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Documents filed in court have revealed that former chairman of Chase Bank Ltd, Zafrullah Khan, was paid a Sh1.052 billion bonus from funds raised through a corporate bond, four days after the lender raised Sh4.8 billion on June 10, 2015. This payment was in breach of regulatory agreements, which required the proceeds from the bond to be used to support the lender’s expansion plans and strengthen its capital base. The bonus payment was not disclosed to investors, exposing former directors of the bank to criminal prosecution. Chase Bank went into receivership in April 2016 and Mr Khan was later charged with conspiring to defraud depositors of Sh1.7 billion. Mauritius’s SBM Holdings agreed to buy some of the assets and liabilities of Chase Bank in 2018, a deal which resulted in bondholders losing the Sh4.8 billion they had invested. The Capital Markets Regulator says in a letter to the former Chase Bank directors that immediately after receipt of MTN (bond) money, a bonus of Sh1 billion was paid, but this ought to have been disclosed in the information memorandum and was paid contrary to Chase Bank board resolutions.