliceStation had informed the management that unless they had proof orcaught him red handed with the documents, there was nothing that thepolice could do. He is still an employee of Charterhouse Bank even aswe write to you. -

27. From the beginning of the year, it was discovered that SUSpiCIOUSactivities were taking place between James Muia and yet anotheremployee one David Okinda who was now in charge of the IT Systems.The management started investigating their activities and it wasdiscovered that some accounts and data was being tampered with andthat at certain times, there was a logging of the bank's data forinordinate periods of time and it was unclear why for example DavidOkinda would dwell on certain accounts for in excess of three hours.When the bank called in an expert, it was confirmed that there wasexternal intrusion into the bank's system where data was being

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tampered with and lor being transferred elsewhere and after he wasdiscovered, Mr. Okinda left employment.

28. From the year 2004 to-date, and at all material times, the bankconsidered all the unfortunate incidents as activities of some disloyaland greedy employees who were doing all this for their own personalgain and it never occurred to us they were doing it to injure the bank.

29. From 2nd

April 2006, the bank started being portrayed negatively in themedia and on 24th May 2006 certain copies of letters were delivered bycourier to Charterhouse Bank. The letters turned out to have been sentby anonymous people who had circulated the said letters to variouspeople including our bank. They were letters that had been removedfrom our archives andlor stolen from the government registry.

30. The bank's management looked at the letters and decided that it was. proper that the matter be reported to the police and that the original 'set

handed over for investigations.

31. The Managing Director Mr. Sanjay Shah personally reported the matterto the police and was subsequently asked to record a police statement.

32. Upon further perusal of the said numerous letters a rather seriousdiscovery was made which made it very clear that what the bank wasfacing was a well calculated, planned and a deliberate conspiracy tobring Charterhouse Bank down.

33. Following were the letters:-

(i) A letter dated November 2004 written by Titus Mwirigi stating thatbefore the task force was established, certain documents hadbeen gathered from Charterhouse Bank prior to theestablishment of the task force and then the documents weremade available to a particular member. It is indicated that thesource was one Joseph Maina Gachari.

(ii) A document titled "Memorandum of Meetings in support of FeeNote. Under the subject Consultancy Contract: Titus MWirigi andCBK" , This confirms that on 2ih October, there was a meeting atCBK with various heads of department from CBK, KACG,JUdiciary, Ethics & Governance and some consultants.

- 10 -

We found some of the revelations uncanny because in our view such agathering was uncommon especially since KACC is supposed toconduct its business independent of any other arm of the governmentas it is also expected to investigate them. Further, the CBK inperformance of its duties and information gathered are all supposed tobe confidential and can only be used for the purpose of the Banking Act.There is also the mention of consultants. Consultants have no statutorypowers. The most disturbing issue is that in this purported investigationinto Charterhouse Bank, the Judiciary was also incorporated.

34. The documents confirm that on the 30th, October a meeting with

Charterhouse Bank employees for purposes of obtaining documents forthe task force was held and included Titus Mwirigi, Maina Gachari,Peter Odhiambo and Joseph Chege.

35. On 15t November 2004 a meeting at KACC to debrief former employeesof Charterhouse Bank and to assist in preparing for a visit to the bankby KACC was held and included Titus Mwirigi and Peter Odhiambo.

36. On 5th November, working sessions with the Heads of Department fromCBK, Judiciary and Ethics & Governance were held at the TamarindRestaurant.

37. On 11th November, a meeting was held at KACC offices to review thefinal draft and interim report .

.38. On 1ih November, a meeting at KACC with Mr. Lameck to decode

computer data on behalf of Kenya Revenue Authority (KRA) was held.

39. On 18th November, a meeting between Peter Odhiambo and Task ForceChairman was held to discuss latest information and to submit a reporton the developments at Charterhouse Bank.

40. The next document is titled "Confidential Schedule of Meetings" amongothers, item 4 records the meeting as having been held between thegovernor, the deputy governor, Melville Smith, Peter Odhiambo, TitusMurigi, item 6 was a meeting between the governor, deputy governor,Melville Smith, Director BFID, Maina Gachari, Peter Odhiambo, Lameckand Titus Mwirigi.

41. You will note that the persons mentioned Peter Odhiambo, MainaGachari, Lameck Wangumba, Joseph Chege and Titus Mwirigicontracted as consultants by CBK were meeting in various hotels in thecity including Tamarind Restaurant, Hotel Boulevard, KengelesRestaurant, ABC Place and the Gazebo in Upperhill.

42. The most significant issue is item No. 15 where it is stated that Mr.Lameck, Mr. Ng'eno and Titus Mwirigi met for the purpose ofprogramming, installing and recalling of data stolen from CharterhouseBank.

From the foregoing paragraphs, any reasonable person will come to theconclusion that the above activities were clearly orchestrated and planned to bringdown Charterhouse Bank.

We are aware of the importance and need for a whistle blower but a whistlebloweris in our view a person who passes genuine information to the authoritiesfor investigation and not a person who is hired from the onset to create violations.The acts of stealing the documents by an employee of Charterhouse Bank inorder to assist in the creation of a violation so that the bank can be raided todiscover the" violations so as to criminalize the bank and the people associatedwith the bank is unconscionable, unethical, immoral inhuman and inconsistent withall rules of civilized behaviour, all laws and human rights principles.

We would want to state here that by a letter written by Dr. Mullei dated 1st March2005, the bank was punished for the various findings stated herein and from thatdate the bank cannot be punished or continue to be harassed after it has alreadybeen punished. Even in your realm a person cannot be punished twice for thesame crime.

Further, it is now apparent and it is confirmed from the evidence that documentswere stolen and removed from Charterhouse Bank with a view to create violations.The duty to correct all the violations of missing documents as stated in the saidletter of 1st March 2005 was that of the Charterhouse Bank internal auditor andarchivist Mr. Peter Odhiambo and Joseph Maina Gachari respectively.

It is common practice that documents relating to accounts might be misplaced ormay have fallen off the files and it is the duty of the auditor and the archivist todetect and inform the account holder by asking them to provide copies of thedocuments or new ones. Under normal circumstances this would not be an issuethat would be brought to the attention of the Managing Director.

- 11 -

- 12 -

When the raid was conducted at Charterhouse the Managing Director wrotecomplaining to the Minister and the Minister was kind enough to convene ameeting in his office between CBK and Charterhouse Bank and after the issueswere discussed, the animosity subsided.

Charterhouse is one of the most well managed banks and has nothing to hide.That is the reason that Charterhouse Bank has not sacked James Muia, becauseit wants to see what he is up to. Had we been malicious as Odhiambo and Mwirigiwould have you believe, Muia would have been summarily dismissed but he is stillworking at Charterhouse as we write this letter to you.

Mr. Chairman, we would want to thank you because despite all that has happenedin the last two years, no one has brought to our notice any allegations ofimpropriety. No matter how off the mark you may be and no matter how incorrectthe inf?rmation provided to you may be, you are the first person to ask for aresponse and although this is directed to the Commissioner of Police and copiedto us, we find that we should present to you the sequence of events as they haveoccurred and the way that they are.

It may come as a surprise to you as the Chairman of KNHRC that since the mattererupted in the media, we have written consistently to the persons responsible, thegovernor and the minister seeking for an opportunity to tell our side of the storyand correct the deliberate misinformation as demanded by fair play but his hasbeen in vain.

After the adverse media publicity which started around so" March 2006,inspectors from CBK were sent to Charterhouse Bank on 6th April 2006 andanother contingent of inspectors were sent on the 18th of April. They conductedtheir inspection and concluded the inspection towards the end of May 2006resulting in a CBK report dated 21st June 2006 requiring the management torespond to issues raised therein by 4th July 2006.

However just as the management was preparing to respond to comply with the 4th

July 2006 deadline, the following day after the report was delivered, CharterhouseBank was placed under statutory management on 23rd June 2006 and a statutorymanager took over the management, control and conduct of the business of thebank.

Mr. Kiai, as a human rights crusader conversant with principles of equity, was thatright and or fair?

Simultaneously, the banks' customers' information which was either stolen andremoved from the bank by the bank's employees at a fee of US$ 300 a day paidfor by the CBK, or information collected by the said CBK Inspectors, all of whichshould have been confidential and in the custody of the Central Bank was passedto unauthorized individuals where it was released to the media and tabled inparliament. We sincerely believe that the Central Bank of Kenya under Section32(2)(b) is prohibited from disseminating information to unauthorized persons.

From all the information available, it is clear that Charterhouse Bank data andsoftware were stolen on the instigation of CBK and KRA and the said banks datawas installed at CBK and KRA more particularly at the behest of Mr. Nduati

without authority or justification.

KRA and Central Bank are professional and ethical bodies which are not expectedto be involved in clandestine activities outside what the statutes authorize them orbe used and/or abused by persons with personal vendettas. They cannot beinvolved in activities of pirating, counterfeiting and/or stealing from the institutionsthey are supposed to regulate so as to find fault in them. There is a defined andproper way to get the information that they stole legally without committing the

offences that they have committed.

Charterhouse Bank has noticed that all its large account holders are now beinginvestigated at the behest of Mr. Nduati with the view of finding violations or faultsagainst them which is unethical.

It is clear from the adverse and inexorable campaign in the media and elsewherethat there is a concerted effort to publish and disseminate false and misleadinginformation against Charterhouse Bank and the Nakumatt chain of supermarketson allegations of tax evasion. -

In our view, if Nakumatt is genuinely found to be evading payment of taxes, itbehoves the KRA to enforce collection and it is not the duty of Charterhouse Bankto compel Nakumatt to pay taxes. There should not be a blanket condemnationand someone must come out and categorically state what customs taxes have notbeen paid, what VAT taxes have not been remitted what corporate taxes, PAYEand withholding taxes have not been paid. All we have now are allegations hypedup by a hostile media and to which we have been denied a chance to respond toand where our attempts have been given a black out.

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At Charterhouse Bank, we wonder, if for instance an account holder has violatedany law, whether it is the account holder who should face the full force of the lawor whether his activities must interfere with other account holders deposits andrights.

The KNHCR has made various strong statements in respect to the Goldenbergmatter and it is a matter of fact that after the massive theft of colossal amounts ofmoney that took place at the CBK, the CBK as an institution was not interferedwith but only the persons responsible for the fraud were arrested and charged incourt i.e. the governor, deputy governor and some officers. The said stolen fundspassed through Kenya Commercial Bank and National Bank of Kenya so why wasaction only taken against the individuals responsible and there was no clamour toshut down National Bank or Kenya Commercial Bank?

Charterhouse Bank has no liquidity problem, it is in compliance with the BankingAct, the Central Bank of Kenya Act and the Prudential Guidelines. The placing. ofthe bank under statutory management is contrary to the law and raises serioushuman rights issues. This is because ordinary Kenyans who are depositorsand/or creditors are not able to transact their business causing them SUffering anddenying them a decent livelihood.

Corporate entities with deposits in Charterhouse and who transact Bankingbusiness at Charterhouse Bank have been denied access to their deposits. Theyhave also been denied withdrawals and most cannot even pay wages and salariesto a large number of Kenyans who in turn are not able to pay their debts or meettheir obligations like paying school fees, house rents, put food on the table etc.Don't these issues touch on fundamental human rights?

In view of the fact that the statutory manager is not conducting any bankingbusiness, no profit or income will be generated which will result in the statutorymanager taking money from the depositors deposits to meet the daily and monthlyexpenses of the bank to the detriment of the innocent depositors for whoseinterests the CBK is supposed to protect.

The statutory manager has also started sending employees on leave and with aview of spending the depositors money has engaged her friends from PriceWaterhouse Coopers to come and re-audit the bank at a fee of over KShs.5,000,000/- from the depositors money and this is happening immediately after theconclusion of a CBK inspection and audit exercise, which is suspect,unconscionable and what to us appears to be a deliberate effort to run the bankdown and thus legitimize its ultimate closure.

- 15 -

You may also have noticed a current and intensive campaign by notablepersonalities, government officials and being aware that CBK was payingCharterhouse Bank employees US$ 300 to steal documents from the Bank whichled to the irregular placing of Charterhouse Bank under statutory management,without any legal basis or reason and the freezing of all banking business, it isclear to us that there is a move to interfere with private businesses and itdemonstrates a well calculated and clear intention of hurting Nakumatt as well.

