By The Weekly Vision Investigations Reporter
Kenyan banks have lost hundreds of millions of shillings to a persistent fraud scheme built on fake and parallel land titles, with courts repeatedly finding that the racket could not succeed without help from within the Ministry of Lands and county registries.
The pattern is now well established in Kenyan case law in which fraudsters exploit gaps in record-keeping, including missing “green cards,” to generate duplicate titles for the same parcel, or to transfer land belonging to deceased owners without going through succession. Banks conduct official registry searches that come back clean, accept the resulting titles as security, and disburse loans, only to discover later that the title underlying the charge is void. Kenyan courts have consistently held that a charge over an invalid or fraudulent title creates no enforceable security interest, leaving lenders exposed while protecting the genuine owner.
Courts hearing these disputes have repeatedly observed that the scale and sophistication of the fraud implies internal assistance at the Lands Ministry. A multi-billion-shilling digitisation programme is underway at the ministry to close the gaps that make such schemes possible. Still, litigation continues, and major lenders, including Equity Bank, Co-operative Bank, NCBA, Absa and Consolidated Bank, remain entangled in disputes that could produce further write-offs. The most prominent example to reach the Court of Appeal centres on a half-acre parcel in Dagoretti/Riruta.
Some of the most prominent cases happened between 2010 and 2014, when members of the Kang’ethe family, including Patrick Njuguna Kang’ethe, Edward Njuguna and George James Kireru Kang’ethe, trading variously as Patrick Kang’ethe & Sons and through companies including Wardpa Holdings, obtained multiple original-looking titles for the same plot and used each to secure separate bank loans. Co-operative Bank advanced approximately KSh166 million in 2010, the first of the three loans.
Commercial Bank of Africa, now NCBA, advanced around KSh100 million in 2013. Equity Bank advanced approximately KSh200 million around 2014. Combined principal exposure across the three lenders came to roughly KSh466 million, rising to close to KSh490 million with interest. Each bank’s registry search had shown no prior encumbrance, and each retained what appeared to be an original title.
The scheme unravelled when Co-operative Bank moved to auction the land and rival claims from the other two lenders emerged. The High Court, presided over by Justice Samson Okong’o, allowed Co-operative Bank to proceed with the sale, ruling that the later charges, created against parallel or fake titles, were invalid relative to the first, genuine charge. The Court of Appeal upheld that finding, describing the case as “perplexing” and remarking that three of the country’s top banks appeared to have been caught up in an intricate web of fraud engineered by their own mutual customers.
The appellate judges went further, stating that such transactions could not have succeeded without collusion within the Lands Ministry, and noted it was perplexing that none of the perpetrators had been subjected to criminal process. Equity and NCBA were left to absorb the losses; Co-operative Bank alone recovered its money by virtue of holding the priority charge.
A second case, decided by the Environment and Land Court on 6th March 2025, illustrates how the fraud plays out against an individual smallholder. David Wakaimba had lawfully purchased a 1.2-acre plot in Ruiru in 1994. Between 2009 and 2010, a fraudulent title to the same land was created in another person’s name and used to secure a KSh7 million loan from Equity Bank. The genuine green card was later found to be missing from the Thika Land Registry.
Justice Oscar Angote declared Wakaimba the rightful owner, cancelled the fraudulent title and nullified Equity Bank’s charge over it. Drawing on a 2023 Supreme Court precedent concerning defective roots of title, the judge held that no protection is available to a purchaser, including a chargee bank, where the root of a title is defective or tainted by illegality, and that a charge over an invalid title cannot create a valid interest in land. Equity Bank lost its security despite having conducted a search and advanced funds in apparent good faith.
A third case, heard in Kericho before Justice Sila Munyao, concerned land belonging to Kipkoech Tele, who died in 1987. Consolidated Bank had advanced KSh1.2 million against a title created in 2012 by a fraudster who had bypassed succession entirely. The bank discovered the fraud only when it attempted to auction the property, at which point the Tele family successfully reclaimed the land. The court nullified both the fraudulent title and the bank’s charge. Justice Munyao held that a person with a genuine title should not be deprived of it through the activities of fraudsters, and that no fraudster or beneficiary of fraud should be permitted to gain from it. The bank’s defence, that it was an innocent purchaser for value, having relied on a clean registry search, failed, because fraud in the chain of title invalidated all subsequent interests, including the charge. The court additionally found the bank’s due diligence inadequate.
Kenyan courts have applied a consistent principle in these disputes: that a chargee cannot acquire better rights than the chargor held (nemo dat quod non habet), meaning that once a root title is shown to be fraudulent, illegal, or obtained without proper succession, any bank charge built on it collapses regardless of the lender’s own conduct.
A report by the Office of the United States Trade Representative has flagged fake and double-issued land titles as a risk to Kenya’s investment climate. Banks’ standard due diligence, official searches and retention of what appear to be original titles have repeatedly proven insufficient wherever internal Lands Ministry processes have been compromised.
