Bank property to be auctioned over missing Mbiyu estate funds

Ecobank Tower in Nairobi on 8th September 2016.[FILE,Standard] A High Court has allowed a city auctioneer to dispose of a bank's property worth more than Sh840 million. This is to recover funds mysteriously withdrawn by unknown persons from the estate account of the late Cabinet minister Mbiyu Koinange. The order issued on Friday, was triggered by Eco Bank's alleged failure to comply with a June 26, 2025, ruling by Justice Eric Ogolla compelling it to refund Sh284 million plus interest to the estate. In the ruling, Justice Ogolla held that the money had been mysteriously, illegally, and irregularly withdrawn from the estate's account without the administrators' knowledge, accusing the lender of allowing unknown persons to access funds in defiance of a subsisting court order. "The estate of a deceased person is a special estate protected by the law and administered under court supervision. ''The bank had a duty to ensure that no money was released without express judicial authorisation," Justice Ogolla ruled. In the latest order, the Deputy Registrar of the High Court issued a warrant commanding Moran Auctioneers to sell Ecobank's assets within 15 days after proper notice. "You are further commanded to return this warrant on or before November 18, 2025 with an endorsement certifying the manner in which it has been executed, or the reason why it has not been executed," the order reads in part. The auction directive builds on Justice Ogolla's earlier scathing ruling, where he faulted the lender for breach of trust and negligence. "Ecobank owed a duty of care to the estate. It stood in a fiduciary relationship to the estate and must therefore be held fully accountable to the beneficiaries. The casual manner in which the bank treated the said account and disbursed the money could only have been done by way of willful negligence, if not willful fraud," he stated. The ruling was triggered by an application filed by Eddah Wanjiru Mbiyu, one of the administrators and a widow of the late minister. In her affidavit, she revealed that proceeds from the sale of Closeburn Estate in Runda, worth Sh1.16 billion, had been deposited in Cooperative Bank, with Sh890 million later transferred to Ecobank. While some funds were distributed to beneficiaries, the balance of Sh284 million was to be held in trust. "To my shock, the entire sum was later withdrawn by unknown persons, without the court's knowledge or approval," Eddah stated. She added: "As a beneficiary of the estate, I am entitled to my share of the Sh284 million plus interest. ''As an administrator, I have a duty to ensure all beneficiaries receive their due. The money belonged to the estate of a deceased person. Ecobank, knowing this, had no legal mandate to release the funds without express court orders." Her lawyer, Senior Counsel Paul Muite, argued that the bank blatantly disregarded the Succession Act. "Even if the bank had not been served with the 2011 order, due diligence made it imperative for them to demand a court order as a condition for any disbursement. ''Instead, they allowed large sums to leave the account, in total disregard of their legal duty," Muite submitted while urging the court to compel the bank to refund the monies. Muite further urged the court to direct the bank to disclose all details of withdrawals and beneficiaries from the disputed account. The lawyer informed the court that In July 26, 2011, Justice Maraga issued a ruling, providing detailed directions for the distribution of proceeds from the sale of 100 acres of the deceased's Close Burn Estate. Maraga first authorised payments to be made to the beneficiaries of the estate from these proceeds. In recognition of their roles in facilitating the transaction, the conveyancing counsels involved in the sale were each awarded Sh 15 million. Additionally, the court ordered that the respective law firms involved in managing the estate receive legal fees for their services. The four administrators of the estate, along with Ms. Ruth Damaris Mbiyu, were also granted administration fees. Furthermore, the counsels who had defended the estate in the Muthera Farm suit were to receive partial legal fees. Advocates representing the beneficiaries were likewise to be compensated for their work. Importantly, the court directed that a sum of Sh 284 million be held by counsel in trust, not to be disbursed without court authorization, pending the resolution of claims by creditors or appropriate reservations being made for such claims. Ecobank, through Branch Manager Violet Monari, denied wrongdoing, claiming ignorance of the 2011 court order, which had been issued by then Justice David Maraga, now retired Chief Justice. Ecobank Kenya Limited added that following recent media reports concerning the Court's decision in Succession Cause No. 527 of 1981, which relates to the estate of the late Mbiyu Koinange, they have lodged an appeal against the judgment delivered by the High Court on 26 June 2025. The matter is therefore under active judicial consideration, and in respect of the principle of sub judice and the independence of the Courts, we are not in a position to discuss the substance of the case. We are taking all necessary steps to safeguard the Bank's position and protect the interests of our customers, employees, shareholders, and all other stakeholders. We remain confident in the ongoing legal process. Ecobank Kenya will continue to act responsibly, transparently, and in accordance with the law as this matter proceeds. "There is no evidence that the 2011 court order was ever served on the bank," she argued, adding that the last disbursement was made in 2014. However, Justice Ogolla dismissed the defense, ruling that the bank should have known the account belonged to a deceased person's estate. "Where an account is opened in the name of the estate, the bank must take constructive knowledge of the special category of customer. The amount involved was not trivial; it demanded managerial oversight," the judge ruled. Koinange, once the country's most powerful Cabinet minister, died on September 3, 1981. He left behind a vast estate, a sprawling polygamous family, and a bitter inheritance battle that has spanned over four decades.

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