As the chairman of KNHRC you will note that when we felt that our rights andthose of our depositors and creditors were being violated, as law abiding citizens,we sought justice from the courts but to our disappointment even as we go tocourt, we are aware that when this conspiracy against Charterhouse Bank wasbeing orchestrated, it is clearly indicated that the judiciary was present asevidenced by the meeting schedule aforementioned. The results are obvious.

Mr. Chairman, the bank's documents were stolen in the year 2004. No seniormember of Charterhouse Bank has ever made any attempt to contact our formeremployees - never. Why should you then allege that we are responsible for theirsafety? After they stole the documents and despite having received US$ 300 aday for those acts, all of them were rewarded with jobs at Central Bank of Kenya,what interest would we have in them two years later? What is it that they havedone now that we are not aware of, that they want to preempt by making falseallegations? Can't you see you have been duped and are being used?

In our view, and in reference to Section 392 of the PenalCode, it would be mostappropriate for a proper police report to be made so that proper investigations canbe conducted and the truth can be established and the culprits arrested andcharged before a court of law. For the first time in the history of this country webelieve that we have a Police Commissioner who is free of political manipulation.As you are aware, the law provides for punishment for a person who gives falseinformation to a person employed in a public office.

It has become exceedingly obvious that there is a concerted effort beingorchestrated by some high powered individuals against Charterhouse Bank andNakumatt. These individuals have successfully enlisted the support of certainpersonalities in the media houses, some few members of parliament and someindividuals from the civil society movement in a campaign to bring CharterhouseBank down and the Nakumatt business.

- 16 -

We would not be further from the truth if we assumed that the allegations of theindividuals whose security is purported to be at risk are just another attempt toinclude you in this adverse campaign against us so as to give it credence becauseit is obvious that you have a platform.

Mr. Chairman, as a custodian of the only organ that is supposed to protect humanrights, we would request that you do not join in a vilification and odious campaignwhose origins and cause you are not privy to, that is aimed at destroying and orviolating the human rights of some people whose rights you should also beprotecting.

The KNHRC which you chair is the custodian of human rights and entitlements forall, which include individual human rights as enshrined in the constitution. Weknow you are a long time crusader of human rights, impartiality, fairness, ethics,rule of law and natural justice.

From ttie facts enumerated above, our simple question to you is, given that theCBK recruited employees at Charterhouse Bank and paid them US$ 300 per dayto steal documents, software and manipulate data and were later rewarded withjobs at the Central Bank of Kenya for a job well done which has now enabled CBKto illegally take over Charterhouse Bank and which has also allowed them tofreeze all manner of business, what further damage can they cause now that theyare in charge, what other information can they manufacture, manipulate and orplant in Charterhouse Bank to help them achieve their goal of closing it down?

Charterhouse Bank is the first bank in history to be placed under statutorymanagement even though it has a strong liquidity base, but it is this strong liquiditybase that they are trying to destroy so that they can now claim to closeCharterhouse Bank for lack of adequate liquidity. The prolonged closure and dillydallying and chasing away the banks bona fide depositors and creditors are allmeant to discredit the bank, wear the customers down and force them to seekservices elsewhere and therefore simplify their task of the intended closure of thebank. That is the kind of campaign that you are being dragged into.

If all these protracted activities by CBK and others against Charterhouse Bank andits depositors and creditors, the witch-hunt, the malicious vilification and adversityare all happening in broad daylight in a country that espouses democraticprinciples, we are left to wonder if these are not fundamental human rights issues,then what are human rights?

All the directors of the bank that you have named in your letter are firstlyhusbands, fathers, sons, brothers etc. they are human beings who cherish familyvalues and good morals and are entitled to protection of their human rights too.What evidence could you have to make you put their names on paper as peoplewho are threatening the lives of others? Is it that casual to accuse an innocentperson of threatening another's life? Most of the directors do not even know thepeople that you are talking about and Mr. Chairman how do you find it so easy tomake allegations such as you have made? We know there is no evidence sincewe have never threatened or ever wanted to harm anyone, so how did you decidethat those you named deserve protection and we do not? They stole data, gotgood jobs with CBK and have been working there for almost two years and all of asudden we are now threatening their lives? Please open up your eyes.

And now that you have made your accusations, since you are the custodian ofobservance that human rights are not infringed, tell us Mr. Chairman, where do wenow go for recourse? Who will hear our side of the story? After the accusations,who wilt protect us and our families since we believe that this is part of the ploy' todestroy the bank and then come after the directors, where do we now turn forjustice and protection of our own human rights?

Despite your having written to the Commissioner of Police and circulated the saidletter to all the directors of Charterhouse, on Tuesday the 18th July 2006, youappeared on television commenting on the plight of whistle blowers while in thesame breadth you were defending your organization from allegations of misuse offunds. You stated that your organization is audited by the Controller and AuditorGeneral. Your other comment was in the form of praise for Peter Odhiambo forhaving been awarded a job at CBK on the purported whistle blowinq againstCharterhouse Bank.

We wish to express out disappointment because on various occasions when youhave appeared on Television talking on the need for protection of human rights,justice and fairness, you made us believe that you are a fair and impartial personwho adheres to the rule of law, we saw a person who would make a suitablecandidate for appointment as a judge. But from your current utterances on theelectronic media and from the contents of your letter, it is clear that a person whopasses judgment and condemns others on the basis of rumours and allegationswithout according the other side an opportunity to defend themselves would not becompetent to arbitrate where fairness, impartiality, rules of natural justice and therule of law are mandatory in order to determine issues.

- 17 -

As a lawyer who has read section 392 of the Penal Code and we would like toconfirm to you that we have been reporting these matters to the police since theyear 2003 to-date. We have unfailingly been reporting that some employees ofCharterhouse Bank were stealing documents from the bank. This is criminal andwe believe that you are quite conversant with the laws that criminalize theftwhether by servant or otherwise. A criminal act remains a criminal act no matterwho the perpetrator is.

By reporting the matter to the police, we did the correct thing. If you had taken thetrouble to ask us, or even sought an explanation from us, after hearing both sidesof the story, we would have helped you to make a well founded opinion and weare sorry that you did not find it necessary to talk to us.

Again as the Chairman of KNHCR and as a lawyer who has been involved incrusading for fairness, respect for human rights et ai, we sincerely believe that youknow that a whistle blower is a person who out of a genuine concern and in thepublic Interest, reports any illegal activities or wrong doings of his own free will,without inducement or promises and without malice or ill-will.

Peter Odhiambo was a senior officer of Charterhouse Bank who together withothers were "employed by Charterhouse Bank to perform the duties that make abank compliant with the relevant laws. It was the duty of Peter Odhiambo to auditthis process at a salary of over KShs. 100,000.00 per month. He was thus runninghis internal audit department without much supervision and or interference.

We are not sure whether you are aware that he was being induced by certainother individuals to steal the banks documents at a lucrative fee of US$ 300 a day.Surely, working for these people at a rate of US$ 300 a day for 20 days, in amonth he would make a side earning of approximately KShs. 400,000/- per monthon top of his salary and with a further incentive of a job at CBK after perfecting thestealing, this would be hard to pass up. Is this whistle blowing in your opinion?

Our records show that Mr. Titus Mwirigi who was also contracted under a similarfee of US$ 300 per day is given as Odhiambo's referee in his employmentrecords. Are these people what you term as whistle blowers and for whom youare actually asking the state to further provide for them?

Further, since all the four purported whistle blowers are all former employees ofCharterhouse Bank, it cannot be humanly possible that the whistle blowers whoattract attention are all found or are from this bank.

- 18 -

There is clear evidenos that these people commilled a crime for a fee and/orreward and we have continued to report these matters to the police. It is alsoclear from your letter that you are well conversant with the full details andinformationpertaining to the directors and shareholders of Charterhouse Bank. Itis therefore obvious that it is the directors whose lives are purportedly in dangerand not those of the persons that you mention in your leller. A person who stealsdocumentsfor money is also capable of killing for money.

By a copy of this letter, we the directors and shareholders of Charterhouse Bankrequest that the Commissioner of Police do provide us with adequate security as itis obvious that our lives may be in danger given the magnitude of the conSpiracyagainst us which seems to be snow-bailing.

You were here when the commission probing the Goldenberg Scandal was takingplace and where Mr. David Munyankei testified. Your praises for the CBK cannotbe genuine as it is the Central Bank that sacked Munyankei the CBK neverreinstated him. But ironically instead, they can contract Peter Odhiambo andcompany at US$ 300 each per day and with promises of plum lucrative jobs at theCBK once the job is done.

As a human rights activist and the Chairman of KNHCR, is this discrimination, is itfair, or what is it in your opinion? In Our view this boils down to abuse of officeand/acts done for personal gain.

We sincerely hope that in respect of the property belonging to Charterhouse Bankwhichwas stolen by these people i.e. data, software, files, documents etc. the fullforce of the law will be brought to bear on the perpetrators of the theft and so thatwe can recover our property.

As we come to the conclusion of this letter, we cannot belabour the profundity ofour pain at the remote possibility that you may just have been recruited by thesepeople who we believe have been stealing documents from our bank and are nowusing your organization to legitimize their illegal acts, by seeking protection tomake something illegal look good in the eyes of the public who will be arguing thatif your organization has sanctioned their acts, then surely the other side isnecessarilyguilty.

We believe that civil societies exist for public good and should never be used toinjure or hurt innocent people without justification or reason. They exist for thegood of humankind, a/l humankind.

- 19 -

- 20-

We are therefore unable to demand any apology from you or your organization butwe hope that once you have read the facts stated herein, your conscience and theobjects of your commission will guide you towards the truth, and like Jesus said,the truth shall set you free.

We write to you this letter being reminded of the words of the Late HonourableElijah Mwangale during the J M Commission of inquiry who said that the hyenawho spoke to the rock commented that 'even if you don't respond, I have toldyou and I know you have heard me'.

Yours faithfully,

.S.SH~DIRECTOR

CC: Major General Hussein Ali, EBSCommissioner of Police

Hon. Martha Karua, EGH, MPMinister for Justice & Constitutional Affairs

Hon. Amos Kimunya, EGH, MPMinister for Finance

Hon. John Michuki EGH, MPMinister of State in the Office of the President

Hon. Amos. S. Wako, EGH, EBS, SC, MPAttorney General of the Republic of Kenya

Mrs. Jacinta MwatelaGovernor of the Central Bank of Kenya

Justice Aaron RingeraDirector, Kenya Anti-Corruption Commission

- 21 -

Mr. Michael Waweru

Commissioner General, Kenya Revenue Authority

Ms. Rose DethoStatutory Manager, Charterhouse Bank

Mr. Keriako TobikoDirector of Public Prosecutions

DirectorCriminal Investigations Department

The Directors of Charterhouse Bank.

7-1-\ -- .-,1

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INTERllVI REPORTAN INTERII\'l REPORT uv rut TASK FORCE INVESTIGATING ECO~O;\IlCCRli\lES BY CHARTERllOUSE 13ANK AI\D RELATED COi\lPANIES

INTRODUCTION

The task force met on zs" and 291h October 2004 to appraise themselves with the taskand draw up an action plan,

OBJECTIVE

The learn defined their objectives as:

1.1 To institute an economic crime investigation against the COI11JKlllles

mentioned below with a view to identifying potential Tax evasion, illegal,

money transfers or violation of Banking Act with the connivance of

Chartcrhouse Bank Ltd, The companies arc: _

1.1.1 Creative Innovations Ltc!.

1.1.2 Sailcsh Prajapati

1.1.3 D.Shah

1.1.4 Kariuki Muigua & Co. (Clients Accounts)

1.1.5 W. E. Tilley (Muthaiga) Ltd

1.1.6 Paolo Sattanino

1.1 .7 Tusker M attrcsscs Ltd1.2

To establish whether the Bank aided the said companies in committingeconomic cnmes

1.3 To identify the Directors of Charterhollse Bank and establish a link with

the related companies in a possible network for committing economic

crimes with a view to breaking it

1\1ETllODOLOCY

The task force undertook the following steps to achieve its objective:

1.4 Carried out a search at the Registrar of Companies offices for d .ctails of

the companies referred above to obtain their registration details,

L

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1.5Traced the physical addresses of the said companies to establish theirlocations.

I.GCarried out a surprise visit to Charterhouse Bank to obtain bank account

details in respect of various accounts held by the above listed companiesand individuals

1.7 Carried out a surprise visit to the specified comparues and obtained

documents and records relating to their business activities for the periodstarting 1st January 1999 to 4th November 2004

The visits to the companies' prcmiscs and thc bank were carried out simultancously.

