When investigators started asking how Ksh 261 million left Citibank Kenya's books and ended up in the middle of a tea factory boardroom war, the bank did not offer an explanation, and instead it went to the High Court asking that the entire investigation be stopped before its own chief executive ever has to answer a single question about it.
Citibank Kenya has petitioned the High Court not merely to slow the DCI's investigation into CEO Martin Mugambi, but to end it outright, and to do so before he records so much as a statement.
The target of the probe is a $2.02 million loan, worth Ksh 261.1 million, that the bank sent to Kiru Tea Factory Company Ltd, a factory in Murang'a managed under the Kenya Tea Development Agency (KTDA), and investigators want to know whether the loan application rested on forged board documents, where the money actually traveled once it left the bank, and who stood to gain once it moved through several hands.
The timing of that loan is where the story becomes hard for the bank to explain away.
The application was submitted right in the middle of a leadership coup inside Kiru Tea Factory, a split so severe that the factory ended up holding two competing annual general meetings within a matter of days, each side claiming to be the legitimate board of the company, and it was into that exact environment of contested authority that Citibank chose to disburse hundreds of millions of shillings.
The question the DCI is now trying to answer is a plain one, and it is whether anyone at the bank checked who genuinely held authority to borrow on behalf of the factory before the cash went out the door, or whether the money moved simply because someone produced paperwork that nobody at the bank bothered to verify.
A Loan at the Centre of the Dispute ¶
Rather than let an investigation answer that question, Citibank asked the court for orders barring the DCI, the Attorney-General and the Director of Public Prosecutions from summoning, arresting, charging or requiring Mugambi to record a statement over what investigators describe as negligently accepting a credit application and disbursing the loan that followed it.
The court has already granted interim orders freezing the DCI's work on the matter while it waits to hear the full case, which means that for the moment, a foreign lender has succeeded in placing its own chief executive beyond the immediate reach of Kenyan investigators without him having said a word to anyone conducting the inquiry.
Court Steps In ¶
It is worth noting how differently Citibank's own parent company tends to handle this kind of moment.
Citibank Kenya operates as a branch of Citibank, N.A., a federally chartered institution in the United States that trades on the New York Stock Exchange and answers to American regulators as a result, and in that home market it is common practice for a bank to place an executive under criminal investigation on a leave of absence so that the institution can put visible distance between itself and whatever the inquiry eventually finds.
Citibank has run its Kenyan operation as a two-branch presence since 1974, it booked a profit of Ksh 6.5 billion last year, and it sent Ksh 10.5 billion back to its American parent in 2025, and none of that scale or profitability has produced the same instinct for distance here, because rather than stepping Mugambi back from his role while the matter is examined, the bank went to court to make sure he would never have to be examined at all.
Questions Over Due Diligence ¶
The DCI is not waiting on the outcome of that constitutional petition to build its case.
In a separate application before a magistrate's court in Nairobi, investigators secured search warrants on June 18, 2026, compelling Citibank to hand over bank statements, the paperwork used to open the relevant banking relationship, real-time gross settlement payment instructions, and the board resolutions Kiru Tea Factory used to support the loan, all covering the period between March and December 2021.
Investigators are specifically trying to trace transfers that moved funds out of Kiru Tea Factory and into funds held under the name of Litein Factory Company Ltd, a transfer of money between two tea factories that has no obvious commercial explanation on its face.
Court filings show that the loan itself was approved back in September 2019, yet it was not disbursed until March 2021, and it is that gap, along with everything that happened to the money once it finally moved, that investigators are now trying to reconstruct from the bank's own records.
Following the Money ¶
The complaint that triggered all of this came directly from Kiru Tea Factory's own chairman, Chege Kirundi, whose claim is straightforward and serious: that the loan was obtained using corporate paperwork that did not reflect any decision made by the factory's lawful board, that forged resolutions were used to secure the facility, and that the money was then diverted rather than spent on whatever purpose it was supposedly borrowed for.
None of that has been proven in any court and it remains a claim rather than a finding, but it carries enough weight that the chairman of the company put his name to it and asked investigators to trace every shilling from the moment it left the bank.
One detail in the complaint should have been caught long before any investigator ever needed to look for it, and that is the fact that the loan paperwork could not even agree with itself about why the money was being borrowed in the first place, since one set of documents described it as working capital.
In contrast, another described the very same facility as financing for capital expenditure.
That kind of contradiction sitting inside a single loan file is exactly the sort of thing a functioning due diligence process is supposed to catch before hundreds of millions of shillings ever leave a bank, not something that has to be pieced back together years later through search warrants and court filings.
Citibank's Defence ¶
Citibank's response to all of this is to argue that the whole matter sits below the threshold of the criminal law entirely.
The bank's petition claims that investigators have not identified any recognized offence at all, and that what is really taking place is an ordinary commercial dispute that has been dressed up to look like a crime, and in the words of its own advocate the bank describes the case as a pretextual use of the criminal justice system aimed at serving an improper purpose in what it calls a purely commercial transaction.
It goes further still, accusing the DCI of issuing vague and unparticularised summons as part of what it calls a deliberate attempt to weaponise the criminal justice system for the purpose of intimidation and leverage in a dispute the bank insists is civil in nature.
The bank has not asked merely for a pause in the proceedings.
It has asked the court to declare the investigation unconstitutional outright, on the basis that it violates rights to equality, property, access to information and fair administrative treatment, and it has asked for damages to be awarded to both the bank and to Mugambi personally over what it calls the harm caused by the inquiry.
Its petition asks for a permanent order stopping the DCI, the Attorney-General and the Director of Public Prosecutions, whether acting themselves or through their own servants and agents, from ever investigating, summoning or arresting Mugambi in connection with the loan.
A Factory Divided ¶
Underneath the legal filings sits a much older and messier fight.
Kiru Tea Factory has spent years caught in disputes over its own leadership, with rival factions accusing each other of unauthorized withdrawals from factory funds, of paying directors' allowances and legal fees without proper approval, and of generally mismanaging the resources of the company, and it was into that exact climate of internal dysfunction that Citibank's disputed loan was approved and later disbursed.
That is precisely why investigators say the bank's due diligence matters so much here, and it is precisely why a request to shut the investigation down before that due diligence can ever be examined looks, to anyone reading the filings closely, less like a defense of ordinary banking conduct and more like an attempt to make sure that conduct is never examined by anyone outside the bank at all.
None of the claims at the center of this case, whether about forged documents, diverted funds, or a lack of real authority behind the loan application, have been tested or decided by any court, and Citibank's own position remains that no crime took place here whatsoever.
The High Court is set to hear the full constitutional petition on September 17.
