The High Court of Kenya has granted Equity Bank's request to freeze accounts belonging to four individuals and five companies accused of receiving part of the Sh1.5 billion allegedly stolen through fraudulent salary-disguised transactions. The court's decision was based on a strong case established by Equity Bank against the defendants, who include a former salary-processing manager, businesspeople, and company directors.
The disputed amount of Sh1.49 billion was allegedly diverted from Equity's salary-processing general ledger between November 2023 and June 2024. According to Equity Bank, its then Manager-Salary Processing, David Machiri Kimani, used his authorised access to transfer the money to third-party accounts, with some of the funds later allegedly converted into cryptocurrency. The bank claims that the defendants colluded to defraud it.
The court froze accounts held at various banks, including UBA, Absa, NCBA, Stanbic, and Co-operative Bank, as well as cryptocurrency holdings linked to three defendants: David Machiri Kimani, Owen Karanja Kuguru, and Ruth Muthoni Kamau. The frozen assets are capped at a combined Sh303.2 million, a significantly lower amount than the Sh1.5 billion allegedly stolen.
The defendants have challenged the bank's claims, with some denying any wrongdoing. Mr. Kimani's father, Joseph Kimani Machiri, filed an affidavit describing himself as his son's guardian and denied that Mr. Kimani owned cryptocurrency accounts or authorised the transactions. Mr. Kuguru claimed that companies linked to him provided legitimate trade-finance, import, and shipping services.
The court also dismissed an application by Ms. Kamau, who challenged Equity's use of confidential banking and personal information in seeking the freeze orders. The judge found that her lawyer had sworn an affidavit on contested matters, describing it as hearsay. However, the judge left the legality of the disputed personal and banking information for determination at the full trial.
The court's decision to freeze the assets was based on the risk that they could be dissipated, particularly because cryptocurrency can be transferred quickly. The judge cited SWIFT messages identifying Equity's code and the bank's general ledger as the source of the funds. The transfers were made using Mr. Kimani's assigned computer and user ID.
The court ordered the freezing of accounts belonging to several companies and individuals, as well as the conversion of digital assets held for Mr. Kimani, Mr. Kuguru, and Ms. Kamau on Binance or other cryptocurrency platforms into ordinary currency within 10 days. The proceeds will be deposited in a Central Bank-licensed tier-one bank, with the Central Bank of Kenya appointed as escrow agent.
Key points
- The court froze accounts and cryptocurrency assets worth Sh303.2 million linked to the alleged Sh1.5 billion heist from Equity Bank.
- A former Equity Bank manager, David Machiri Kimani, allegedly used his authorised access to transfer the money to third-party accounts.
- The defendants have challenged the bank's claims, denying any wrongdoing or legitimacy of the transactions.