1.8Wrote to the Kenya Revenue Authority and obtained tax records in respectof the companies listed above

Started si fling through the documents obtained from the companies and

the bank to try and establish any incidence of VAT evasion

1.9

S1l0RT TERM SCOPE

The team set out a short-term objective, which was to try and establish any likelihood of

VAT evasion by the said companies [or the period beginning 2nd of May 2003 toSeptember 2004

e

The reason [or this short-term scope was to take into account the [ollowing factors:

1. To take advantage of the period Kenya Anti - Corruption Commission became

operational and \vithin which period it can legally investigate and prosecute

2. The (cam appreciated that the exercise is complex and will take longer to

complete hence it was necessary to define a short term goal for immediate action

while the long term objective wil! be pursued systematically as the investigationexpands

3

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I:'-lTERl~l FINDINGS

CREATIVE INNOVATIONS LTD

from the documents collected from the company's prerniscs and from Charterhouse

Bank, the following was observed:

»: That the company operates four bank accounts with the Charterhouse Bank

r Only t.vo accounts arc disclosed in the company's official records. These arc:

o CA 01 - 001000009

o CA 01 - 0001000275

Ir .~~

j

r: The other two accounts as shown below with deposits amounting to Kshs.

262,105,659 are not disclosed in the company's Balance Sheet for the period

under review (ie from 2nd May 2003 to October 2004).

o CA 01- 01000074.

o CA 01· 01000206

Kshs. 237,268,640

Kshs. 24,837,019

262,105,659

r: It is evident that these deposits arc company income from sales and have not been

assessed for VAT and Income Tax since they are not disclosed in the companies

official records

;r. The figure shown above is for the period under review starting from May 2003 to

October 2004. It will certainly grow once the prior period is computed

Other observations

'r The company mainly deals with imports most of which is supplied to Nakurnatt

Holdings Ltd. It was observed that the company in respect of these supplies to

Nakumatt I Ioldings maintains no proper documentation

r It has also come to the Commissions knowledge that the company is a major

supplier of certain oils/lubricants to the following corporations the incomc of

which may not have been disclosed in their books

o Kenya Ports Authority

o Kenya Airports Authority

o Kenya Power 8: Lighting Company

Steps rell1aining to be u ndcrtakc n

r Seck an cxp lanation from the Directors of Creative Innovations about the two

accounts held in their company's name at charterhouse Bank

).- If no satisfactory explanation is given, assume the amounts to be sales income and

assess V A T and Income Tax on it

:,.- Prepare to charge the company and the Directors with the offence of committing

an economic crime contrary to section 45 (1) (d) of the Anti-Corruption andEconomic Crimes Act No ] of 2003

r Assist KRA assess the income from the same two parallel accounts covering the

period from 1999 to April 2003 and assess VAT on it and pursue appropriate legalaction on the offenders

r Obtain details of payments and invoices the above mentioned corporations may

have made to the company and establish whether the income had becn included in

their 0 Ificial books of Accounts and assess for VAT and Income Tax.

;.... Get an explanation on the imported supplies made to Nakumatt Holdings Ltd and- ;lSSCSS the tax implication

»r-;

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Offence likely to he disclosed

Failure to pay taxes contrary to section 45 (l) (d) of the Anti-Corruption and EconomicsAct of200]

L ,-

f\V E TILLEY (]\1UTJIAIGA) LTD

From documents obtained from the bank and the company's premises, the following hasbeen observed:

r The company is a fish processing firm with exports forming 95% of their salesand the remainder 5% being local sales

r From the above observations it follows that the bulk of their sales proceeds arc inforeign currency i.c. US Dollars

r The company has three other related companies for which they allege to handle

lheir export through Kenya. The uircctorships are the same for all the four

companies. The three companies arc:

5

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II, I o Prime Catch Ltd Tanzania

'0 i\lara fish Packers Ltd Tanzania

o Victoria Fish Packers & Processors Ltd

r The company operates six bank accounts spread as shown below

o Chartcrhousc Bank

• CA01-600178

• Cl\ 01 - 01000630

US DOLLAR ACCOU~T

KSHS, ACCOUNT

o Imperial Commercial Dank

• 100805 162

• 100805 006

us DOLLAR ACCOUNT

KSHS, ACCOUNT

o Fidelity Commercial Accountr ,"L-· • 11502443

• 11102442

US DOLLAR ACCOUNT

KSHS, ACCOUNT

r: The total credits for the period January to September 200.+ into the six accounts

amount to Kshs 5,893,464,798, This figure is not adjusted by opening and closing

. debtors although the deposits still appear to be on the higher side

).;- The total sales for the same period amount to Kshs 1,351,874,269

).;- There arc numerous transfers from dollar accounts to shilling accounts ill the

same bank and across the other banks as well raising the possibility of double

credits in computing the above figure

»: There is also evidence of heavy trading in foreign currency between the company

and several Forcx Bureaus in the city

:r The company claims to receive export proceeds for its related cornpames and

banking it ill its own accounts

»: Il was observed that the company banks a lot in Afro Forcx Bureau bank account

with Fidelity Commercial bank

r l lugc payments arc also ma.lc to persons who on the face of it do not seem to

have any relationship with the nature of the company's business activities

Steps remaining to be undertaken

r: Adjust the figure of Kshs. 5,S93,..f(J.+,';"n by cross account transfers, opening JI1J

closing debtors and the declared sales

~

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fr:,.

Obtain details and information 011 Directors bank accounts held in the same bank

and in other banks and establish whether any company proceeds arc banked inthem

Obtain an explanation on the surplus amount from the Directors of the company

If no satisfactory explanation is obtained, assess VAT and Income Tax on thesurplus

r Charge the company and the Directors with the offence of committing an

economic crime contrary to section 45 (I) (d) of the Anti-Corruption andEconomics Crimes Act of 2003

Compute income into the same accounts for the period starting from January 1999

to Apri I 2003 and levy the appropriate taxes and pursue the necessary legal action

Obtain the details of vehicles sold to one of their companies for which details of

the transactions have not been properly disclosed

Obtain from the company documents relating to vehicles sold to Prime Catch Ltdone their related companies

r: Establish the nature and purpose of huge payments made to certain persons

r Get an explanation on huge withdrawals and deposits from the some of theaccounts held in their banks

r Obtain an explanation in regard to transactions with certain Bureaus III town

I-f-'

especially the Afro Forex Bureau.

).- Pursue other leads that wi II emerge

Offence likely to be disclosed

I. Failure to pay taxes contrary to section 45 (I) (d) of the Anti-Comlption andEconomics Act of 2003

2. Money laundering activities

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TUSKER I\I:\TTRESSES L TO

A scrutiny of the documents obtained from the company's premises and the Charterhousc

Bank revealed the following:

;.:- The company operates a current bank account No 301 which had a balance of

Kshs. 4.3 billion from 2nd 1\'1a)' 2003 to September 20004

r: The bank account was opened in the year 2001 but was not disclosed in the

official books of accounts for the years 2001 and 2002

r: However Chartcrhousc bank is included in the final accounts for the years 2003

and 200..+

II· ..··

;.... We have also discovered that the company's Directors operate numerous other

accounts with the Chartcrhouse Bank in the form of fixed deposit accounts,

savings accounts, and current accounts and call accounts. These accounts

numbering about seventy-five reflect huge balances

LI

Steps nmaining to be undertaken

r Establish when the account 301 at Charterhousc Bank was incorporated in the

official books of accounts

r Obtain from Churtcrhousc Bank and Barclays Bank details of other accounts held

by the company's directors and assess whether proceeds from the company are

deposited in those accounts

> Determine whether any of the period under review was excluded

r Assess tax on undeclared income for the period under rcvie\':

;.... Charge the directors and the company with the offense of tax evasion

>- Pursue source of imported goods sold by the company. There were no import

documents found in the company's premises

.r Cover the period starting from 1999 to April 2003

r Pursue any other leads

7

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J'1

OTIIER ENTITIES

f

Bank account details were sought for the follo\\'ing entities and below are the

observations from the information obtained from Charterhouse Dank

KARIUKI MUIGUA..\: CO. (CLIENTS ACCOUNTS)

Charterhousc Managing Director declined to dindge any infonl1Jtion or documents with

regard to this account citing a High Court order, which he claimed, barred him from

disclosing any information with regard to the above named accounts. He could only

produce a court order barring certain respondents from accessing the information with

regard to that bank account of which the Kenya Anti-Corruption Commission or its agentwas not among them

, Howcver, according to documents availed from other sources within the task force, one

of tile accounts, C1\ 01 - 000563 received deposits amounting to Kshs. 386,548,898

starting from 81h

March 2004 to 151 Septcmber 2004. Informatinn from the same source

also- indicated that the bank acts on unsigned instructions supposedly from Kariuki

Muigua, raising the possibility that the instructions arc prepared within the bank. It is also

believed that the account is actually operated by some of the big businesses in town but

shielded by the cloak of clients' confidentiality,

Steps to be undertaken

Since the court oreler barring access to any of Kariuki MuigU3S accounts does not cite the

Kenya Anti - Corruption Commission or its agents, then the warrant to investigate issuedto Henry Mwithia should be enforced.

Offence likely to be disclosed

failure (0 pay taxes by the companies using this account as parallel accounts contrary to

section 45 (I) (d) of the Anti-Corruption and Economics Act of200J

s

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'I D SHAll ACCOU~T

This account has received a total of Kshs. 601,968,171.33 in deposits for the period

starting from 5th i\lay 2003 to 3'd November 2004 mostly in huge cash deposits, It is also

rcf1ccts huge cash withdrawals. It is believed that the related companies usc this account

as a secret parallel account through which to hide sales proceeds. The account opening

documents could not reveal the owner.

I.

Steps to be undertaken

r: Collect debit and credit vouchers effecting entries into this account and establish

the source of the funds

r Interview Chartcrhousc bank officials and try to trace the owner of the account

'r If a case is established of VAT and Income Tax evasion, then charge the

companies their directors with committing an economic crime

Offences likely to be disclosed

Tax evasion contrary to section 45 (1) (d) of the Anti-Corruption and Economics Crimes

Act of 2003

SAILESH PRA.JAPATI ACCOUNT CA 01 - 000148

rThe bank claimed that account-opening documents in respect to this account were burnt

clown in a fire.

l,{ However, between 2nd May 2003 and 2nd August 2004 the account received Kshs.

551,518, 102.25 in the form of huge cash deposits, and cheques from Nakummatt

Holdings. The account also reflects cash withdrawals in an usually huge amounts. It is

believed that this is account is also used by big business in town like to hide sales

proceeds.

Steps to he undertaken

r: Collect debit and credit vouchers cffcctin:; entries into this account and establish

the source ofthe funds

~~. '--------------

,f'r'

»: lnlcrvicw Chartcrhousc bank officials and try to trace thc owner of the account

»: If a case is cstablishoj of VAT and Income Tax evasion, then charge the

companies their directors with committing an economic crime.

PAOLO SATTAl\I':;O ACCOUNTS

Mr. Paolo Sauanino operates three foreign accounts with Chartcrhousc Bank.

I Iowcvcvcr, thc bank opening documents contains the name of Capricorn SRL. The bank

officials claimed that those are the documents for the account. The bank opening

documents are an account opening form and t\VO letters signed by Paolo Sattanino, one

as himself and the other as the Managing Director of Capricorn SRL The letters

authorize the bank to act on E -]\,rail instructions from the writer.

The three accounts are: -

1. ACCOUNT NO. CA 01 - 60006 A US DOLLAR ACCOUNT

A scrutiny of the bank statement revealed that the above account received USD

657,?51.2 (the equivalent of Kshs. 52 million) between 15t April 2004 and 3rd November

2004 by way of transfer mostly from Creative Innovations and Kings\\'ay. Telegraphic

transfer of foreign exchange takes out an equivalent amount to recipients like severalrecipients like Tradcx.

Steps to be undertaken

Establish the purpose of the funds transferrcd into his account

Establish the tax implications 011 the activities of this account.

Assess appropriate tax

Charge those responsible for tax evasion with the offence of committing aneconomic crrmc

:,... Pursue the destination of the funds transferred out of the account by telegraph and

establish whether any laws have been contravened.

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2. ACCOUNT ;\0. CA 01 - 8001.t5 EuRO ACCOU;\T

This account received a total of Euros 392,387.49 (the equivalent of Kshs. 40,808,298) in

the short period between I st April 200.+ and 22",] October 200'+. Similarly, the deposits

were by way of transfers from Creative Innovations and D Shah accounts. Debits in the

account a by way of telegraphic transfers to foreign destinations.

