Stanbic Bank and its Chief Executive Officer Joshua Oigara have challenged the Directorate of Criminal Investigations(DCI) summons in a Sh722 million row with an aviation company.
In the case filed before High Court judge Chacha Mwita, the bank says the Banking Investigative Fraud Unit (BIFU) summoned the chief executive on a day he was with President William Ruto at the Kenyatta International Conference Centre for Inua Biashara MSME Exhibition.
The investigators are also said to have sent Oigara fresh summons requiring him to go to the Kiambu Road headquarters to write a statement regarding an eight-year dispute between the lender and Air Afrik Aviation Ltd.
They say the DCI informed them that it was investigating an offence of fraudulent false accounting.
The bank now claims the investigative body is probing a complaint which had already been previously investigated and the bank cleared and is only seeking to interfere with another ongoing case.
Kamau Karori, the bank’s lawyer, says Air Afrik had filed a complaint with the Central Bank of Kenya over the same issue but the regulator threw it out after finding that the bank had done nothing wrong by debiting amounts it had erroneously wired to the firm.
Karori argues that Air Afrik filed a separate case before commercial court judge Nixon Sifuna and which was heard this week.
At the same time, he says Oigara was not working with Stanbic at the time of the transaction and that the DCI is being used to cripple the bank’s ability to battle Air Afrik in the commercial case.
“The alleged offence for which the inquiry by the first respondent is being made is premised on false, unjustifiable and erroneous presumptions that were previously investigated. The CBK did not find any wrongdoing on the part of the first petitioner and the second was not an employee of the first petitioner during the period the above events occurred. Those matters are now the subject matter of a civil suit and is therefore no legal or factual foundation and/or basis for summoning the second petitioner,” argued Kamau.
According to Stanbic’s legal officer Janet Wanjohi, the row stemmed from a transaction in 2016.
Wanjohi explained that Air Afrik was Stanbic’s customer in its South Sudan branch and it operated a business account in Juba.
She said that on February 5, 2016, Stanbic received a credit advice note from the Bank of South Sudan (BoSS) advising that its clearing and settlement account had been credited with USD 7.2 million (approximately Sh730.8 million) for Air Afrik.
The officer said that three days later, Stanbic credited the aviation company’s account with the money after deducting its commission.
Subsequently, Wanjohi said, Air Afrik withdrew at least Sh101 million from the account.
However, she explained that Stanbic realised that BoSS had not remitted the money it had instructed it to wire Air Afrik.
The court heard that the lender opted to freeze any further withdrawals and it notified the aviation company that the money in the account would be reversed.
“It therefore, in effect, mistakenly and erroneously credited the interested party’s account with its own money. The first petitioner proceeded to apply a “post no debit” instruction on the interested party’s account to prevent any further withdrawals and notified the interested party that the USD 7.2 million had been credited to its account in error and therefore the unutilized balance would be reversed,” claimed Wanjohi.
Wanjohi said that they held several meetings and exchanged correspondences between her employer, Air Afrik and BoSS in a bid to resolve the issue. All through, she argued, Stanbic maintained that it had no obligation to pay Air Afrik from its own money as the South Sudan’s government agency had not remitted the money.
At the same time, it argued that it had a right to reverse the money already in the account.
Wanjohi said that Air Afrik went ahead to file a complaint with the CBK on June 24, 2016, but the regulator threw it out.
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