Can FEP CEO Engineer a Kshs 5.4 Billion Scam on Diaspora in FEP via Credit Bank?
In furtherance to the previous article, The CEO of Credit Bank gave some pointers which I hereby answer.
Dear Diaspora in FEP Investor, At one point since you invested your hard earned cash in FEP; you have been frustrated and in agony. You like me have asked yourself: What happened to my money? You have read letters posted in Diaspora media outlets, by those in Diaspora instrumental in advancing FEP, begging FEP CEO to be accountable. As I closely studied the PPO offered to Diaspora in FEP, I found myself asking: Can the FEP CEO engineer a Kshs 5.4 billion scam on Diaspora via credit bank to make himself a billionaire? Remember his greatest goal is to become a “Billionaire.”
The key to success in any venture is: “accountability which is a two-way street.” The defense mounted when Diaspora in FEP asked for accountability of their investment is proof that the operation is like that of a fox begging Diaspora to be faithfully committing their hard earned dollars ($$$) while those guiding the money remain unaccountable.
If a person cons you once, they did so because you trusted them. If he does a second time he did so because you slept on your economic steering wheel. To open the discussion of the possibility of been scammed let us start by analyzing the statements given by Credit Bank CEO to explain the Kshs 281 million loses in the bank that I questioned and the Kshs 2 billion bank is sued. By the end of this I hope we will have been educated on how to avoid risk investments. I look forward to you also registering in the “Diaspora in FEP registry.”
Credit Bank CEO Statement: The bank has made some losses in 2014 and 2015. These are related to credit issues of some accounts that did not perform well. Please note that we made provisions and not a write off. As we make efforts to recover or sell the securities, these provisions will be written back as profits in future. If you analyze the 2015 performance, many banks have increased their provisions and this not unique to Credit Bank.
Dr. Kimethu to Diaspora in FEP: The bank CEO appears uncomfortable to directly state the bank made Kshs 91 million 2014 and Kshs 190 million 2015 a total of Kshs 281 million or about $3 million dollars. It is important those Diaspora in FEP like myself to understand the statement “provisions and not a write-off.” In early 2000’s when many got U.S loans and the prices of housing fell. Example an overpriced house of $250,000 whose price value fell to say $150,000 led to a bank holding an asset that had a loan of say $230,000 that declined in value. If you provide for a loss rather than write off one has to find someone to sell the bad asset.
Credit Bank CEO Statement: If you look at the information memorandum, the bank has doubled the branch next work in the last 5 years and also invested in a very good but expensive technology systems, namely T24. If you look at the best performing banks in Kenya more than 50% of them and over 2,000 banks around the world they use this technology. These are heavy investments that are necessary for growth. Any one setting bank must invest in these systems and this is the reason why start up banks take even 5 years before they break even.
Dr. Kimethu to Diaspora in FEP: I work in the technology field and have installed, maintained and supported ICT technology in the many large USA banks and understand the value of technology. Technology cost is not what is making this bank make loses. Credit Bank is a 30 Year bank in the making and loses are not occurring because of expansion or technology. To me this is the diversion for they are not ready to reveal the truth. This should let those bold in the pursuit of knowledge, never fear to follow the truth and reason to whatever results they lead, and bearding every authority which stand in the way of the virtue.
Credit Bank CEO: As credit bank we decided to go for private placement in 2015 and was approved by both CMA and CBK. We are inviting Kenyans to invest and this has been extended to FEP members. Please note that it’s not FEP investing but individuals investing directly in the bank. It’s a private placement and it’s by invitation. Those keen on investing can come directly to credit bank. All funds are being sent to credit bank and share certificates will be issued by credit bank.
Dr. Kimethu to Diaspora in FEP: The bank has the right to look for money. As a person in Diaspora in FEP you have the right to ask for accountability of your money in FEP. My article addressed the possibility of FEP CEO using this transaction to avoid accountability. I’m surprised that the Credit Bank CEO decided to put out statements and make this about Investment in Credit Bank rather than Diaspora capital accounting. I was also caught by surprise on the urgency and use of words “Share certificates,” as the accountability document. Note, share certificates whereas an accounting instrument, the real accountability of one’s money is the business plan and accounting documents. This got me asking myself: What can FEP CEO and Credit Bank CEO do once they get Kshs 5.4 billlion from Diaspora in FEP and issue Share certificates?
