High court rejects Kiru tea factory bid to join Citibank loan investigation case
The ruling leaves Citibank’s challenge to a DCI investigation intact, while Kiru maintains that its complaint concerns alleged unauthorised borrowing and repayment from factory funds.
KENYA – The High Court in Nairobi has dismissed an application by Kiru Tea Factory Company Ltd to join a case in which Citibank N.A. Kenya is challenging a criminal investigation into a disputed US$2.02 million (Kes 261 million) loan.
The court ruled that the farmers-owned factory, managed by the Kenya Tea Development Agency (KTDA), had not shown that excluding it would prejudice its interests or that it could provide information unavailable to State investigators.
“I am not persuaded that there is anything that the applicant (Kiru) will present that cannot already be provided by the respondents nor that it will be prejudiced if the Petition is heard in its absence,” the judge said.
The case concerns a US$2.02 million facility advanced by Citibank to Kiru in March 2021. The Directorate of Criminal Investigations (DCI) is examining how the loan was approved, disbursed and transferred.
In its July 13 application, Kiru asked to be admitted as an interested party and allowed to respond to Citibank’s petition. It said its complaint involved alleged unauthorised borrowing and repayment from factory funds.
Kiru chairman Geoffrey Chege Kirundi said the board had never authorised, applied for or approved the facility. He said the factory commissioned audits before filing a criminal complaint with the DCI.
“The active police inquiry is not a routine civil debt collection matter,” Kirundi said, describing it as an investigation into how the funds were obtained.
Kiru claimed the facility was neither received nor used by the company, while its funds were used to repay the loan and interest. It said the investigation affected more than 8,000 smallholder tea growers who own the factory.
Citibank opposed the application through Mugambi, arguing that the petition sought no order against Kiru and challenged whether investigators had exercised their powers lawfully. Mugambi said the facility was advanced within an ordinary bank-client relationship and governed by contractual terms.
He argued that Kiru had not demonstrated an identifiable stake and said its inclusion could introduce collateral disputes and allegations that would distract the court from Citibank’s constitutional questions.
It found that although Kiru’s complaint triggered the investigation, this did not require its participation. “It is trite law that the proper complainant in criminal proceedings is the Republic,” the court said, adding that a reporting party is ordinarily a witness for the Republic.
“I am not persuaded that the applicant would present a perspective on the said issues that is distinct from that likely to be proffered by the Respondents,” the court said, dismissing Kiru’s application.
The DCI investigation remains contested by Citibank. The bank says investigators are turning a commercial lending decision into a criminal matter and has questioned the alleged offence of “negligently accepting a credit application”.
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