Steps to be 1I n dcrt akcn

r: Establish the purpose of the funds transferred into his account

r Establish the tax implications on the activities of this account.

r Assess appropriate tax

,;- Charge those responsible for tax evasion with the offence of committing anrI .- economic crime

;;... Pursue the destination of the funds transferred out of the account by telegraph and

establish whether any laws have been contravened.

3. ACCOUNT NO. CA 01 -700154 A BRITISH POUND ACCOUNT

I.Between I st April 2004 and 22nd October 2004, the above account received a total of

4,748.20 British Pounds (the cquivalcn t of Kshs. 712,2UU) in deposits mainly from DShall.

Steps to he undertaken

,;- Establish the purpose of the funds transfcrrcd into his account

r: Establish the tax implications on the activities of this account.

r Assess appropriate tax

r Charge those responsible for tax CVJ.Slon with the offence of committing all

ccononuc crnnc

, .

11

12

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r Pursue the destination of the funds transferred out of the account by telegraph and

establish whether any laws have been contravened.

3. ACCOUNT ~O. CA 01-700154 A BRITISH POU","D ACCOU[';T

)

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Between 1st April 2004 and nnJ October 2004, the above account received a total of

4,748.20 British Pounds (the equivalent of Kshs. 712,200) in deposits mainly from D

Shah,

Steps to be undertaken

>-- Establish the purpose of the funds transferred into his account

r Establish the tax implications on the activities of this account.

;;.- Assess appropriate tax

r: Charge those responsible for tax evasion with the offence of committing an

ccononuc crnnc

»: Pursue the destination of the funds transferred out of the account by telegraph and

-cstablish whether any laws have been contravened.

Offence likely to he disclosed

1. Failure to pay taxes contrary to section 45 (I) (d) of the Anti-Corruption andEconom ics Ad of 2003.

2. Funds transfer to secret destination.

1(1. Prepared by: 11ENRY 1\11\IWITIIIA

30'1'11NOVEl\lllER 2004

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INrrERI1VI REPORT

,r----l_,=.~-~~=.:""=:..-' _

AN INTERIi\1 REPORT BY TIlE TASK FORCE INVESTIGATING ECOi'\01\lICCRli\IES BY ClIARTERIlOUSE BA~K A~D RELATED COl\lPANIES

(Updated from the iz" November 200-l interim report ,,,it!; latest findings)

INTRODUCTION

The task force met on 28lh and 29th October 2004 to appraise themselves with the taskand draw lip an action plan.

OBJECTIVE

.:~The team defined their objectives as:

1.1 To institute an economic cnrnc investigation against the companies

mentioned below with a view to identifying potential Tax evasion, illegal,

money transfers or violation of Banking Act with the connivance of

Chartcrhouse Bank Ltd. The companies are: _r1.1.1 Creative flJJIUValiuJls Ltd.

1.1.2 Sailcsh Prajapati

1.1.3 D. Shah

1.1.4 Kariuki Muigua & Co. (Clients Accounts)

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1.1.5 W. E. Tilley (Muthaiga) Ltd

I.].G Paolo Sattanino

1.1. 7 Tusker Mattresses Ltd1.2 To establish whether the Bank aided the said companies in committing

ccononuc cnrncs

1.3 To identify the Directors of Chartcrhousc Bank and establish a link with

the related companies in a possible network [or committing economic

crimes with a view to breaking it

METHODOLOGY

The task force undertook the following steps to achieve its objective:

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1.4Carried out a search at the Registrar of Companies offices for details of

the companies referred above to obtain their registration details.

Traced the physical addresses of the said companies to establish theirlocations.

1.5

1.6 Carried out a surprise visit to Ch::1lierhouse Bank to obtain bank account

details in respect of various accounts held by the above listed companiesand individuals

I.7 Carried out a surprise visit to the specified companies and obtained

documents and records rebting to their business activities for the period

starting 1sl January 1999 to 4th November 2004

The visits to the companies' premises aud the bank were car ricd out simultaneously.

1.8 Wrote to the Kenya Revenue Authority and obtained tax records in respectof the companies listed above

1.() Started sifting through the documents obtained from the companies and

the bank to try and establish any incidence ofY A T evasion

SJ IORT TEI{J\I SCOPE

The team set out a short-Icrm objective, which was to try and establish any likelihood of

Y AT evasion by the said companies for the period beginning 2nd of May 2003 toSeptember 2004

The reason for this short-term scope was to take into account the following factors:

I. To take advantage of the period Kenya Anti - Corruption Commission became

operational and within which period it can legally il1\"estigate and prosecute

2. The team appreciated that the exercise is complex and will take longer to

complete hence it was necessary to define a short term goal for immediate action

while the long term objective will be pursued systematically as the invesugationexpands

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fI:'iTERL\l FINDII\GS

CREATIVE I;\i\OVATIO~S LTD

From the documents collected from the company's premises and from Charterhousc

Bank, the following was observed:

'r That the COIllP:lI1Y operates four bank accounts with the Charterhouse Bank

»: Only two accounts are disclosed in the company's official records. These arc:

o CA. 01 - 001000009

o C1\ 01 - 0001000275

r The other two accounts as shown below with deposits amounting to Kshs.

262,1 U5,659 arc not disclosed in the company's Balance Sheet for the period

under review (ie from 2nd May 2003 to October 200-+).

o CA 01 - 01000074

o C1\ 01 - 01000206

Kshs.237,268,640

Kshs, 24,837,019

262,105,659

';- II is evident that these deposits arc company income from sales and have not been

assessed for VAT and Income Tax since they are not disclosed in the companies

official records

Il.

).;- The figure shown above is for the period under review starting from May 2003 to

October 2004. It will certainly grow once the prior period is computed

r Computed VAT evasions plus penalties for the period amount to Kshs.

202,4lJ1,498 for that period.

;... The corresponding VAT and Additional Tax liabi lity for the period May 2003 to

October 2004 is Kshs. 44,839,492.

0111 CIO ob scrva tio n S

r The company mainly deals with imports 1110st of which is supplied to Nakumatt

I Ioldings Ltd. It was observed that the company in respect of these supplies to

,'\akull1attl1oJdil1gs maintains 110 proper documentation

o Prime Catch Ltd Tanzania

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. ."r It has also come to the Commissions knowledgc that the company lS a major

supplier of certain oils/lubricants to the following corporations the income of

which may not have been disclosed in their books

o Kenya Ports Authority

o Kenya Airports Authority

o Kenya Power 8:. Lighting Company

Next course of action

;..- Compile a case file and recommend charges on the Directors of Creative

Innovations for failure to pay VAT and Additional Tax in the tune of Kshs.

44,839,492 to the Kenya Revenue Authority in the period from March 2003 toOctober 2004

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r The Kenya Revenue Authority to recover from Creative Innovations Ltd the

amounts owed in VAT and Additional Tax.

Offence likely to he disclosed

Failure to pay taxes contrary to section 45 (1) (d) of the Anti-Cornlption and EconomicsAct of2003

\V E TILLEY (MUTIIAIGA) LTD

From documents obtained from the bank and the company's premises, the following hasbl:(;llobserved:

;..- The company is a fish processing finn with exports fonning 95% of their salesand the remainder 5% being local sales

;. from the above observations it follows that the bulk of their sales proceeds arc inforeign currency i.e. US Dollars

r The company has three other related companies for which they allege to handle

their export through Kenya. The directorships are the same for all the fourcompanies. The three companies arc:

o Mara Fish Packers Ltd Tanzaniao Victoria Fish Packers & Processors Ltd Uganda

r: The company operates six bank accounts spread as shown below

5

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o Chartcrhousc B::lI1k

• CAOI-600178

• CA 01 - 01000630

us DOLLAR ACCUL'NT

KSHS. ACCOUNT

o Imperial Commercial Bank

• 100805 162

• 100805 OOG

US DOLLAR ACCOUNT

KSHS. ACCOUl'iT

o Fidelity Commercial Account

• 11502443

• 11102442

US DOLLAR ACCOUNT

KSHS. ACCOUNT

;;.. The total credits for the period January to September 2004 into the six accounts

amount to Kshs 5,893,464,798. This figure is not adjusted by opening and closing

debtors although the deposits still appear to be on the higher side

r The total sales for the same period amount to Kshs 1,351,874,269

:,- Then; are numerous transfers from dollar accounts to shilling accounts 111 the

same bank and across the other banks as well raising the possibility of double

. credits in computing the above figure

r There is also evidence of heavy trading in foreign currency between the company

and several Forex Bureaus in the city

).:- The company claims to receive export proceeds for its related companies and

banking it in its own accounts

:r It' was observed that. the company banks a lot in Afro Forex Bureau bank account

with Fidelity Commercial bank

;;.. Huge payments are also made to persons who on the face of it do not seem to

have any relationship with the nature of the company's business activities

Additional findings

r: TOt:l1 sales for the period May 2003 to October 2004 amounted to Kshs.

5,230,206,7<J1.25 while the total deposits into their official bank accounts amount

[0 Kshs. 5,630,6 11,476.00.

...,r

I.(

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? Allowing lor exchange rate gains (losses) it seems the deposits in their official

bank accounts compensate for the sales proceeds of the three sister companies.

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r But the company only declares the sales proceeds of the Kenyan operations to theKenyan Tax Authority.

'r No evidence however IS seen of remittances to the Tanzanian companies toaccount for their exports,

»: There is evidence that the company trades heavily In foreign currency with a

number of Forcx Bureaus.

r .

I

Next course of action

r Contact the Tanzanian Revenue Authority to find out whether the Tanzanian

sister companies declare their export earnings in Tanzania.

,. If the amounts are not brought to charge in Tanzania, then the relevant Kenyan

tax will be assessed on the balance not declared in Kenya.

:r Establish the implications of trading in foreign currency, assess the income

earned, determine the tax implications and recommend appropriate action.

r Prepare a case file and recommend charges on the Directors for failing to declare

income and pay taxes to the Kenya Revenue Authority.

Offence likely to be disclosed

1. Failure to pay taxes contrary to section 45 (1) (d) of the Anti-Corruption andEconomics Act 0[2003

2. Money laundering activities

TUSKERl\IATTRESSES LTD

A scrutiny of the documents obtained from the company's premises and the ChartcrhouscDank revealed the following:

r The company operates a current bank account No 301 which had a balance of

Kshs. 4.3 billion from 2nd May 2003 to September 20004

r The bank account was opened in the year 2001 but was not disclosed III the

official books of accounts for the years 200 I and 2002

r However Chartcrhouse bank is included in the final accounts for the years 2003and 200.+

r We have also discovered that the company's Directors operate numerous other

accounts with the Charlerhouse Dank in the tOIlH of fixed deposit accounts,

7

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savings accounts, and current accounts and call accounts. These accounts

numbering about seventy-five reflect huge balances

Additional findings

";.- Going by banked sales and V AT declared account, we observe that the

supermarket has under declared their sales by Kshs. 911,(19)87 between July

] 999 to June 200-1- which would attract a VAT levy of approximately 1G0,998,230

in principal amount alone.

r The corresponding figure [or period under review i.e. July 2003 to June 200..+we

find an under-declaration of Kshs. 59,397,968, which would attract a V AT levy of

approximately Kshs. 9,503,674 in principal amount alone.

r Between July 2002 and June 2004, the company also understated their purchases

by KsI1S. 437,679,937, which would attract Kshs. 75,808,414 in principal VAT

levy.

r The corresponding figure [or July 2003 to June 2004 is Kshs. 148,698,662, which

would attract the VAT levy of Kshs, 23,791,785 in principal sum.

r: The above figures can only be confirmed after:

o Crosschecking with the sales account in the computer.

o Cross check sales to other supermarkets in the chain

o Analyzing stock records

o Verifying the input tax

Next course of actionJ

t.( ;.:- Access the computer data and verify the figures quoted above.

;..... Establish the final taxable amount and assess tax.

r Obtain Bank account records of the numerous fixed deposit, call deposits and

current account deposits of the company and the Directors held at Charterhouse

Dank and Barclays Bank and investigate if any of the supermarket sales proceeds

are banked directly into those accounts

r Prepare a else file and recommend charges on the Directors of Tusker .\Iattrcsses

for failing to declare income and pay taxes clue to the Kenya Revenue Authority.

r: Kenya Revenue Authority to commence recovery of the taxes due.

