Citibank N.A. Kenya has petitioned the High Court to stop criminal investigations against its CEO, Martin Mugambi, over a disputed Sh261 million loan advanced to a Murang’a-based tea factory managed by the Kenya Tea Development Agency (KTDA).
In its court filings, the bank says the Directorate of Criminal Investigations (DCI) is unlawfully criminalising a commercial lending decision in investigating Mr Mugambi over the approval and disbursement of the loan to Kiru Tea Factory Company Ltd.
DCI wants to establish whether forged board documents were used in the application of the $2.02 million (Sh261.1 million) loan, how the cash was disbursed, and the beneficiaries of the millions of shillings amid claims of diversions.
The complaint asked investigators to establish whether any assets were acquired and trace the ultimate beneficiaries of the money.
Citibank disputes the investigation’s legal basis.
It argues that investigators have failed to identify any recognised criminal offence arising from the loan approval.
The bank says the allegations concern a commercial lending decision made through normal banking processes and should not expose its officials to criminal sanctions.
‘The petitioner therefore believes that the alleged offence is not genuine but is instead a pretextual invocation of the criminal justice system aimed at advancing an improper purpose in respect of a purely commercial transaction,’ says its advocate.
In its petition, the bank has asked the court to declare that the investigations have violated constitutional guarantees, including the rights to equality, property, access to information and fair administrative action.
It also seeks declarations that the alleged breaches have caused damage to both the bank and Mr Mugambi.
‘The respondents, either by themselves, their servants and agents, be restrained from investigating, summoning or arresting the interested party,’ the petition states, pending determination of the constitutional case.
The court papers underscore the wider governance dispute surrounding Kiru Tea Factory. The complainant accuses rival officials of approving unauthorised withdrawals, paying directors’ allowances and legal fees without approval, and mismanaging factory resources.
The High Court will hear the application on September 17.