AB Bank faces lawsuit over alleged role in property fraud
AB Bank Zambia is facing legal action in the Lusaka High Court over allegations that it failed to exercise due diligence in a property-related loan transaction, resulting in financial and reputational harm to the property owner, Kemonic Trust.
The Trust, which owns Subdivision No. 5 of Farm No. 23a in Lusaka, has also sued its tenant, Paul Makota, for alleged fraud and breach of contract.
According to court documents, Makota, acting with a former AB Bank officer, said Zalus Banda, is accused of forging tenancy agreements to misrepresent rental income and secure a credit facility from the bank.
Kemonic Trust alleges that AB Bank, by failing to verify property ownership at the Land and Deeds Registry and relying on fraudulent documents, breached multiple provisions of the Banking and Financial Services Act and the Financial Intelligence Centre Act.
The Trust contends that the bank’s negligence facilitated the fraudulent transaction, which caused it significant inconvenience, financial loss, and reputational damage.
The lawsuit details a series of alleged statutory breaches, including the bank’s failure to conduct responsible lending assessments, its involvement with false documents, and omissions in ongoing due diligence obligations. Kemonic Trust claims that had AB Bank followed standard procedures, the fraud would have been detected before the credit facility was granted.
The Trust is seeking general and exemplary damages from the tenant, and damages for breach of statutory duty from the bank, alongside costs .