HomeBusiness DigestUS$500 000 Fraud Hits FBC Bank

Paper profits not an infallible guide

FBC Bank has been hit by a US$500 000 fraud but the bank remains sound, officials say.

The bank says four workers at its Mutare branch will soon appear in court facing fraud charges relating to the missing funds.

FBC Bank spokesperson Agrippa Mugwagwa announced in a statement that staff at the branch had colluded with other external customers to siphon funds out of the bank.

He said: “Four staff members at our FBC Bank Mutare Branch are under investigation following the unearthing of fraudulent transfers at the branch. Preliminary indications are that around $500 000 was fraudulently transferred by the four staff members in collusion internally and with some external parties.”
But the bank is confident it will recover the funds.

Mugwagwa added: “The bank has established where the funds were transferred and prospects of recovering the funds are high. The bank remains in a healthy financial position despite the fraud.”

Sources close to the developments told businessdigest that one of the suspects, Rodrick Chongo, is still at large. Chongo, who was a supervisor at the Mutare branch, is understood to have gone into hiding this week when police pounced on his colleagues. Sources said early this week, FBC Bank uncovered irregular transactions dating back to end of last year and instituted investigations.

The investigations exposed a hole in the banks books of US$500 000. A US$5 000 reward has been placed on Chongo.

An advert in the state-controlled daily, the Herald, shows that police might not have leads on his whereabouts and are hoping a call will come through the hotline.

Banks have suffered huge losses in the past year from armed robbers. Kingdom Bank and Barclays Bank lost thousands of dollars in robberies.

But the FBC fraud is the biggest loss suffered by banks owing to fraud or robbery so far.

In December 2004, CFX was rocked by a fraud that brought the bank to its knees and had to be recapitalised once again. Premier also suffered a fraud in 2007 which resulted in the resignation of former Premier Finance Group chief executive Exodus Makumbe and chief operating officer Cassius Gambinga.

Chris Muronzi

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