Contractor sues bank over 'fake account'

In Summary

• The company is seeking damages and a refund of the money as well as an apology for the alleged fraud.

• Subsequently, Kenya Revenue Authority sent the company demands for income taxes and VAT.

Consolidated bank.Photo file
Consolidated bank.Photo file

A contractor has sued Consolidated Bank for unlawfully opening an account in its name .

Sketchers Limited, a general contractor further accuses the bank of withdrawing Sh4.3 million deposited in the account from a contract payment.

The company is seeking damages and a refund of the money as well as an apology for the alleged fraud.

 

It alleges that the bank opened an account in its name in collusion with other persons and proceeds from a contract they were expecting from Kenya Rural Roads Authority (KeRRA) withdrawn without its knowledge.

Sketchers says that the proceeds from the contract were directed in the said account and one David Ndirangu, allegedly authorized the withdrawal of the entire Sh4,307,098.

Sketchers accuses the bank of failing to carry out due diligence before opening the account.

The company further says the bank failed to investigate if the documents used in the opening of the account were genuine neither did it confirm with KeRRA, whether the account was genuine.

The company says that it only came to know of the fraud after calling Kenya Rural Roads Authority over payment for work done only to be informed the amount had been credited to their account.

Subsequently, Kenya Revenue Authority sent the company demands for income taxes and VAT.

The firm was later blacklisted by KeRRA because of the alleged fraud.

 
 

The contractor said it has lost its reputation in government and various agencies where it gets tenders and the bank has ignored a demand letter for an apology.

It wants the bank compelled to pay the withdrawn amount, compensation for general and punitive damages and for the bank to issue an apology to KeRRA, stating that Sketchers limited was not involved in the fraud.

The case will be heard on September 10.