,.,I

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The second phase of the investigations will focus on the remaining four entities with the

aim of unraveling the network of secrct bank accounts with the attendant tax evasions,

illegal money transfers and violation of banking rules by big businesses. This second

phase should start as soon as thc first phase is considerably concluded.

Prepared by: HENRY i\ll\l\VITIIIA30TII l\OVEi\lBER 200-l

Ir.

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EXECUTIVE SUl\Ii\'IARY

INTERIl\'1 REPOR1~

AN INTERIl\I REPORT ill' TIlE TASK FORCE INYESTIGATI:\G ECO~O;\IIC

CIUl\IES ill' CHARTEIUIOUSE ilA~K AND RELATED COl\lPA1'ILES

'r The Kcnya Anti-Corruption Commission backed by officers from the Kenya

Rcvenuc Authority and the Banking Fraud Invcstigation Department made a

surprise raid to the follmving four establishlllclltS.

1) Charterhouse Bank

2) Tusker Mattresses

3) Crcati vc Innovations Lim ited

4) WE Tilley (Muthaiga) Ltd

r From the Chartcrhousc Bank, account records for the following companies andpersons were collected:

J) Tusker M attrcsscs

2) Creative Innovations

3) WE Tilley (Muthaiga) Ltd

4) Sailesh Prajapati

5) D Shah

G) Paolo Sattanino

;.:. For the convenicnce of opcrating within the period within which the Kenya Anti-

Corruption Commission can Icgnlly investigatc, the Task Force decided to

initially scrutinize the records of the first three companies starting from 2nJ 1\lay

2003 to date with a view to est:.tblishing any illcidence of VAT and Income Taxe\'aSlon.

;.- The following findings have been made following the scrutiny of the company'srecords \'is-:'t-vis (he bank records,

fI, ! 1. CREATIVE INNOVATIONS LTD

:r We have discovered two undisclosed Bank accounts of Creative Innovations with

deposits totaling to Kshs. 262,105,659 within the period ] anuary 1999 to October2004.

).- Computed V AT evasions plus penalties for the period amount to Kshs.

202,491,498 for that period.

,. The corresponding VAT and Additional Tax liability [or the period May 2003 to

October 2004 is Kshs. 44,839,492.

2. \V E TILLEY (MUTHAIGA) LTD

Next COUI'SC of action

I'!

"\>- Compile a case file and recommend charges on the Directors of Creative

Innovations [or failure to pay VAT and Additional Tax in the tunc of Kshs.

44,839,492 to the Kenya Revenue Authority in the period from March 2003 to

October 2004

r The Kenya Revenue Authority to recover from Creative Innovations Ltd the

amounts owed in VAT and Additional Tax.

lI,

'r W E Tilley Muthaiga Ltd IS a fish processing and export company with sister

companies Tanzania.I (

II. r: The Kenyan company handles all the exports on behalf of the Tanzanian

companies and receives payments on their behalf.

r Total sales for the period May 2003 to October 200-1 amounted to Kshs.

5,230,206,791.25 while the total deposits into their official bank accounts amount

to Kshs, 5,030,611,476.00.

:,... Allowing for exchange rate gains (losses) it seems the deposits in their official

bank accounts compensate for the sales proceeds of the three sister companies.

3

~f~ _s,

f'[ .

;... But the company only declares the sales proceeds of the Kenyan operations to the

Kcnyan Tax Authority.

:r No evidence however IS seen of remittances to the Tanzanian companies to

account for their exports.

r There is evidence that the company trades heavily II1 foreign currency with a

number ofForex Bureaus.

Next course of action

'.r

...•~\r:

r' ".r:

,r:

Contact the Tanzanian Revenue Authority to find out whether thc Tanzanian

sister companies declare their export earnings in Tanzania .

If the amounts arc not brought to charge in Tanzania, then the relevant Kenyan

tax will be assessed on the balance not declared in Kenya.

Establish the implications of trading in foreign currency, assess the income

earned, determine the tax implications and recommend appropriate action.

Prepare a case file and recommend charges on the Directors for failing to declare

income and pay taxes to the Kenya Revenue Authority.

3. TUSKl~R MATTRESSES LTD

L(

[C. \ ..

r Going by banked sales and V AT declared account, we observe that the

supermarket has under declared their sales by Kshs. 9) 1,619,287 between J lily

1999 to June 2004 which would attract a VAT levy of approximately 160,998,230in principal amount alone.

,.. The corresponding figure [or period under review i.e. July 2003 to June 2004 we

find an under-declaration of Kshs. 59,397,968, which would attract a VAT levy of

approximately Kshs. 9,503,G74 in principal amount alone.

;,- Between July 2002 and June 2004, tile company also understated their purchases

by Kshs. 437,679,937, which would attract Kshs. 75,S08,414 in principal VATlev)'.

-f

'r The corresponding figure for July 2003 to June 2004 is Kshs. 148,698,662, which

would attract the VAT levy of Kshs. 23,791,785 in principal sum.

r: The above figurcs can only bc confirmed after:

o Crosschecking witl: the sales account in the computer.

o Cross check sales to other supermarkets in the chain

o Analyzing stock records

o Verifying the input tax

Next course of action

l.·~);- Acccss the computer data and verify the figures quoted above.

;Y Establish the final taxable amount and assess tax.

>-J •

I.)..-

\..

,r:

)..- Obtain Bank account records of the numerous fixed deposit, call deposits and

current account deposits of the company and the Directors held at Chartcrhousc

Bank and Bare lays Bank and investigate if any of the supermarket sales proceeds

are banked directly into those accounts

r Prepare a case fi Ie and recommend charges on the Directors of Tusker Mattresses

for failing to declare income and pay taxes due to the Kenya Revenue Authority.

Kenya Revenue Authority to commence recovery of the taxes due.

4. ~(ARIUKI l\lUIGUA & CO. (CLIENTS ACCOUNT)

Chartcrhousc Bank declined to provide any documents on this account citing a

high court order barring anybody from invcstigating it.

Later thc bank forwarded a copy of another high Caliri order baring the Kenya

Anti-Corruption Commission from invest.gating the account.

r: This later l Iigl: Court order has not been served on the Commission as at the timeof making this report.

)..- It is believed that the account is operated by big businesses in town that deposit

sales proceeds into the account and hope (0 hide them using the cloak of client's

COil fidcn t i~l!ity under the ad vee ales ac t.

5

Next course of action

>- Await service of the order to determine the next course of action.

5. D SHAll ACCOUNT

>- Between 5th

May 2003 and yd November 2004, the account received a total of

Kshs. 601%8171.33 in deposits.

);.- Some of the deposits have been cstab lished as cash transfers from sundrycreditors.

;- The equivalent is then taken out as Idd issued by order of Mr. D Shah

f"

[

Next course of action

).- Trace the fdds and try to establish the beneficiaries of the transfers.

/'" Establish the real source of funds and detenninc whether it is a parallel account to

hide sales proceeds for companies.

r Assess the information and recommend appropriate action.

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G. SAILESII PRAJAPATTI ACCOUT

No account opening documents availed. They were allegedly burnt in a gocdownfi reo

KsllS. 555,618,102.25 deposited between 2nd May 2003 and 2nd August 2004

Most deposits from Nakurnatt holdings and transfers from sundry creditors.

In one instance an equivalent of the amount transferred from Sundry Creditors is

taken out through Idil's by order ofvarious persons

6

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Next course of action

r Trace the Idds to establish their beneficiaries

r Trace the source of funds and establish whether is a scheme to hide sales proceeds

to evade tax.

f

IIL·'r'

r Determine the extent of liability and recommend appropriate action.

7. PAOLO SATTANII\O ACCOUl\TS

a) CA 01-60006 Approx Kshs. 52 Million in deposits.

b) CA 01 - 800145 Approx 40,808,298 in deposits.

c) CA 01-700154 Approx 712,200 in deposits.

r No account opening documents.

,. Accounts held in foreign currency.

;,.. Withdrawals mostly by Telegraphic transfers.

(

Next course of action

" .

r Establish the purpose of the funds transferred into his accounts

;,. Establish the tax implications on the activities of these accounts.

/" Assess appropriate tax

;;- Charge those responsible [or tax evasion with the offence of committing an

eCOnOl1lIC crime

;,. Pursue the destination of tile funds transferred out of tile account by telegraph ar,

establish whether any laws have been contravened.

CONCLUSION

The -first phase of this exercise focused on the first three companies with the ann of

investigating allegations of VAT and Income T:-Ix evasions. The three are:

i) Creative Innovations

ji) \V E Tilley (J\luth:liga) Ltd

iii) Tusker :-'lattresscs

'7I

-v

The second phJSC of thc investigations will focus on the remaining four entities with thc

aim of unraveling thc network of secret bank accounts with the attendant tax evasions,

illegal money transfers and violation of banking rules by big businesses. This second

phase should start as soon as the first phase is considerably concluded.

Prepared by: IIE:\RY;\Il\l\YITIIIA30TII NOVEI\IBER 200-t

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I'OTII ER ENTITIES

Bank account details were sought for the following entities and below are the

observations from the information obtained from Chartcrhousc Bank

KARIUKI MUIGUA & CO. (CLIE~TS ACCOU~TS)

Charterhouse ;\lanaging Director declined to dindgc any information or documents with

regard to this account citing a High Court order, which he claimed, barred him fron:

disclosing any information with regard to the above named accounts, I-Ie could only

produce a court order barring certain respondents from accessing the information with

regard to that bank account of which the Kenya Anti-Corruption Commission or its agcntwas not among them

f.. Howcver, according to documents availed from other sources within the task force, one

of the accounts, CA 01 - 000563 received deposits amounting to Kshs. 380,548,898

starting from 8ih

March 2004 to lSI September 2004. Information from the same source

also -indicated that the bank acts on unsigned instructions supposedly from Kariuki

f\luigua, raising the possibility that the instructions arc prepared within the bank. It is also

believed that the account is actually operated by some of the big businesses in town butshielded by the cloak of clients' confidentiality.

Latest developments

r: The bank forwarded a copy of another high court order baring the Kenya Anti-

Corruption Commission from invcstigating the account.

> This later High Court order has not been served on the Commission as at the timcofJ1laking this report.

r It is believed that the account is operated by big businesses in town that deposit

sales proceeds into the account and hope to hide them using the cloak of client'sconfidentiality under the advocates act.

Next course of action

r Awai: service of the order to determine thc ncx: course ofactioll.

8

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Offence likely to he disclosed

Failure to pay taxes by the companies using this account as parallel accounts contrary to

section 45 (1) (d) of the Anti-Corruption and Economics Act of2003

D SIL\H ACCOCNT

I, .

L'~

This <lCCOUl1thas received a total of Kshs. GOl,%8,171.33 in deposits for the period

starting fr01115lh May 2003 to 3rJ November 2004 mostly in huge cash deposits. It is also

reilcets huge cash withdrawals. It is believed that the related companies use this account

as a secret parallel account through which to hide sales proceeds. The account openingdocumcnts could not reveal the owner.

Additional findings

r Some of the deposits have been established as cash transfers from sundrycreditors.

r: The equivalent is then taken out as fdd issued by order of 1\'1r. D Shah

Next course of action

I ..("

';- Collect debit and credit vouchers effecting entries into this account and establishthe source of the funds

'r Interview Charterhouse bank officials and try to trace the owner of the account

;. If a case is established of VAT and Income Tax evasion, then charge the

companies their directors with committing an economic crime

,. Trace the fdJ's and try to establish the beneficiaries of the transfers.

r Establish the real source of funds and determine whether it is a parallel account to

hide sales proceeds for companies.

»: Assess the information and recommend appropriate action.

9

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[Offences likely to be disclosed

Tax evasion contrary to section 45 (I) (d) of the Anti-Corruption and Economics CrimesAct 0[2003

I

SAILESII I'RAJAPATI ACCOUNT CA 01 - 000148

The bank claimed that account-opening documents in respect to this account were burntdown in a fire,

However, between 2"d

1\'1:1y2003 and 2nJ August 2004 the account received Kshs.

551,518,102.25 in the form of huge cash deposits, and cheques from Nakummatt

Holdings. The account also reflects cash withdrawals in an usually huge amounts. It is

believed that this is account is also used by big business in town like to hide salesproceeds.

IeI

Additional findings

r. Most deposits from Nakumatt holdings and transfers from sundry creditors.

