Four NBS Bank plc senior managers have narrated how they believe two former bankers and a businessperson allegedly connived to defraud the listed bank in excess of K1 billion between 2013 and 2016.
Testifying before the High Court of Malawi sitting in Blantyre in the case against former NBS Bank employees Goodson Kapalamula (accounts officer) and Victor Banda (operations manager) alongside businessperson Dickson Kachingwe, NBS Bank head of risk Harold Phiri—who was the first State witness—told the court that Kachingwe acquired a same-day value facility fraudulently.
He said the facility allowed the businessperson to cash cheques from bank accounts he held with other commercial banks, but had no funds in the said accounts.
Phiri said the accounts were held in the names of Kachingwe’s businesses trading as Yankho Logistics, Yankho Wholesalers and Ulimi Produce.
The witness told the court that through the same-day facility, customers are allowed to cash cheques from other banks on the spot without waiting for the bank of the issuer to transfer and clear the funds first, a process that normally takes three working days.
Phiri said: “In this particular case regarding Mr. Kachingwe, the facility was accessed without approval and many cheques from the issuer’s [Kachingwe] bank accounts had no money.”
He told the court that on numerous occasions, the cheque numbers would be manipulated and that bankers Banda and Kapalamula would approve them allegedly despite being fully aware that fraud was being committed.
In her testimony, second State witness Faith Jere, who is NBS Bank operations manager based at Blantyre Branch, said the alleged fraudulent activities used to happen at the bank’s Limbe Branch where Kapalamula was the operations manager.
She further told the court that the fraud was uncovered after a reconciliation team from NBS Bank head office went to check after noticing the anomaly.
Jere said while many of Kachingwe’s cheques were referred back to the drawer for having insufficient funds, Kapalamula allegedly did not follow up with the businessperson as per his job description.
She also said that Kachingwe’s cheques were approved on various occasions by both Kapalamula and Banda who she alleged were part of the syndicate.
NBS Bank multi-skill consultant Jacqueline Chatangwa, testifying as third State witness, told the court that she would clear Kachingwe’s cheques as per her mandate; hence, would not question what was happening.
Fourth State witness Clara Munthali Phillips, who is NBS Bank team leader for sales based at Ginnery Corner in Blantyre, told the court that it was surprising that Kapalamula and Banda were helping Kachingwe with his transactions despite being in the back office.
The witness, who said she was an accounts executive at the time the alleged crime was being committed, said she was the person responsible for attending to Kachingwe, being a high network customer. She said her two former colleagues would, however, surpass her office.
The witnesses gave their testimonies during both cross-examination and examination-in-chief.
Director of Public Prosecutions Steve Kayuni and senior assistant chief State advocate Dzikondianthu Malunda are prosecuting the case on behalf of the State while the defence legal team comprises Christopher Masanje and Chancy Gondwe.
Presiding Judge Dorothy NyaKaunda Kamanga adjourned the case to October 18, subject to confirmation.
In an interview after the day-long hearing, Malunda said the State will parade two more witnesses before closing the prosecution case.
In a separate interview, Masanje said on their part as the defence they were happy that there is progress in the case.