Nazir Jinnah Challenges KCB Bank on Financial Irregularities Tied to EnglishPoint Marina

East Africa, Kenya Mar 12, 2025  – 

A significant financial scandal has emerged, implicating Kenya Commercial Bank (KCB) and KPMG East Africa, and sparking concerns about fraudulent financial reporting, unlawful receivership practices, and systemic shortcomings in financial oversight. Nazir Jinnah, Director of Pearl Beach Hotels Limited (PBHL), alleges that KCB Bank engaged in accounting fraud amounting to Ksh 69 billion during 2016 and 2017, with KPMG’s audits playing a role.

Jinnah has officially communicated with KPMG East Africa, seeking accountability for their alleged role in misleading stakeholders, regulators, and the public by omitting crucial financial details. Despite numerous requests for clarification and a forensic re-audit, KPMG has not provided a meaningful response, prompting Jinnah to escalate the matter to KPMG International Headquarters in the Netherlands, the Nairobi Securities Exchange (NSE), and Kenyan financial regulators.

Fraudulent Reporting and Financial Irregularities

According to a forensic audit commissioned by PBHL, KCB Bank handled transactions totaling Ksh 69 billion, originating from South Sudan and routed through international financial centers, including the United Kingdom, Canada, Ukraine, Russia, and Panama. These transactions, which should have triggered Anti-Money Laundering (AML) alerts, were not disclosed in KCB’s official financial statements or subjected to appropriate auditing procedures.

Jinnah claims that KCB misrepresented PBHL’s loan accounts, leading to an illegal and disputed receivership that has severely hampered business operations, impacting employees and stakeholders.

Regulatory Failures and KPMG’s Complicity

As KCB Bank’s official auditors during the relevant period, KPMG East Africa approved financial statements that omitted the Ksh 69 billion in transactions. Jinnah argues that KPMG’s failure to report or address these discrepancies constitutes significant negligence, aiding and abetting fraud, and breaching fiduciary duties.

“KPMG has not only failed to meet its obligations as an auditing firm but has also shown a clear disregard for financial integrity,” Jinnah stated. “Their lack of response to direct requests for a re-audit and accountability suggests their involvement in this financial wrongdoing.”

Comparison to International Banking Scandals

This situation echoes the recent TD Bank scandal in the United States, where the bank was fined $3 billion for failing to oversee illicit money laundering activities connected to drug cartels. TD Bank’s case involved systemic audit deficiencies, which the U.S. government characterized as “long-term, pervasive, and systemic.” KCB Bank and KPMG East Africa could face similarly severe consequences, with potential criminal and financial penalties if investigations substantiate the allegations.

Demands for Action

In his communication to KPMG and regulators, Jinnah has made the following demands:

• A complete re-audit of KCB Bank’s financial records for 2016-2017, overseen by KPMG International.

• Formal acknowledgment of the audit dispute by KPMG East Africa to the Nairobi Securities Exchange (NSE) and Kenya Revenue Authority (KRA).

• Regulatory intervention by the Directorate of Criminal Investigations (DCI) and Financial Reporting Centre (FRC) to investigate potential money laundering violations.

• Immediate suspension of KCB Bank’s trading on NSE pending an independent investigation.

The Risk to Kenya’s Financial Stability

With Kenya’s financial markets under scrutiny, the allegations against KCB Bank and KPMG East Africa could have serious repercussions for investor confidence and the trustworthiness of the country’s financial regulatory bodies. If unresolved, such systemic failures could discourage foreign investment and damage the banking sector’s image.

Despite repeated requests for comment, KPMG East Africa and KCB Bank have not provided any significant response. This silence further fuels suspicions about the extent of the alleged financial misconduct.

Escalation to International Authorities

Given KPMG’s lack of response, Jinnah has brought the matter to KPMG International Headquarters, seeking global oversight. If KPMG does not take action, the issue may be referred to the International Auditing and Assurance Standards Board (IAASB) and the Financial Action Task Force (FATF) for further examination.

“The public and investors deserve transparency,” Jinnah emphasized. “I will pursue every option, including legal action and international regulatory pressure, to ensure that financial institutions are held responsible for their actions.”

What’s Next?

The unfolding financial scandal raises broader questions about corporate governance and financial accountability in Africa’s banking industry. With investigations pending, the coming weeks will be crucial in determining the future of KCB Bank and KPMG East Africa and their reputation in the global financial community.