:r. 111one instance an equivalent of the amount transferrcd from Sundry Creditors is

taken out through fJJ's by order of various personsNext course of action

r Collect debit and credit vouchers effecting cntries into this account and establishthe source of the funds

;;. Trace the Idcl's to establish their beneficiaries

r Interview Charlcrhouse bank officials and try to trace the OW11erof the account

r If a case is established of VAT and Income Tax evasion, then charge the

companies their directors with committing an economic crime.

PAOLO SATL\NINO ACCOUNTS

Iv! 1'. Paolo Satlanino operates three foreign accounts with Chartcrhousc Bank.

Howe\'c\'cr, the bank opening dOcllIllents contains the name of Capricorn SRL The bank

officials claimed that those are the documents for the account. The bank opening

docllIllents arc al1 account opening J{J!1l1and two letters signed by Paolo Sattunino one as

10

11

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hirnscl f and the other as the Managing Director of Capricorn SRL. The letters authorize

the bank to act on 12 - Mail instructions from the writer.

The three accounts arc: -

1. ACCOU~T 1'(0. CA 01 - 60006 A US DOLLAR ACCOU~T

[iI.

A scrutiny of the bank statement revealed that the above account received USD

657,651.2 (the equivalent of Kshs, 52 million) between 151 April 2004 and 3rJ November

2004 by w~y of transfer mostly fr0111 Creative Innovations and Kingsway. Telegraphic

transfer of foreign exchange takes out an equivalent amount to recipients like several

recipients like Tradcx.

Steps to he undertaken

? Establ ish the purpose of the funds transferred into his account

'r Establish the tax implications on the activities of this account.

r l\SSCSS appropriate lax

).... Charge those responsible [or tax evasion \Vit11 the offence of C0I11111ilting an

ccononuc cnrnc

r: Pursue the destination of the funds transferred out of the account by telegraph and

establish whether any laws have been contravened.

2. ACCOUNT NO. C1\ 01 - 800145 EURO ACCOUNT

(

This account received a total ofEuros 392,387.49 (the equivalent of Kshs, 40,808,298) in

the short period between 1st April 2004 and 22nJ October 2004. Similarly, the deposits

were by way of transfers from Creative Innovations and D Shah accounts, Debits in the

account a by way of telegraphic transfers to foreign destinations.

Steps to he undertaken

r Establish the purpose of the funds transferred into his account

»: Establish the tax implications on the activities of this account.

r: l\ssess appropriate tax

r Charge those responsible for tax evasion with the offence of committing an

I1.

economic crrmc

~_ .., ----.:....--_-----------

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Offcn cos likely to be disclosed

Tax evasion contrary to section 45 (1) (d) of the Anti-Corruption and Economics CrimesAct of 2003

1

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SAILESII PRAJAPATI ACCOUNT CA 01 - 000148

The bank claimed that account-opening documents in respect to this account were burntdown in a fire.

However, between 2/ld

1\1:11' 2003 and 2nd August 2004 the accoun: received Kshs.

551,518,102.25 in the form of huge cash deposits, and cheques from Nakummau

Holdings. The account also reflects cash withdrawals in an usually huge amounts. It is

believed that this is account is also used by big business in town like to hide salesproceeds.

Additional findings

r Most deposits Irorn Nakumau holdings and transfers from sundry creditors.

:,:.. 111 one instance an equivalent of the amount transferred from Sundry Creditors is

taken out through fJd's by order of various personsNext cour-se of action

> Collect debit and credit vouchers effecting entries into this account and establishthe source of the funds

:r Trace the fdds to establish their beneficiaries

r Interview Chartcrhous., bank officials and try to trace the oWl~er of the account

r If a case is established of VAT and Income Tax evasion, then charge the

companies their directors with committing an economic crime.

PAOLO SAT'L\NINO ACCOUNTS

Mr. Paolo Sattanino operates three foreign accounts with Ch~lrterhousc Bank.

Howcvcvc- the bank opening documents contains the name of Capricorn SRL The bank

officials claimed that those arc the documents for the account. The hank opening

documents JI'C <Inaccount opening form and two letters signed by Paolo Sattunino, one as

10

'r Pursue the destination of the funds transferrcd out of the account by telegraph and

cstahlish whether any laws have been contravened

Offence likely to be disclosed

1. Failure to pJ.y taxes contrary to section 45 (1 ) (d) of the Anti-Corruption andEconomics Act of 2003.

2. funds transfer to secret destination.

Prepared by: HENRY 1\1l\1\VITHIA12111 NOVEMBER 200-t

f"

I

/ ..f

CI· r

II

12

D:\ j\' I"':IKlJU Y:\KENYA

CENTHALDANK OFKENYA

Dccemcc. :2:2. 2(/J4j l:uie -'i'·;:"si..: Avenue

1'.0. Box 6!;<XD N:lirobi KenyaTelepbone 22(;-n j Tciex 22124

The Dircc:orl\enya f\n(:·Ccrr~ption CommissionL1tcS,-i\ Ce:-.:;·cr)O.Go:-:6:~3) C0200I'iAmOj"~I

Dellr Sir

l\£: J[\VESTIGATION OF ECONOMIC CRIMES BY CHARTERHOUSE BANKLTD AND RELATED COMPANIES

'Ne i1Ch~o','..ICC::?C receipt of your letter dated December 15, 2004 and note with concern thehurdles you (:HC being in accessing information from Chalierhouse bank.

Although- we believe thut the various options referred to in your Jetter may "be fraught withcie!c\ys and counter court actions" we nonetheless are of the view that it would bel1p:Jroj)riC1lc for you to seek the opinion of the Attorney Genera! in respect of the hurdles youarc encour;:c:'ing in the course of your investigation especially having regard to the powersbestowed upon you by the statutes.

c--

Needless to say, the Central Bank will endeilvour to follow' up with the bank the muttersri'.l!scd in your letter in so far as they relate to compliance with the Central Bank of KenyaACl, Bllr:kinS Act and the Regulations issued thereunder as well as the Prudential Regulationsissued by tj'~c Central Bank. To facilitute this, we would appreciate yow' availinq to us any;xklitioi1i:d i"fcl'~1illiion of fClilure/rcfusal to provide data by the Chalierhouse bank that youwould w.sh to draw to our attention so as to enable us demand the same from the institution.

You ,~:,,/' '.'..si: » i;(;18, however, that the info:'mation gathered by the Central Bonk can onlybe i.scd k.:· ".ir regulatory function under the Banking Act arid cannot be availed to you 'inviev, of ~:~(;C()iIStri:liiits imposed on the Bank under the Act with reqard to disclosure ofi:,:I):'iL'i:i()i~ l)i,'l(i:ncd in the course of inspectio'IS.

c2,=-':'-.c::.::._ ...~,.~ _<---~_ ..~._-

;;!....\.•• 0, ••• ,

6;::l0\.

...:.~.'<~-'#. -,

INTH:I~:::~~;;:::=~::;~~~:;":'~;'~;~~\'\CIVIL SUIT NO. 329 OF 2006

...~.•..;.;,"f)CE:':T:::::'.:":::,,,3A~K OF KE~YA FIRST 'DEFENDANT:\,:I::\J:Sr;:::j::::' ?OR FI::-IA~CE SECOND DEFENDANTROS:::: ':>::':'::-.:0 THIRD DEFENDANT

VERSUS

':; REPLYING AFFIDAVIT

I, GER.:'-+D ARITA NYAOMA of Cerit. al Bank Building and of Post Office,Box N1.:..mber60000 Nairobi in the Republic of Kenya do hereby make

o2<h 3,:::;('. state as follows:-

1. 7HAT, I am the first Deferic.an t's Director, Banking Supervision

::>::p2.rtmcnt arid I run du.y authorised by it to swear this

;·,.~-fid2lviton its berralf and confirm t.hat, I am fully conversant.

·.<~hthe facts deponed to in this affidavit and can positively

~\...car thereto from 'my personal knowledge.

TtIAT, I have read and understood the contents of the Chamber

Surnrnon s dated the 23rd day of June, 2006 and the affidavit in

support thereof sworn by one Sanjay Shah on the same dated

.ind state that I make this affidavit in response thereto,

THAT, the first Defendant is a statutory body established under

:-,'::p rcvi sior;s c: Section 3 of the Central Bank of Kenya Act,

:.:-,<~:c,~~0::'of tr.e Laws of Kenya and one of its principal

,',:J.:c;C':S is tc :-cg-ulate the oper a tion s of all commercial banks in

",

-~---'----' ------ .•....=--~'.",,--•.•' -.."-=-...;...------=-----------------------

/ debts.

/

>:":~\'es trie regular inspectio-; of the operations and affairs of

.--:.. :::c:· ...~:.cJ ban.cs L:C en sure :hat the bariks comply with the

=;:":'::s~o:-,s of 2J~~11e~2.-,Vsapplicable to their operations together

'.--::~-:.ccc;::1i:1ist.ra:ive guidelines issued by the Central Bank, as

.......

:J. ]:~;:':.?,"l', during t~1e cour se of a regular inspection of the Plaintiff

,·.:.....ertaken by the first Dc:endant's Banking Supervision

:=:C::2.rtment in August, 2004 pursuant to the first Defendant's

s .a; i tory mandate under Section 32( 1) of the Banking Act, a

:~i.::T.ber of violations of the Bar.kirig Act were cstablish-r! viz :_ .

(a) Lending to both Nakumatt Holdings Limited and

Triton Petroleum Limited in excess of the single

borrower limit of 25% of its core capital.

(c) L:volvement in insider leridrng withou t adequate

security and above the prescribed limit of 20%

of its Core capital.

(c) Inadequate provisions for bad and doubtful

(d) Failure by the Plaintiffs management to submit

accurate returns to the first Defendant.

(a) r\ number of custome- accounts lacked account

c,;;cr::.::--.gdocur:--.::ntation as per the know your

Customer procedures.

~" Iji/...T, roilowing these findings, the management of the Plaintiff

-,:>-~~::(;:,tr,e viorat.ons whereupon the first Defendant imposed

and the Plain tiffs Managing

action would be underta.ken

::, :,~iT.edythe violat.or,s.

(

,?;;::: •.:~T, trie firs: deferidarit undertook a follow-up inspection In

:>:·~:".:2~~,2005 ".:0 establish t.ie status of compliance and the

;: .. z: .: ..• -:::i:m c stabii sned that remedial action had been taken on

IT:;)S: 0:- the violations with the exception of those relating to the

";~.:"lj;.!)your customer procedures'.

8. T3AT, as a result of the remedial action taken by the Plaintiff,

c:-.(~ first Deferida.nt recommended and received the second

Dcferidarrt's approval to renew the Plaintiff's license for the year

.'

9, the first Defendant u ncertook another inspection of the

.•:'>,:;~j:'[in October, 2005 wh.ch revealed i sornc weaknesses

Y.i::::::-:.. the operations of the Plaintiff including non-compliance

(<;

", ::.,'~:~eregulation en classification of loans and the 'Know

!.J'j,'.U· customerprocedures'; The inspection report was availed

tc ·c;--.c Plaintiff who accepted its findings and undertook to

rc.i.cc.y the violations.

10, T~bJ::, i:::C first Defendant ur.dcrtook another inspection in

'.['"1./::-::, 2006 which revealed the fcllowing:-

~ ••.••.•J";,_' •__ •

."."..- ---- ------~._ .•.--_ ..•.•..

-_._- - _ .._--_._ ..__ .--..-..-.

t. . T •

(0) ACCO'-.'"J." oper..ng forms of 45 customer accounts

were not availed.

1i

(c) Tile engclger:.lcnt in offshore money transfers

involving spLting of transactions was found.

(ci) Ci-:c:;,ues drawn on a customer's account were

cleared throu gh a lawyer's client account.

(c) The same 12,',vyer's client account was being

used as a trading account for some customers.

1 Co .:[IV.:.T, the draft inspection report was forwarded by the first

0c::':er"dant to the Plaintiff on 21st June, 2006 for comments by

t.....<;; n-:2,nagc:;:n,:nt. :.\,Ieanwhi1e·,adverse reports/ allcgntions on the

Piaintiff were tabled in parliament and in light of this and in

orde:: to protect: the interest of the Plaintiff's depositors and

c:'~ci;;:c:'s, the first DefendaJ~t sought and received the second

::-.J-'::"cnc:ant'sapproval to place the Plaintiff under statutory

::'~:-:.:""a.;e=:er:t 1:1 strict exercise of powers vested on it by the

( ., r.....L,

}:.~JiT, from the foregoing = verily believe that the Plaintiff's

;·::':j)~:c2,tion·dated the 23rd day of June, 2006 has no merit and

~o.: :::~:c: riot be s u st ain ed by tnis Honourable Court and confirm

.:::.?,;: wh at is deponed hereinabove is true to the best of my:.::....owledge.

