Uganda arrests former Equity Bank boss connected to $16m fraud

Police arrest Equity Bank Uganda's former Executive Director for Commercial Banking, Kenneth Onyango over fraud.

Kampala, Uganda | By Michael Wandati | Ugandan authorities have arrested Kenneth Onyango, the former Executive Director for Commercial Banking at Equity Bank Uganda.

This arrest is related to the ongoing investigations into suspected fraud involving stock loans and agent float financing. Mr. Onyango was reportedly taken into custody on orders from the Directorate of Public Prosecutions (DPP).

“He is being investigated in line with that case [fraud]. It’s true he is in police custody. DPP will guide on the next course of action,” a source told this publication.

Photographs of a handcuffed Onyango circulated across various social media platforms on Thursday evening. According to reports, Onyango purportedly resigned from the bank the previous month.

Former Equity Bank Uganda Executive Director Kenneth Onyango arrested.

Equity is reported to have accepted his resignation with “immediate effect”, subject to the outcomes of investigations, which by then were underway.

The Kampala Dispatch understands that he was arrested by Kampala Metropolitan Police, whose spokesperson, Patrick Onyango, declined to comment on the matter.

Police are expected to issue a formal statement on the arrest on Friday.

Equity Bank Uganda stated on Thursday that it would refrain from commenting on the arrest as investigations were being conducted by state law enforcement, and any disclosures could jeopardize the inquiries.

However, the bank referred the this publication to its March 7, 2024, statement regarding “possible fraud on our stock loan and agent financing products” when news of the scandal first surfaced.

“People of interest, including a few of our staff and customers, are currently assisting with investigations by the relevant law enforcement authorities,” the unsigned statement reads.

“We hold ourselves to the highest standards of accountability and transparency, and a person found to be responsible, whether through fraud or errors of commission or omission, will be fully addressed in accordance with the policies, procedures and ethical values of the organisation and, where appropriate, the laws of the country,” the statement added.

A fortnight after the bank’s statement, five former Equity Bank employees were on March 20 charged at the Anti-Corruption Magistrate’s Court with obtaining credit by false pretence, money laundering, and conspiracy to defraud. 

The individuals involved in the case are Julius Musiimenta, the head of agency banking; Erina Nabisubi, the relationship manager for telecoms; Fred Semwogerere, a banker; Crescent Tumuhimbise, a relationship officer; and Wyclif Asiimwe, a distribution and marketing consultant.

Five Equity Bank staff remanded over alleged $16m loans fraud
Equity Bank staff in the dock.

They did not enter a plea and were remanded to prison after the presiding magistrate stated that the allegations included capital offenses triable by the High Court.

Also Read: Five Equity Bank staff remanded over alleged $16m loans fraud

Last week, police disclosed that two additional suspects had been taken into custody in connection with the case. A source familiar with the investigations revealed on Thursday night that Mr. Onyango was arrested alongside three agent banking operators.

Investigators found that the fraud primarily occurred through alleged collusion between certain Equity Bank staff and specific operators of agent banking classified as “super agents” due to their high net business value.

In response to the disclosures, the Kampala Dispatch has learned that the Bank of Uganda has initiated a forensic audit into the bank. Authorities have provided assurances that depositors’ funds are secure and there is no cause for alarm.

The reported amount lost due to the purported money laundering and fraud scheme is $16 million (USh 62 billion), with a significant portion disbursed as unsecured loans to unqualified individuals.

Mr. Onyango held various positions within the bank, including roles in risk management, operations, and business portfolios, before being promoted to oversee commercial banking operations.