Citibank Seeks High Court Orders to Stop Employee’s Arrest Over Ksh261 Million Loan

Citibank Kenya has asked the High Court to intervene in an ongoing investigation involving one of its employees, arguing that the officer is being unfairly targeted over the approval of a Ksh 261 million loan granted to Kiru Tea Factory Company Limited.

The bank has filed a constitutional petition seeking to stop investigators from summoning, questioning, arresting or prosecuting the employee as the case is heard in court. It argues that the investigations have crossed legal boundaries and are infringing on constitutional rights.

The dispute revolves around a loan facility worth $2.02 million, which was extended to Kiru Tea Factory. Detectives are investigating the process that led to the approval and release of the funds, with the employee at the centre of the probe accused of negligently handling the credit application.

However, Citibank says the investigation should not proceed in the manner it is because the employee was carrying out official duties within the bank’s lending process. The lender maintains that criminal liability should not be attached to routine banking decisions before the courts determine whether any laws were actually broken.

In documents filed before the High Court, the bank is wants conservatory orders to suspend all actions against the employee until the constitutional case is concluded.

The court papers state that investigators should be restrained from “summoning, arresting, charging or in any way whatsoever requiring the Interested Party to record statements or render interviews” while the petition remains active.

The filings further indicate that the employee is under investigation over claims of “negligently accepting a credit application and disbursing a sum of USD 2,020,000.00 to Kiru Tea Factory Company Limited.”

The loan has attracted the attention of investigators because it forms part of a wider inquiry into the affairs of Kiru Tea Factory and its former leadership. Authorities are examining whether all internal procedures were followed before the money was approved and whether documents presented during the application process were genuine.

The investigations have also been linked to former Kenya Tea Development Agency (KTDA) National Chairman Chege Kirundi, whose complaint prompted authorities to scrutinise the transaction. Detectives are reportedly investigating whether forged board resolutions or other company records were used to support the loan application and whether the money was eventually used for its intended purpose.

Citibank insists that while investigators have a duty to examine complaints, they must do so within the limits set by the Constitution. The bank argues that the actions taken against its employee violate the right to fair administrative action, equal protection under the law, access to information and the constitutional protection of property.

According to the lender, allowing investigators to continue summoning and questioning the employee before the constitutional issues raised in the petition are determined would amount to an abuse of legal process.

The bank is therefore asking the High Court to issue declarations that the investigations, as currently being conducted, are unconstitutional. It is also seeking permanent orders preventing investigators from pursuing not only the employee named in the petition but also any other Citibank staff over the same loan transaction.

In addition, Citibank wants the court to award compensation for what it describes as violations of its constitutional rights during the investigation.

The petition is not seeking to determine whether the Kiru Tea Factory loan was properly issued or whether the borrower complied with the terms of the facility. Instead, the case focuses on the conduct of investigators and whether they have acted lawfully while pursuing the bank’s employee.

The High Court is expected to consider the application for conservatory orders before hearing the substantive constitutional petition, with its decision likely to determine whether the investigations can continue as the legal challenge proceeds.