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AB Bank Zambia has been dragged to the Lusaka High Court by Kemonic Trust, which accuses the financial institution of negligence and breach of statutory duty after allegedly failing to verify the ownership of a Lusaka property fraudulently used to secure a loan.
The Trust, which owns Subdivision No. 5 of Subdivision D of Farm No. 23A in Lusaka, is seeking damages after discovering that its tenant, Paul Makota—the first defendant—allegedly conspired with a former AB Bank officer, Zalus Banda, to obtain a credit facility using forged tenancy agreements.
According to court documents, the alleged fraud was carried out “around May 2024,” when Makota and Banda “acted in collusion” to submit falsified rental documents purporting to show inflated income from tenants on the property.
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The Trust claims that AB Bank approved the credit facility “without verifying property ownership at the Lands and Deeds Registry” and that the bank’s failure to follow proper banking and anti-money laundering procedures facilitated the fraud.
In its statement of claim, Kemonic Trust states:
“At the trial of this action, the plaintiff will aver that the defendant is mandated to pay to the plaintiff a contribution in respect of its employees in its employment at the end of each month.”
The Trust further contended that the bank’s conduct breached several provisions of the Banking and Financial Services Act (BFSA) and the Financial Intelligence Centre (FIC) Act, including sections on responsible lending, verification of customer information, and handling of false documents.
It argued that had AB Bank conducted due diligence and ongoing monitoring as required by law, “the fraud would have been detected early enough.”
Kemonic Trust also alleged that the bank “recklessly retained and relied on forged tenancy agreements” and even attempted to evict lawful tenants once the borrower defaulted on the loan, further aggravating the situation.
The Trust says the fraudulent transaction caused it “grave inconvenience, reputational harm, and financial loss,” including depreciation in the property’s value and legal expenses to correct the damage.
The lawsuit seeks general and exemplary damages for fraud and breach of contract from Makota and damages for breach of statutory duty from AB Bank.
It also requests costs and any other relief the court deems just.
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