Details have emerged of how high-flying Equity Bank CEO and Chairman James Njuguna Mwangi duped thousands of his workers in a get-rich-quick pyramid scheme. It can be exclusively reported for the first time today.
In what would amount to the biggest corporate fraud in Kenya’s history, since 2005, hundreds of employees of Equity Bank (K) Ltd were misled into joining up what was established as an Employee Share Ownership Plan – ESOP; a process that entailed deducting hundreds of millions of shillings off the wages of bank employees ostensibly for purchase of shares.
Led by its billionaire CEO Mwangi, the bank registered what trusting employees were led to believe was a neutral and independent Trust Deed to manage and govern that ESOP on their behalf.
This Deed was issued to Equity staff who had purchased the shares of what was then the country’s fastest-growing bank.
Documents in our possession indicate that the crafty Dr. Mwangi, typical of a Ponzi scheme mastermind, illegally nominated himself and his cronies to the Trustee of the ESOP scheme – with clear intentions of controlling and gaining out of the exercise.
After imposing himself atop the ESOP scheme, Mwangi then deliberately conspired with the Trustees into fraudulently opening an escrow account in their books, where they are illegally holding those shares and all its dividends to date.
Without a care in the world, tycoon Mwangi and his wealthy co-conspirators, have for more than fifteen years now continued to earn dividends payable to those shares in total breach of their fiduciary duty, and to the detriment of their rightful owners who are the poor and lower cadre workers of Equity Group.
We independently established that the value of hijacked shares, plus cumulative dividends and accrued interest are estimated to top a staggering Sh5 billion shillings.
As the iron fisted Mwangi and his bank continue to fraudulently earn on the backs of poor employees and their dependents, there seem to be no respite to those duped by the all-powerful CEO.
To add insult to injury, stock market regulator Capital Markets Authority remains aloof to the matter and has refused to act on ruthless Mwangi who is rumored to be close friends with the Board members of CMA.
Mwangi’s influence transcends the Judiciary where, for instance, when a few employees filed civil cases in the Kenyan courts to seek justice, they are being frustrated by the same Trustees in collision with presiding judges. A case in point was of a case filed against Equity Bank in 2010 is yet to be heard and determined.
So dire is the situation that some employees have passed away and left a host of orphaned and widowed dependents, whose right as beneficiaries have been trampled upon by the cartel led by Mwangi.
Kenyan Report also understands that hundreds of employees exited the bank over the years and none of these have redeemed their shares from the bank because the unrepentant Mwangi continues to frustrate their efforts.
According to provisions of the Trust Deed, an employee who leaves the bank is deemed to have applied for the redemption of his/her units and the Trustees were to either, to sell the units at the prevailing price at the Nairobi Stock Exchange (NSE) or transfer the shares directly to the staff exiting the bank within 30 calendar days.
Kenyan Report was able to gain access to the full list of those employees that left between 2005- 2009, from an insider, who also left. We have information, even those who left between 2010 to date have not received their investment proceeds.
Despite petitioning relevant arms of the Government, like the DCI, DPP, EACC, the Central Bank of Kenya, etc. the frustrated Equity Bank employees have been left to fend for themselves against the corrupt corporate behemoth with state investigation agencies reluctant to intervene after having been greased by Mwangi.
Similarly, leading editors of the mainstream media houses have been pocketed by the cartel masquerading as ESOP Trustees and consequently suppressed any effort by their field reporters to file stories touching in the injustice Mwangi has meted out on Equity Bank employees.