The country’s two major commercial banks, Standard Bank and National Bank are currently on the neck of the chief Cashgate suspect, Oswald Lutepo over a K1 billion loan he,together with his business colleague Elvis Nserebo obtained in 2012, we can reveal.
Business partners Nserebo and Lutepo, who are directors for Matindi Business Empire which owns Matindi academy, Matindi FM and Agri-Feeds Limited, owe Standard Bank and National Bank over K1.3 billion-including interest.
Lutepo is accused of siphoning over K1.6 billion from government coffers through ghost contracts in what is currently terms as Cashgate.
The two in 2012 separately applied for a K500 million loan from the two banks to purchase machinery for Agri-feeds Limited which is currently sailing through troubled waters. And in May the same year,Standard Bank approved the loan before National Bank also endorsing the loan application.
The loan has currently accumulated to K1.3 billion due to bank interests. It has established that Lutepo and Nserebo were given a one-year (interest free)- in which they were to purchase, install and commission the operation of the machinery- by the banks before they start repaying the loan with a K20 million interest per month.
However, the two banks are failing to recover the money as the property used as surety- Matindi Academy- value is less than the obtained loan as the two used the money for personal and other business purposes which include buying transmission equipment for Matindi FM, currently also sailing through financial difficulties.
Worse still the said machinery was not bought as Agri-feeds continue to operate on old equipment, forcing the animal feed producing company to scale down its operations. Some months ago the company was evacuated from Knight Frank’s B&C building in Ndirande for failing to pay rentals.
Standard Bank could not confirm or deny approving the loan to Lutepo. In an interview, Brian Mungomo junior said in an interview the bank was in no position to divulge its customer’s information.
“The bank is not obliged to divulge information pertaining to our customers unless subpoenaed by the court of law,” said Mungomo on behalf of the bank.
Lutepo could not be reached while his colleague Elvis Nserebo could not deny obtaining the loan but refused to comment on the issue when contacted.
Nserebo said: “I don’t have anything to comment on that matter.” Meanwhile, the two banks which were expected to start deducting the loan from the two’s bank accounts in September last year are on the hunt to seize property listed under the Lutepo and Nserebo’s names.
