Bank ordered to pay ex-employee Sh800,000

A bank has been ordered to pay Sh800,000 to a former employee it listed with a credit bureau as a bad debtor.

Kenya Commercial Bank (KCB) was directed by Resident Magistrate Leah Kabaria to pay its former treasury department employee Allan Mbindyo Odhiambo the money for defaming him.

"The burden of how much was owed rested with the defendant (KCB). This is a sad case of the litigant throwing documents to the court and asking for damages without making an effort to establish how the amount claimed came to be," Ms Kabaria ruled.

The court in its ruling said the act listing of the career banker as loan defaulter was not proven beyond reasonable doubt by lawyer Titus Koceyo, who said: "The bank does deserve mercy and protection offered under Section 31 (5) of the Banking Act".

He submitted that the act by KCB to report Mr Odhiambo to the Credit Bureau Africa Ltd and Metropol Credit Reference Bureau Ltd as a "bad debtor" had no basis in law and therefore ought to be compelled to compensate him for defamation.

Koceyo urged the court to rule that the bank did not even know the money it was claiming from Odhiambo from its tabulation.

The court noted that although the bank alleged it was owed a loan of Sh21,621 by Odhiambo, it later emerged that "the amount owing is not known".

"After analysing the claim of the bank from its former staff it is crystal clear it was claiming a salary debt and that the plaintiff (Odhiambo) did not have any outstanding loan facility by the time he quit employment on January 25, 2008," Ms Kabaria ruled.

In the seven-page judgement, Kabaria said:  "KCB admitted it irregularly forwarded Odhiambo's name to the credit bureau as a loan defaulter and as such it defamed him."

As a result of the report, Odhiambo was denied a loan request he placed with the Standard Chartered Bank of Kenya Ltd, the court ruled. Odhiambo had sought to be paid Sh2 million in damages.