Credit Bank CEO: Why do investors invest in companies that have made losses? People who invest look for capital growth opportunities and potential otherwise if one can invest in multinational companies where returns are good and nil capital gains. PE funds go for worst performing companies and turn them around. If you look at the most profitable banks in Kenya especially the local ones, they were rejected in the 90’s when they were making losses. We all know the story of the biggest bank in Kenya as a case study. Let’s look at the potential. If today we are given an opportunity to invest in a start-up bank or one that has systems, structures, 14 branches etc. or one that has received a license, which one would be good to invest in?
Dr. Kimethu to Diaspora in FEP: The Credit bank CEO justifying investors invest in companies making loses to grow more capital is similar to a Car auto mechanic offering you to buy a damaged car from him for $5,000, then pay him $10,000 to make repairs and justifying you shall make profit once you sell. This is hogwash. Whereas true that Private Equity (PE) funds do go to failing companies. The Credit Bank CEO cleverly omits the fact that Private Equity (PE) funds are invested with attached with experts whose primary goal is to protect the funds and make profit for the Private Equity funds. I stated this on the article that Diaspora in FEP have to create a system that leads to a registry so if they invest their professional experts can represent them.
Credit Bank CEO: Credit bank has new management, and it’s ready for excellent growth. If you invest, your voice is very important. If you join as a customer, we value you and we will provide solutions. We have two kinds of people, those who spot and seize the opportunity and take a risk and those who let opportunities pass and have regrets later. Be wise and make an informed decision. It’s very rare that you get someone inviting you to participate in a private placement. Very few people participate in PPO’s and become founder shareholders. Talk to all successful companies and the owners will tell you that they only invite their friends to become owners and invite the public when they want to realize the sweat of their labor.
Dr. Kimethu to Diaspora in FEP: For a moment I thought I was reading lines from FEP CEO of how he would growth Kshs 200,000 to Kshs 200 million. I further cannot believe the Credit Bank CEO uses the words, “become founder shareholders,” with reference to a bank that has been in existence for 30 years, has in the last two years made Kshs 280 million loses and is sued for Kshs 2 billion. I was equally surprised by the statement, “successful companies invite friends.” I thought successful companies show their success to investors with money.
Credit Bank CEO: Why through FEP? FEP is only an agent reach the members. All cash is being invested in Credit bank to grow the business. All cash is being paid directly to the bank. FEP has negotiated a discounted price for their members. Again its members investing as individuals. Those willing only. We are creating a share register as new investors come through Custody Registrars as highlighted in the IM.
Dr. Kimethu to Diaspora in FEP: In the PPO FEP is a 5% shareholder of the Bank having invested our capital. However, in this statement FEP is an agent. This made me ask myself: Why is this plan set up to get me, “A Diaspora in FEP,” as an individual? Why does the Credit CEO state, “FEP is only an agent”?
Credit Bank CEO: Let me also point out that we can only succeed as organization or individuals if we focus on finding solutions. We need to make the world better and make a difference in each other’s lives.
Dr. Kimethu to Diaspora in FEP: I totally agree with the Credit Bank CEO on this remark. Indeed Diaspora in FEP goal when they put in thousands of hours and millions of dollars in cash was to develop Kenya and make a difference in many Kenyan lives as well as make a return when doing so. FEP CEO failed in understanding the first rule that investors don’t just need share certificates they also need accounting documents of what their money is doing. Equally surprising is the fact that the Credit Bank CEO does not want to live by what he advocates for. I think this bank CEO should first be accountable to those suing the bank for Kshs 2 billion if he hopes to make a difference. If a group of people sue for Kshs 2 billion that is what they belief one has harmed them.
How Diaspora in FEP Can be scammed Billions
Diaspora in FEP should understand the culture in Kenya today of scamming others particularly those with distance and time disabilities – i.e. us in Diaspora. We all are reading the scams engineered to make riches through tax payer money. The second scam today is based on getting Diaspora money.
