Monday, July 24, 2017

#Uganda bank fraud is not yet over!

Available information indicates Orient Bank Limited customers lost close to a billion shillings thanks to internally generated fraud. Inside sources say, the scheme has reportedly been going on for the past two years. The unfortunate part is that the customers are yet to know or they will never get to know- welcome to Uganda’s banking sector.
A knowledgeable source at the Bank told Newz Post that management is praying hard that the more than 100 affected customers don’t get to know whilst the bank will have to repay all the monies lost- estimated to be close to a billion shilling. The bank has already paid millions of Shillings to the few customers who have presented evidence of unlawful transfer of money off their accounts.
The source told our reporter that the bad apples mainly targeted four types of accounts: dormant accounts, busy and fat business accounts, accounts with lots of activities especially using electronic Money transfers, and personal accounts with heavy usage.
‘‘The fraudsters must have taken time first to study all the bank’s accounts for some time, before zeroing on their targets.’’ another source at the bank observed.
She quoted one incident where the bad boys transferred ten million Uganda Shillings from the account of the embattled city tycoon. Several months later, the leading businessman is yet to know or he may never get to know he lost such amount to bank fraudsters- must be too busy to monitor and study his account and bank statement [s]. It is also possible that he has several fat bank accounts. Orient Bank boosts of 22 branches.
How the fraud was planned and executed 
From the bank’s headquarters at Orient Plaza, plot 6/6A Kampala Road, the bank’s staff working with sharp customers created several company accounts on which they would illegally transfer the money from customer accounts, before withdrawing it via- direct withdraw from the bank, via electronic transfers and also issuing cheques. They would also withdraw the money via ATM. A knowledgeable source at the bank told Newz Post.
Pressed hard the source explained that the fraudsters were indeed smart at their job.
‘‘From the customer accounts, they [ the fraudsters] would transfer anything [ from Ugx. 10,000 up to 30m] to their fake company accounts. For the dormant accounts, they would close it and transfer the money to their accounts’’ the source explained.
According to the source, the bad boys at the bank provided [the ‘‘customer’’ ] all the necessary bank documents required to open a company account and helped process the paperwork. They also helped to transfer the money from their targets to the fake company accounts. The role of ‘customers’ was to withdraw the money. This went on for more than two years.
In March 2015, Hemen Shah, Partner 8 Miles, one of the Major Shareholders in Orient Bank Limited told reporters that: We have to stabilise the institution and improve internal controls. We want disciplined growth and very careful in managing the risks and improvement of services. Two years later, the bank is yet to put up the controls.
Luck runs out 
The scheme, according to bank sources, has been going on for the last two years. However, the fraudster’s luck ran out recently when two customers logged in complaints.
The customers noted that in the last two months, they noticed an unauthorized transfer of money off their accounts. This prompted management to act. What they have discovered so far, has shocked them- close to a billion-customer money has been lost, with the aid of bank staff.
The bank has already refunded millions of shillings to the few customers who have presented evidence of unsanctioned transfer of their money off their accounts.
Asked to clarify amount the fraud, the bank’s public relations manager Obal Atubo, did not deny the fraud only said he could not comment about the matter. ‘‘We will update you at the right time’’ he said on the phone.
Asked whether they bank has refunded the customers who have lost the money or put in place internal controls to avoid the reoccurrence of same in future, he said, he could not comment about the matter.
About Orient Bank Limited
The bank was founded in 1993 by a group of businesspeople who were related by blood and marriage- Ketan Mojaria. In April 2009, Bank PHB Group, a Nigerian financial services group, acquired 80 percent shareholding in Orient Bank for a cash payment of US$63.2 million. In August 2011, the group was itself declared insolvent by the Central Bank of Nigeria.
In February 2015, 8 Miles LLP, a private equity firm, whose shareholders include celebrity entertainer and activist Bob Geldof, bought 42 percent shares in Orient Bank and the remaining 38 percent were sold to three individuals, namely Ketan Morjaria-one of the founders of the bank[ increasing his shares from 20 percent to 58 percent], Alemayehu Fisseha, and Zhong Shuang Quan.
8 Miles is also the majority shareholder in Biyinzika Poultry International
Speaking about the partnership with 8 Miles, Ketan Morjaria, the vice chairman and co-founder of Orient Bank Limited, said: “This strategic alliance with 8 Miles represents a new beginning for Orient and we look forward to working with their team in restoring the fortunes of the bank.”
Don’t miss PART II, including the more than 100 customers affected and how much they lost.
By Moses Kaketo, NEWZ.UG

Orient Bank Customers lose billions in internal fraud

By Moses Kaketo Available information indicates Orient Bank Limited customers lost close to a billion shillings thanks to internally generated fraud. Inside sources say, the scheme has reportedly been going on for the past two years. The unfortunate part is that the customers are yet to know or they will never get to know- welcome to Uganda's banking sector.

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