Victoria Commercial Bank CEO Yogesh Pattni has allegedly been arrested.
Reports indicate that Pattni was allegedly taken by Directorate of Criminal Investigations (DCI) detectives from the banking fraud unit.
As reported by this writer in April 2022, Victoria Commercial Bank was alleged to have been involved in money laundering in the Mumias Sugar saga.
Mumias was placed under receivership by the Kenya Commercial Bank (KCB) in 2019 to protect its assets and maintain operations.
The miller owed KCB and several other creditors over Ksh29 billion.
KCB placed the miller under the hands of Ponangipalli Ramana Rao in a resuscitation plan.
Read: How Victoria Commercial Bank Aided Money Laundering, Tax Evasion in Mumias Sugar Saga
Documents seen by this writer showed how some of the Mumias assets that had secured loans from Eco Bank and French Development Agency Proparco moved between the two banks to Victoria Commercial Bank in a suspicious transaction.
The two assets, co-generation plant and Ethanol valued at Ksh1.9 billion and Ksh4 billion respectively, later ended up with Dubai-based firm Vartox Resources Inc.
In transferring the assets, the parties ignored an inter-lenders agreement signed on September 27, 2010.
The deal detailed exclusion of the two syndicated assets from the existing lender security.
The agreement required each lender to notify other parties of ‘any modification, termination, amendment and transfer of any security.’
Other lenders in the deal included Barclays Bank and Stanbic Bank.
“If any lender wished to discharge its security it will notify the other lenders prior to affecting the discharge…Consultation notice to be issued to all lenders for a period of 10 working days,” the agreement read.
Read Also: Police Seek More Information From Released Billionaire Jaswant Rai
Contrary to the agreement, however, Proparco and Ecobank went ahead to assign their right to Victoria Commercial Bank on October 4, 2021, without notice to KCB, Barclays Bank or Stanbic.
Interestingly, the transactions happened when the receiver-manager was engaged in the leasing process for the survival of the sugar firm.
Pattni’s alleged arrest comes days after Kabras Sugar owner Jaswant Rai was apparently taken hostage on Friday evening.
Rai was freed on Sunday by his alleged captors.
President William Ruto in an attack on the billionaire said his government was working towards reviving the sugar industry but its efforts were being thwarted by cartels.
“Do not be worried, I am alert to make sure everything will be okay. There is no one who will meddle. Do not be worried about someone coming to talk to us. Someone was telling me Rai. Who is Rai? No, that is not possible,” said the head of state.
Ruto wondered why privately owned sugar companies were generating more profit than their public competitors despite the government pumping a lot of money into the latter.
He said the government will deviate from solely running the public sugar mills in the region as the strategy had failed in the past.
Email your news TIPS to Editor@kahawatungu.com or WhatsApp +254707482874
