03.04.2024 Business & Finance

Beige-Bank trial: Witness tells court customers money were not siphoned

Beige-Bank trial: Witness tells court customers money were not siphoned
03.04.2024 LISTEN

Mr Dawda M. Hafisdeen, former Chief Financial Officer (CFO) of the defunct Beige Bank, has said that customers' money was not siphoned as alleged by prosecution.

He also disagreed with Mr Julius Ayivor, main prosecution’s witness and leader of the investigation team, that their accounts were debited without their consent.

Mr Hafisdeen in his evidence-in-chief insisted that if it was so, at least one of the over 10,000 affected customers would have lodged a complaint.

For him, Mr Ayivor confused fixed deposit account with current, explaining that fixed deposits were funds that had been borrowed by the bank from its customers or loans given by the bank’s customers.

These borrowings or loans come with terms and that stipulates how much interest would be paid by the bank to the customer, the tenure for the agreement, conditions for early payment and in some cases what action the bank would take upon maturity.

Mr Hafisdeen, the first witness of the defence counsel, said when a customer entered into a fixed deposit agreement with a bank, the funds were moved from the customer’s account and would not be available to them or would the funds even stand to their credit throughout the tenure of agreement.

“To suggest, therefore, that fixed deposits of customers had been moved in the first place, therefore, sounds fallacious because fixed deposits would not even be standing to the credit of the customer for there to be an opportunity to move them whether with or without the instruction of the customer,” he added.

Again, he said that in banking law and practice, no one, including the accused person, the Chief Executive Officer (CEO), could cause funds to be moved from anybody’s current account unless they were signatories to the account, adding that the bank only controlled the platform on which its customers did transactions.

He added that it did not also mean the bank could just go into the customer’s account, debit it and credit the funds to another customer’s account without their consent.

“That does not constitute normal banking practice.”

Mr Hafisdeen said: ” It is, therefore, not correct to say that the bank’s customers were not aware that their current accounts were debited by the bank and credited to BCAM.”

He debunked the assertion that the 10,000 plus customers received investment certificates with respect to funds moved from their accounts, stating that they would have also rejected the certificates if the said transfers were made without their consent.

Michael Nyinaku has been charged for theft and money laundering which he has denied.