The legal tussle between Stanbic Bank and Afrik Aviation Limited centres on funds deposited into the airline’s account, which were later reversed under unclear circumstances. Stanbic, in its petition, claims that the Directorate of Criminal Investigations (DCI) is reopening an issue already resolved. According to the bank, the matter was investigated in 2016 by the Central Bank of Kenya, which advised both parties to seek an amicable resolution or pursue civil action
The Banking Fraud Investigations Unit (BFIU) has been temporarily barred from questioning Stanbic Bank Chief Executive Officer Joshua Oigara or any of the lender’s employees regarding the controversial reversal of millions of shillings from an airline’s account.
High Court Judge Bahati Mwamuye issued a conservatory order preventing the Directorate of Public Prosecutions (DPP), led by Renson Ingonga, from instituting criminal charges against Oigara, Stanbic directors, or staff pending a hearing set for December 10. The judge also permitted the DPP to apply for the discharge of these orders if deemed necessary.
The Dispute: Bank vs. Afrik Aviation
The legal tussle between Stanbic Bank and Afrik Aviation Limited centres on funds deposited into the airline’s account, which were later reversed under unclear circumstances. Stanbic, in its petition, claims that the Directorate of Criminal Investigations (DCI) is reopening an issue already resolved. According to the bank, the matter was investigated in 2016 by the Central Bank of Kenya, which advised both parties to seek an amicable resolution or pursue civil action.
The airline, however, accuses the bank of withholding funds critical to fulfilling a $20 million leasing contract with the South Sudan government. This contract’s termination allegedly caused significant financial losses for Afrik Aviation.
Tensions Rise as Investigations Intensify
Stanbic alleges harassment, stating that police officers camped at its offices, seeking to arrest its officials. The bank argued this was an attempt to intimidate them into dropping their defence in the ongoing civil suit. “The purported statement taking is intended to harass and intimidate the lender and hinder its ability to defend the proceedings pending before court,” said Janet Wanjohi, Stanbic’s head of legal, in a court affidavit.
The bank further questioned the timing of the summons, noting it coincided suspiciously with the opening of its defence in the High Court. Oigara was summoned by the BFIU for an interview and statement recording on October 17 but did not appear, prompting fresh summons from the police. Stanbic maintains that the ongoing attempts to open criminal proceedings are designed to coerce the bank into conceding to Afrik Aviation’s claims.
Captain Eric Lugalia, Managing Director of Afrik Aviation, dismissed Stanbic’s allegations, arguing that the police should be allowed to investigate without interference.“If the petitioners have nothing to hide, they should answer the issued summons,” Lugalia stated in his response to the court petition. Afrik Aviation, a former client of Stanbic Bank, operated its account at the lender’s Juba branch in South Sudan. The airline now seeks damages for losses incurred due to the reversal of funds and the subsequent termination of its lucrative contract with the South Sudan government.
As the court prepares to revisit the matter on December 10, tensions remain high. While Stanbic insists the issue has already been resolved, Afrik Aviation demands accountability, and the DCI is eager to proceed with its investigations. For now, Oigara and Stanbic’s leadership enjoy temporary relief, but the battle over the disputed millions is far from over.