SWOHH :.:;~.. ·~:-:.csaid GERALD )

)

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-- ..•-..••.•....•.. ""-~----_.

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i,

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3:S~C:X-~ :'rlE ::,,1\VA)JG I tHEG ~AD\lOCATE,

CO:\::'fISSIO~Z:~ ?Cl~ CWI' -sPO Bcx ,5907, OC2\j!) ~:~mc::1"

T"l' ~~S9Ilf:i ;

~Q::j::\=n~S2:0NER FOR OATHS

DRA.VTS & FILED BY:-

ox...s.:::'~~& CO~IPANYAIJVOCATES3R:) FI.OORAC:':( C".c.RDEN HOUSE::,:;'I:2.5'I' ::~GCHGAVENUE1:)0 DC;:;::51236NAlROBI

\

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c-,

is" December 2004

I.·• iNTEGRITY CENTR.E(VJlley Rd. /Milim; Ini Rd. Junction)P.O. Box 6113(j00200. NAIR013/; KenyJ

Tel.:

Fax:

Email:

254 (020)27173181310722

254 (020) 27197572 0 (ikacc@integrity.go.kU l ~

Cur Re;: i<ACC/INQ/6/2/2/(38)

T:"\8 GO";ernorCentral Bank of KenyaP.O. Box GQOOO-00200NAIROBI ~.REF: INTER AGENCY INVESTIGATION "ON ECONOMIC CRIMES BYCHARTERHOUSE BANK LTD AND RELATED COMPANIES

Reference is made to the interim report of the Task Force carrying out the above

referenced investigation.

I would like to bring to your attention the hurdles we are facing especially withrespect to obtaining records, information and explanations from the CharterhouseBank Ltd, which could delay the expeditious conclusion of our investigations andprobably affect tile eventual outcome.

The bank is central to our investigations as we try to establish commissions ofeconomic crimes by related companies in the first phase and illegal moneytransfers and violation of banking regulations in the second phase.

The foliO\,ying are some of the dmicullies we are experiencing with the bank.

1. The bank does not maintain sufficient bank opening documents and otherdocumentation for its client's account. For instance;

No bank opening documents and other records were madeavailable to us for the account of Sailesh Prajapati Account No.CA 01-00148 with over 2 billion worth of dealings. Theexplanation by the bank was that the documents were burnt in ago-down fire in industrial Area. However this explanation maynot be true since documents such as account openingdocuments are kept witr.in the bank for ease of reference

(:\';' No sufficient documentstion eg photographs of account holder,-: cepies of lO/Passport has been provided for the Account of D.

_...._., Shall No. CA 01-000374 such that it has become difficult totrace tile identity of the account holder. No documentation hasteen made available tc support over Kshs. 600 million worth ofTransfers from the acccunt.

(iii) One of their clients, Creative Innovations Ltd maintains fourcurrent accounts with the bank but has only one set of accountopening documents. The bank claims that the other three areoperated by the same set. Curiously, two of the bank accountsfor this client are not disclosed to the Kenya Revenue Authorityyet there is evidence that sales proceeds' are deposited intothese accounts. The accounts for this company were initiallyopened by the current Managing Director of the bank and thereis suspicion that thoL;gh he resigned as a director of thecompany, he still remains a signatory to the accounts.

Huge sums, converted into foreign currency in excess ofKshs.157 Million were transferred from one of the secretaccounts to unspecified foreign' destinations throughTelegraphic Foreign Exchange transfers between May 2003 toOctober 2004."

(iv) The bank gave us the account opening form of Capricon SRLfor the accounts of Paolo Sattanino. No other documents weremade available to us for all the three foreign currency accountsof Paolo Sattanino. Huge foreign exchange transfers to thetune of Ksh.89,000,000 were effected through these accounts toforeign destinations between May 2003- October 2004.

2. We have evidence that the bank prepared a Bankers Cheque ofl<sh.879,000 and purported to have cleared it through Middle East Bank.Our investigations have established that Middle. East Bank never clearedthe Cheque but was instead stamped clewed with a fake Middle EastStamp within Charterhouse bank and the amount of the cheque withdrawnin cash to unknown destination. We suspect this type of forgery could begoing on a larger scale within Charterhouse Bank as a means of siphoningcash out of the Bank.

3. The bank has consistently resisted investigations into the accounts' of "f<:::r:uki Muigua (clients accounts) citing court orders barring any party from:::',:c'2ssing them. We however have evidence that the bank acts onunsigned instructions to operate the accounts of Kariuki Muigua. It issuspectod that these instructions are prepared within the bank and thatthe accounts are operated on behalf of big businesses as parallelaccounts for illegal purposes.

4. ~r1formation with the task force indicates that this bank mainly runsfict:tious accounts for some of the big businesses in town for purposes oftax evasion, siphoning of money out of the country into offshore accounts2::C probably money laundering. Some of the bank accounts mentioned;:1:")ovoare actually run by big business in assumed names, hence the lack(;; p roI)I! r dnr.1 irl1r:!1 [; I!inn

,-'.: :-;jSK Force ':8S considered various options, some of which would be,') ",-,,-10 court orciors, ~',nddo rnari 1 for morn documents or contest some of

2

~;-,e court orders their "clients" have obtained to bar any party fromil:\'cstigating their accounts. We 'Jbserved that either of the options would:-';e fraught with delays and counter court actions which would further;Gl,:Jedeour progress.

The team is also concerned that while the bank and its clients placehurdles on our way, they could in the meantime be destroying all trace ofevidence and even liquidating some of their assets and moving themoffshore thus rendering our efforts even more futile.

The Task Force feels that the bank, being at the centra of thisi'w8stigation is at the same time the biggest obstacle to the investigation.:~is for the above reasons that I a:n writing to you as the Regulator to seekyour intervention on this matter.

r7E ~ rJ~h'l"Y---~DR. J. P. MUTONYI, MBSFOR: DIRECTOR/CHIEF EXECUTIVE

ce. DirectorKenya Anti Corruption Commission

JPM/ea

3

Kenya National Commission on Human Rightsl st Floor, CVS Plaza. Lenana Road, P.O. Box 74359 - O{l200~Nairobi - Kenya.

Tel: 254-20~27179()8/2717928!271725612712664, Fax: 254~20~2716160Email: haki qJknchr.ol'g

KNCHR/COF/47

iz" July 2006

Major General Hussein Ali, EBSCommissioner of the Kenya PoliceVigilance HouseHarambee AvenueNAIROBI

Dear Sir

RE: IN THE MATTER OF THE PERSONAL SECURITY OF PETERGEORGE ODHIAMBO AND TITUS MWIRIGI RELATING TO EVENTSSORROUNDING CHARTERHOUSE BANK.

The above named persons have been to our office citing fears for their personal safetyarising out of their role in matters relating to Charterhouse Bank. We are asking youroffice to provide both Mr. Odhiambo and Mr. Mwirigi with security to guarantee theirpersonal safety from harm

The events surrounding this issue are that in April 2004, when Mr. Odhiambo wasemployed as the Internal Auditor at Charterhouse Bank, he came across informationtouching on various economic crimes that included money -laundering, tax evasion,violation of the Banking Act and the Central Bank of Kenya Act, being perpetrated bythe owners and management of the bank.

He relayed this information to the Kenya Revenue Authority in the same month. InAugust 2004, this information was transmitted to then Minister for Finance Hon.David Mwiraria with a promise of strict confidentiality. Based on this information,Hon. Mwiraria through the Central Bank of Kenya constituted an Inter Agency TaskForce chaired by the Kenya Anti-Corruption Commission to carry out a detailedinvestigation into the violations cited in that report.

During the course of the investigations by the task force, Mr. Odhiambo assisted theTask Force with additional information including the forensic audit on CharterhouseBank. In August 2004 as the work of the task force was ongoing, Mr. Odhiambo wasadvised by his contacts within the Task Force to resign his job at Charterhouse Bankand in view of his cooperation, the Central Bank of Kenya offered him alternativeemployment in February 2005 in the Internal Audit Department

His role in assisting the Task Force was regrettably leaked to the owners and themanagement of Charterhouse Bank around November 2004 and as a result he startedreceiving anonymous and threatening phone calls through his mobile phone. He also

Since this incident, Mr. Odhiambo informs our office that he has received numeroustelephone calls warning him of dire consequences in view of the events that nowsurround the closure of Charter House Bank. He informs us that he has also received alot of calls from people who claim to know these people, warning him of theircapabilities to harm him. The callers have even told him to leave the country if he can.

noticed several suspicious persons inquiring about where he lived. Owing to theseinquiries, Mr. Odhiambo was forced to dispatch his family-his wife and two children-out of the country. Since then, he has been forced to move houses thrice.

On Friday ih of July 2006, Mr. Odhiambo reported to work and was called by hissupervisor Mrs. Laanoi where he was introduced to a visitor who wanted to speakwith him in private. The Central Bank head of security Mr. Sangoro who was present,suggested that the meeting take place in his office. Mr. Odhiambo informs us that hefound two other persons in Security Chief's office who he was introduced to as policeofficers from Central Police Station.

Mr. Odhiambo was shown a copy of the employment detail form he had completedupon joining Charterhouse Bank and told that the officers had instructions toaccompany him to his house to conduct a search. They also told him they wereinterested in Mr. Titus Mwirigi; a member of the Task Force inquiring into the affairsof Charterhouse Bank and also a referee to Mr. Odhiambo in the Charterhouse Bankemployment. Once Mr. Sangoro realized that the intended search involvedCharterhouse Bank, he decided to inform his superior-the Head of the Banking FraudIrlvestigation Department-upon which the Governor of the Central Bank Mrs. Jacinta.Mwatela intervened to stop Mr. Odhiambo's intended arrest.

Mrs. Mwatela after scrutinizing the documents presented by the police establishedthat they lacked any legal basis for his arrest and therefore asked the police to leave.The affidavit these police officers presented as a basis for Mr. Odhiambo's arrest wasfound by the Governor to be unenforceable, inauthentic and illegal because it was notsigned by the present Manager of Charterhouse Bank Ms. Rose Detho. We aretherefore asking your office to investigate the circumstances under which the policeallegedly based their actions and whether the attempt to arrest Mr. Odhiambo hadbeen authorized by any of your officers. We have reason to suspect that the purportedpolice actions could be dubious because the police have not returned to the Bank sincethen.

We are formally asking your office for a written guarantee on the personal safety andsecurity of Mr. Peter Odhiambo and Mr. Titus Mwirigi. Our basis for asking for Mr.Mwirigi's guarantee of safety is the fact that those threatening Mr. Odhiambo withphysical harm have also expressed interest in him.

Article 9 of the International Covenant on Civil and Political rights provides for theright of everyone to enjoy security of the person which right is also guaranteed bySection 70 of the Constitution of the Republic of Kenya. Every Kenyan is entitled tolife, liberty, security of the person and the protection of law. Now that MessrsOdhiambo's and Mwirigi's personal safety has become a matter of national concernon account of the events that surround Charterhouse bank, it is our sincere belief that

"Every person who, knowing that a person designs to commit or iscommitting a felony, fails to use all reasonable means to prevent thecommission or completion thereof is guilty of a misdemeanour"

the police have a duty to ensure that their right to security of their persons is notinfringed.

We further draw your attention to Section 392 of the Penal Code (Cap 63 Laws ofKenya) which imposes a duty on citizens to prevent commission of crimes by makingit an offence to neglect to prevent a felony. It reads:

May we also add that should anything untoward compromise the safety and securityof Mr. Odhiambo or Mr. Mwirigi, then suspicion will remain that those responsibleare the owners of Charterhouse Bank, their agents and / or some elements within thepolice force.

We are looking forward to receiving your response on the above issues at the earliestpossible opportunity. In the meantime, we have taken the liberty of copying in theMinisters of Justice, Internal Security, and the honourable Attorney General invitingtheir intervention on these issues of immense public interest.

