Equity Bank (Kenya), a subsidiary of Equity Group, has appointed Moses Okoth Nyabanda as acting managing director after the early retirement of Gerald Warui, the lender announced on Friday.
- •Warui’s exit is widely seen as the result of a modern-day insider heist that saw KShs. 1.5bn illegally transferred from a salaries’ account in 47 transactions in mid-July.
- •A manager, David Machiri Kimani, and his father, Machiri Kimani, have since been named as the main suspects, with conflicting reports of whether they’ve already been arrested after prosecutors applied for an arrest warrant days after the family shared CCTV of what appeared to be a raid and arrest of the latter.
- • Until his appointment, which is subject to regulatory approval, Nyabanda was the Group’s Chief Finance & Strategy Execution Officer.
“The Board wishes to thank Mr. Warui for his long and dedicated service to the Group which included heading operations, customer service, HR and finally, Equity Bank Kenya as Managing Director,” Equity Bank said in a statement, “Mr. Nyabanda has distinguished himself as a disciplined and thorough professional, demonstrating exceptional leadership in promoting robust control environments and productivity.”
What We Think
Equity Group, which posted a 12.5 percent growth in profit after tax in the first half of 2024, has had several incidences of stolen funds in its bank subsidiaries. In mid-April this year, hackers stole US$ 2 million from the bank in a debit card fraud. The DCI arrested 20 suspects in connection with the heist.
Around the same time, Ugandan police investigating a $16mn stock loans and agent float financing fraud in Equity Group’s subsidiary in the country arrested a former Equity Bank executive and three agency banking operators. The case had already seen at least four former employees charged in a Kampala court for money laundering, conspiracy to defraud, and obtaining credit by false pretence.
In 2021, a Kigali court sentenced eight Kenyans and a Ugandan to eight years imprisonment for hacking Equity Bank in 2019. The hacker group routinely used insiders and in-country account owners to penetrate the lender’s systems and move their loot.
While these and other cases have not outwardly worried investors, going by share price, or customers, going by the bank’s recent results, the recent case in the Kenyan subsidiary brought the problem full circle, back inside the lender’s own halls. The theft of employee salaries, even where the funds were insured and the bank’s financials are solid enough to take the hit, has likely changed the dynamics at Equity Centre, necessitating the exit of Warui as the bank reconfigures its internal control systems, both technological and human.
