The High Court has ordered KCB Bank to hand over key internal documents, or formally explain their absence, in a lawsuit where a security firm and its directors say the bank is trying to recover money that was never lawfully borrowed.
- •In a ruling delivered by Justice Njoki Mwangi, the bank must produce all documents requested by the directors of Gillys Security & Investigations Ltd. within 30 days.
- •Where any records cannot be traced, KCB must file a sworn explanation detailing what happened to them and what efforts were made to trace them.
- •In 2023, KCB filed the lawsuit against the security firm claiming more than KSh84 million from two of its directors, John Walter Owino and Beatrice Akinyi Mboya.
“This Court notes that KCB has not provided any cogent explanation as to the fate of the documents being sought. A bare assertion that documents are not in its possession does not sufficiently discharge the bank's duty of candour in the discovery process,” Justice Njoki Mwangi stated.
“Since KCB maintains that certain documents are not in its possession or control, it bears the burden to explain on oath, the efforts made to trace the documents and their current status. Such transparency is essential to preserve the integrity of the discovery process,” she added.
The bank says Gillys’ account was overdrawn in early 2016, that the overdraft was later converted into an unsecured loan, and that the directors signed letters of offer confirming the facility. After several restructurings, including one in 2019, the loan allegedly fell into default. KCB maintains that the debt remains unpaid and enforceable.
The directors said that they never applied for any loan. Instead, they allege that KCB staff at its Prestige Plaza branch secretly credited and withdrew funds from the company’s account without instructions. They also added that the bank later pressured them, using threats of blacklisting and recall of other facilities, to sign loan documents that were meant to “clean up” the internal fraud. They argue that the debt KCB is now claiming is not a loan at all, but the paper trail of alleged misconduct by bank employees.
After the case was filed, the directors asked KCB to produce internal records tied to the transactions including documents referenced in the bank’s own investigations. They argued these records were essential to show how the money moved and who authorized it.
KCB refused and said it had already disclosed everything it intended to rely on and that most of the requested documents were no longer in its possession. The bank, however, produced a forensic report on one of the accounts. Justice Mwangi noted that the forensic report itself referred to other documents that had not been produced.
A bare statement that documents were unavailable was not enough, according to the final ruling; especially when the documents went to the heart of the dispute. While the court dismissed the directors’ plea to have KCB’s lawsuit terminated outright, the judge pressured the bank to fully disclose records that could prove their account of events.