Sincerely

~~~

Maina KiaiChairman

CC: Hon. Martha Karua, EGH, MPMinister for Justice & Constitutional Affairs

Hon. Amos Kimunya, EGH, MPMinister for Finance

Hon. John Michuki, EGH, MPMinister of State in the Office of the President

Hon. Amos. S. Wako, EGH, EBS, SC, MPAttorney General of the Republic of Kenya

Mrs Jacinta MwatelaGovernor of the Central Bank of Kenya

Justice Aaron RingeraDirector, Kenya Anti-Corruption Commission

Mr. Michael Waweru

Mr. Titus MwirigiConsultant

Commissioner General, Kenya Revenue Authority

Ms Rose DethoStatutory Manager, Charterhouse Bank

Mr. Peter George OdhiamboAuditor, Central Bank of Kenya

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MINISTERIAL STATEMENT ON THE INTER-AGENCY INVESTIGATIONS ON' . -

ECONOMIC CRIMES BY CHARTER HOUSE BANK LIMITED AND RELATEDCOfAPANiES, 27TH JUNE, 2006

Mr. Speaker Sir, I beg the indulgence of the house to clarify certain

matters related to Charterhouse Bank, as a result of documents tabled in

the house by a member, and subsequent allegations made.,

f

The media reports and the different statements that have been made on

the Charter house Bank, have created the impression that:-

(a) The charges facing the Governor of the Central Bank of Kenya,

Dr. Andrew Mullei, are as a result of his efforts to bring to a halt

tax evasion, money laundering and 'other related offences by

Charter HouseBank Ltd and related companies;~cording[y, I

wish to set the record straight on this very important nationalissue ~

(b) That the government has been reluctant to act on the findings ofthe investigation.

1. On 15" December, 2004, the inter-agency task force investigating-===-=-economic crimes by Charter House Sank Ltd wrote to the Governor and

informed him that the Charter House Bank was complidt in money

laundering, abetting tax evasion and breaches of rules and regulations. __

(b)The investigations, were concluded on 21st February, 2006 and file, .

forwarded to the Attorney-General with recommendation to

prosecute the Governor on four counts of abuse of office.

2, The Governor responded on 22nd December, 2004, advising KACCto seek

the Attorney-General's opinion with respect to its powers to deal with

such problems. He, however, said he would take up KACC's comments

on matters relating to Charter House Bank's compliance with the

relevant provisions.

3. KACCand KRA continued with investigations into the matter against the

mentioned firms that had accounts at Charter House Bank. The

(~ investigations are at different stages of completion and appropriate

actions will be taken. I wish to request the house to respect the

confidentiality of the investigations in order to protect the outcomes

from unnecessary interference.

Mr. Speaker, as regards the investigation and prosecution of the Governor,

the facts are:-

(a) Investigations were commenced in June, 2005 at the sole initiative of

C KACCbased on information received.

(c)The Attorney-General approved the charging of the Governor on 22nd

March, 2006.

(d)The letter from the Governor to the Minister for Finance on the

status of Charter House Bank investigations in which he requeste.d

withdrawal of the license was done on zo" March; 2006, exactly one

month after KACCinvestigation file was sent to the Attorney-General

and just two days before the Attorney General approved ourrecommendations to charge the Governor.

Mr. Speaker, Han. Members may wish to note that in April and July 2005,

the Governor made recommendations for renewal of the Bank's license and

opening of a new branch at Nakumatt Supermarket in Nairobi on,grounds.that the overall financial conditions of the bank was satisfactory and

that the bank was fully compliant with the requirements of the BankingAct and th.e Central Bank Prudential ~egu(ations.,

Basedon the chronology of events, it is clear that:

(i) The charging of Dr. MuUei in court and his subsequent suspension.is based on specific charges, and had absolutely nothing to do withI"~ ,

his stand on the Charter Housebank;

(ii) Dr. JAullei did not act on the recommendations of the inter-agency

task force to take action against Charter House Bank for one yearand three months;

(iii) As tate as 16th January, 2006, the Governor recommended therenewal of the Bank's license on the basis that the institution has

maintained a sound financial condition over the years and is in

compliance with the Banking Act and Central Bank PrudentialRegu Iati ons"

___ ~'_D I • --:-_~

(iv) Dr. MuUei wrote to the Minister for Finance on the eve of his

being charged in court.

(v) Follcwing receipt of the letter of March 20, 2006 I directed CBKto

send a team to Charter House Bank to update the status of the

2004 report as at end of March 2006. This report was completed

and given to the managers of the Charter House Bank on June 21st

for their comments in accordance with existing procedures.

While awaiting the response, which is expected next week, a

C leaked copy of the November 2004 report was tabled in

'Parliament. This caused unnecessary panic in the banking 'sector

and in order to protect the interest of. depositors and the bank, I

regrettably approved the appointment of a Statutory Manager for

Charter House Bank on June 22nd, 2006.

Mr. Speaker, I trust that members of this August House and the public at' ..

large are now better informed on the facts of this matter.

GovernorBANKI

KUU YAKENYA

Il:iilc Scla"ie AvenueP.O. Box 6OCOC Nairobi Kenya

Telephone 226.:J J Telex 22124

Han. r'\:;"l05 1\:;·:·L.:n::/uI EGH, MP1\1irlis:er fa:" ?::~J:-'\:cThe Treasury'Nairol»

~l-~~~

)STATUS OF CHARTERHOUSE BANK LIMITED INVESTIGATIONS

FUliher to my previous briefings to the Minister for Finance on September 23, 2004 andOctober 29, 2004, I would like to provide an update on the status of investigationsrelating to Ci~clrterhoLlse Bank activities.

As a backg~OLi~~dof these investigations, the Centra] Bank had set up a Due DiligenceTeam in 200.3 to examine more carefully than was generally done by Bank Supervision,the i)clil}i'ies of banks that apj)earcd to have some problems. On the basis ofinfor:11<:ltioi1r,::cei'v'cd from the Minister for Finance, the Due Diligence Team inspectedCharterhousc Gclnk activities. Charterhouse ostensibly looked satisfactory but detailed.examinilt:on {,)und thi'lt a number -of account holders actually had multiple bankaccounts ','ihid, is (J s:andard way of detecting potentia! tax evasion. The corporationsand individual; that were identified are shown ir: the Results section below.

Using the infnrmii:iOi1 received from the Minister for Finance, the Due Ditigence TeamCX<1111inedthese accounts f!1ore closely and it was found that almost all of them werelinked to NakliITlatt Holdings. The CBK through the Governor informed the Minister forFinance of the outcome of these investigations and got his approval to convoke ameeting with (;H~ Director, I\:enya Anti Corruption Authority (Justice A Rinqera), thePermanent Secretary, GO'Jernance and Ethics (,;ohn Githongo), and the Director, PublicProseci.ltic:ls "Phiii:J Murgor) to discuss the way forward.

As 2. cCI1seq'_:'~:~C8.<1Joint Action Team VJuS set up under the leadership of I<ACC. DrJohn ;Vkto::>:. '\SSiS:illit Director, [\ACC was Chairman, other Iv-\CC members werel--!cn~; >';':/;:: :c. Ci,:c:m Lukai'a, Davis Farah, .\n:ony Kahiga and Vincent Kiptoon, all!\ACC i:-';es:i'jr.::c:·s r:~lci Ms Fatu.na Sichale, legal Officer, KACC. The Central Bank'N"" ,·cprcs(':-.:,,(, )\.J '::;e:-"lci ).·y.)or'~i:l, Director of Fin~lnci<ll Institutions Supelvision

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rc;yc:;cn:cc! 1_);; \lr \1el Smith, Forensic Auditor and KRA by Mr J G Nduati, SeniorDeputy Co.r.rnissioncr (Investigations). The ?ublic Prosecutor's office was invited toattend but \.,:s r.ot ~'egular in attendance.

This /vction Tcarn, in view of its membership, was able to do more detailed investigationsince informarion from alternative sources was made available which would not havebeen possible under the Banking Act. This investigation fully endorsed the suspicionthat there was significant tax evasion. Up to the 30th November 2004 there were twointerim reports prepared. Thereafter the CBl< was not informed nor was it requested toprovide further support. The second interim report of the Joint Action Team, dated 30th

November 2004, is the basis of the data presented in this letter.

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Since l<RA has the capacity to work on retroactive information, it was to pursue taxeswhile 10\CC would pursue economic crimes that were identified after 2nd May 2003, theeffective date of the Economic Crimes Act. More detailed work would undoubtedly haveyielded more siqnificant results.

Nevertheless, will: the information available in the second. interim report, one canconclude that these orqanizaiions (including Nakumatt) would appear to have evadedtux wilh the collusion of Charterhouse Bank to the extent of between Ksh.2 and 3 billionin any one year. lf penalties were levied on top of this it would be much more thantwice this amount. Furthermore, the partial accounts that have been examined onlycover one year and there is every reason to believe, in view of the fact that theseaccounts all had opening balances, that the operation has been continuous for 5 to 6years.

There is an extensive group of allied accounts that were identified but not fullyexamined. These arc mentioned generically here below. These undoubtedly involvedsignificant tax evasion if not other economic crimes.

Results from the Second Interim Joint Task Force Report MINISTER FOR I=INANCE

RECEIVED2 1 MAR 2006

1. Creeli',lc Innovations Ltd

Discovered VAT evasion of !<5h.247 mi.lion o n Rm jOOo 7NAIROBI

• :\0 account opening forms• ~\O records of account were available (it was claimed that these were

destroyed by fire)• :.::·:~o\·cr)-\5h.2.186 billion from Nakurnatt

:. ~.. .~.... ,. • ....:.! !.'.'r

:--~o:-.c:.:r<::1sfcrrcc! to Sundry' Creditors and from there transferred overseas.

1\ot aVclil,lble due to court order - but are as follows:Ksh. million

MINISTER FOR FINANCf.

RECEiVED2 1 MAR 2006A'c 1 - turnover

Alc 2 - turnoverP.,"c 2 - turnoverTotJI turnover

1,35526

328.tl_02J:iUltoQ

5. W [ T%~\;(MuthCligCl) Ltd

Suspected money laundering as• SCl!CS were Ksh. 1.35 billion; and

'. P.ccei;)ts were I-<Sh.5.89 billion

G. Paob Si1lti1nino

e 1\0 account opening forms

o Deposits to $ and Euro accounts (1.'4 - 3/11/04) in 7 months Ksh.52 millionand I\5h.40 million respectively.

7. Tusker Mi1ttresses Ltd

Discovered VAT evasion Ksh.270 million

The CBJ<'s Due Diligence personnel including Mr G Nyaoma, Director of FinancialInstitutions Supervision, and Mr M Smith, the Forensic Auditor, suggesfed that theinformation available to date from the Joint Task Force showed that client accounts inChClrterhouse Bank when linked with information from KRA would yield significantlymore tax but it would need more detailed analysis than was available. In paliicular,:'-;c:!.::LI1'C:ltt:-fci~;in~s and Kingsvv'()y Tyres accounts raised serious questions relating tocollusion with Cha:·terhouse Bank.

For ::·.StCl:1CC.i: should be noted that Nakuma:t has never shown a profit to dote, alwayslosses. lts \'X: jJCl'ylments are be[\l;een )\5h.33 and Ksh.85 million per annum. Uchumipays Ksh.500 to Ksh.600 million per annum. As Nakurnatt's turnover is much largerthan Uchu:»i, you would expect cOllJoration .ax and VAT to be in the range of Ksh.1.8to 1\5:,2.5 0::::cn per annum.

r·:' (' ~:'; ~'~,"r,", " .

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r<j:-igS·\l ..'(lY Tyrcs and its associate companies as well as the John Harun Group hadmultiple accounts whicl: arc linked to the Nakumatt network but were not fully

On the '0L:S:~ ')~ ;Lis information, it now seems appropriate that the Minister for Financeccul.i ;):"O'.:c)<~ ;<:~:\'.\Iiil; the des of the identified accounts. The Minister may also queryii.c i~'.CS: z;::c::,Z<CjL;S difference between Uchurr.is payment of VAT and Nakurnatt's.

I am concc-r.cd that the evidence of collusion between Charterhouse and its customers\..',,:1:CI: il.:r::;~_:es Know Your Customer reoulat.ons seems to have made Charterhouse

oJ ~

[3,111;, c::~;i.lb:::y \.0 the probity of the financial sector and I would recommend that youconsider witi;cL"'lwing its licence. Clearly any action should be taken in such a way that.nforrna.ion c;,:';'cnl\ stored in the bank cannot be destroyed.

I am sure that you ore fully aware that this letter should only go to the authorities whomyou may direct to take. action.

.. ,.. _- •.......-

! ivi/N/STER ~OR FINANCE

/rtROEIVED2 1 MAR 2006

I I !:Sox J0007NAIROBI

I\LLachmcnL~ (copies oj 2 preuiou~ briejs jor information)

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