KCB ordered to keep off Sh145b in row with investment firm

KCB barred from interfering with Sh145 billion at the centre of a dispute with an investment firm.[File, Standard]

The Kenya Commercial Bank has been barred from interfering with Sh145 billion at the centre of a dispute with an investment firm.

Commercial Court in Nairobi issued the orders after Fox-Capital Investment Ltd sued the lender, accusing it of withholding funds wired by a Swiss company for six months without explanation.

“ Pending the hearing of this application inter-parties, the defendant or respondent whether by itself, its servants, employees and or agents be and is hereby restrained from trading with, interfering with, transferring, meddling and or dealing with any manner whatsoever and howsoever with the foreign inward EUR 978,675,835.00 remittance (being the equivalent of Sh 145 billion at the prevailing exchange rates as at the time of filing this suit) being held by the defendant or respondent in a “held – pre-settlement suspense" status under Incident No. KCB-FIN-IT-2026-0417 for the credit and benefit of the plaintiff or applicant,” ruled Justice Rhoda Rutto.

 The judge issued the orders after KCB claimed it did not have the money. Its lawyers Renson Ondieki and Kiragu Kimani claimed that Fox Capital had not proved that the bank had received the money.

“ The balance of convenience tilts against the grant or continuation of the orders sought, which would effectively require the defendant to treat and preserve EUR 978,675,835 as funds belonging to the plaintiff before the plaintiff has established that such funds were ever received by or are held by the defendant,” argued Kimani.

At the same time, Kimani argued against issuing the orders, saying that there was no suggestion that his client would be unable to pay damages in the event it is found culpable.

 Foxcapital Investment Limited, in the case, accused the bank of illegally withholding Sh 145 billion that was sent to it by Bay Bionics Limited, a firm based in Switzerland, to invest in Treasury bonds, public-private partnerships, and renewable energy projects.

According to Foxcapital’s lawyer Phillip Nyachoti, the money was wired to the bank on November 28, 2025, and the bank confirmed receipt of the money.

“ The plaintiff furnished the defendant with all the relevant documentary evidence in respect of the said transaction, but the defendant has failed and/or refused to credit the plaintiff’s account forthwith,” said Nyachoti.

 Foxcapital stated that it expected that the bank would remit the money after its internal banking fraud team cleared the transaction.

“The plaintiff avers that the defendant’s continued withholding of the funds, despite having successfully received the inward 978-million-Euro remittance, is unlawful, arbitrary, unreasonable, and in breach of its contractual and fiduciary obligations owed to the plaintiff as its customer,” said Foxcapital’s director David Dudi.

 Dudi further said that the money was intended to fund time-sensitive investments.

He claimed that despite the lender being aware that UBS Switzerland AG, the remitting bank, was threatening to sue and escalate the issue to the Bank for International Settlements (BIS) and the European Central Bank, the lender remained mum.

“ Despite receiving the funds, the respondent has, for over six months, without any unlawful justification and/or reason, refused to credit the applicant’s account notwithstanding that its own internal records confirm the transaction was duly cleared by its anti-money laundering compliance department and its IT security department, that no adverse findings exist,” argued Dudi.

He said that  Foxcapital had agreed with Bay Bionics on October 21, 2025, for financing. Bay Bionics was incorporated in England and Wales.

Following the deal, Dudi said, KCB required that Foxcapital provide all the supporting documentation to back the authenticity of the funds received.

Dudi alleged that after following up on the delayed remittance, the bank allegedly informed him that they had withheld the funds because of their own internal operational and system failure.

“  On April 17, 2026, the respondent’s finance and compliance operations department generated a P1 incident report classifying the transaction as a P1 (critical) incident and acknowledging that the funds had been retained in a pre-statement review buffer following a system routing and configuration fault which caused the transaction to bypass stage two of the respondent’s standard inward payment process,” he claimed.

 He insisted that the bank’s anti-money laundering compliance manager had confirmed that there was no evidence of staff compliance or adverse issues against Foxcapital.

 Dudi also claimed that on July 1, this year, KCB’s head of IT security also indicated that the money had not been remitted because of the bank’s system defect, which was caused by a maintenance exercise on April 17, 2026.

However, he claimed that a day after the bank’s IT system boss said that there was an issue, its customer excellence department told him that KCB had neither received the money nor sighted any financial SWIFT message.

“ The respondents’ continued contradictory and unjustified conduct promoted the applicant’s investor, Bay Bionics Limited, to issue a final letter of communication dated July 16, 2026, to the respondent’s Managing Director, in the said letter, Bay Bionics Limited expressly stated that t was dully appraised of the respondent’s own internal confirmations by its Treasury, Finance, Compliance and IT Security departments that the funds were in respondent’s possession,” he claimed adding that it also threatened to file a criminal case.

The firm now wants the court to force KCB to remit the money. At the same time, it is seeking interest on the contested amount from the date it was allegedly remitted.

It is also seeking damages for the alleged loss of business.

Dudi said that he had also raised concerns to the Central Bank of Kenya (CBK), citing serious ramifications on the failure to comply.

“ Despite the documentary evidence supplied by the applicant, the remitting bank, the applicant’s investor together with the respondent’s own Treasury, Finance, Compliance Department and IT Security Departments confirmation regarding the true status of the transaction, the respondent persistently denied and/or refused to credit the applicant’s account with the said funds,” he argued.

He attached KCB’s internal documents indicating that the bank’s second phase system had failed to flag the high-value remittance but indicated there were no sanctions or red flags about the money.

The case will be heard on September 17.