I started by asking: “Can the FEP CEO engineer a Kshs 5.4 billion scam on Diaspora via credit bank to make himself a billionaire?” To get the answer I will use the title “The Wolf of Diaspora Money,” as borrowed from “The Wolf of Wall Street,” that involved a scam of $200 million (Kshs 20 billion) from investors.
1. “The Wolf of Diaspora Money,” first step is to lure “Diaspora in FEP,” to invest Kshs 5.4 billion in exchange for individual share certificates.
2. The Bank bad loans that are held as “Provisions,” in all likelihood because of the overpriced property process of write-off will then begin.
3. “The Wolf of Diaspora Money,” would buy the bad securities mentioned (property) at the “provision price.”
4. “The Wolf of Diaspora Money,” would then target his first “Diaspora in FEP,” victim who has bought the bank shares. A plan would be made to give them a loan with property and shares as collateral. The innocent “Diaspora in FEP,” is powerless and is about to pay Kshs 2 – 4 million to “The Wolf of Diaspora Money,” that is added to the provision price of the property.
5. “The Wolf of Diaspora Money,” can even engineer a plan to put up a person to live in house for 3 months through a strategy similar to pump and dump used in stocks.
6. The “Diaspora in FEP,” with a stroke of signing documents buys the property from, “The Wolf of Diaspora Money.” The “Wolf od Diaspora Money,” gets his Kshs 2 – 4 million. The bad loan that was a provision is now a mortgage loan to a Diaspora in FEP using Diaspora Kshs 5.4 billion. The person holding shares and property is so excited and preaches this to friends and bank grows.
7. The tenant used to pump up sales leaves the house and the house is empty. The property that was a “Provision in the Bank,” is now owned by an innocent person in “Diaspora in FEP,” who thought s/he was buying bank shares and a house.
8. The “Diaspora in FEP,” with a house that their shares in bank is collateral tries to get a person rent at the pumped price and can’t. S/he ends up renting at market rent and finds they shall have to add another $500 – $1,000 a month or $6,000 – $12,000 an year depending on the location of property.
9. “The Diaspora in FEP,” starts to understand this house is overpriced cannot meet the payments of the property and the property secured by shares of the bank goes to foreclosure.
10. “The Wolf of Diaspora Money,” is waiting to buy the foreclosed house and receive the shares of “Diaspora in FEP.”
11. Another “Diaspora in FEP,” is targeted again as an individual.
12. This simple process that uses writing off of bad loans through “Diaspora in FEP,” could transfer an average of $30,000 or Kshs 3 million to “The Wolf of Diaspora Money,” in a 5 year period collectively give “The Wolf of Diaspora Money,” even Kshs 5.4 billion to become a billionaire as the “The Wolf of Diaspora,” makes Diaspora slaves.
My opening line of this letter to you, “Diaspora in FEP,” was: “At one point since you invested your hard earned cash in FEP; you have been frustrated and in agony.” My question is: How much agony can befall you if such a scam was done to you and you had to work 80 hours a week frustrated and in agony?
In my article I advised you not to bite a bait before you know what is under the hook. I have shown you a simple plan that can prey on “Diaspora in FEP,” and rip us as individuals even the whole amount of Kshs 5.4 billion. Remember the “The Wolf of Wall Street,” took away $200 million (Kshs 20 billion) from investors. He never told them I’m ripping you off.
Diaspora in FEP are good people who God created to love others. Indeed we are appointed to progress Kenya and the world. We work hard and save the capital we invest. In the last 3 – 5 years we transferred millions of dollars to create FEP for we wanted to progress Kenya. The FEP CEO never wanted to progress Kenya or be accountable to you as the investor. If he was transparent, the investor would never have been angry or frustrated with FEP regardless of whatever ventures you and me were introduced to as the TRUTH in the “Contents in books of accounts of our money” since the first day money left our wallet to FEP would have been verified by those of us who can when needed.
Register in the “Diaspora in FEP Registry,” and we shall ensure the Diaspora money put in 2011 – 2015 is accounted for.
I am still asking those in Diaspora to continue registering in “Diaspora USA FEP Registry” Register by emailing to [email protected]