A Kenyan telecommunications company, Adrian Kenya Limited (AKL), has ignited a firestorm by lodging a complaint with the Central Bank of Kenya (CBK) against American financial powerhouse Citi Bank. The accusations center on alleged unethical practices and a blatant disregard for contractual obligations, threatening not only AKL’s business but potentially shaking the confidence of Kenyan businesses in foreign banks.

The Deal Gone Sour:

In 2018, things appeared promising. AKL, seeking to propel its growth trajectory, secured a significant $14 million credit facility from Citi Bank’s Nairobi branch. AKL provided various safeguards to secure this funding, including land charges and corporate guarantees, demonstrating their commitment to the agreement. The terms seemed straightforward: Citi Bank would deduct monthly repayments from AKL’s business earnings channelled through their accounts. However, according to AKL’s complaint, this harmonious partnership took a sharp turn for the worse in 2021.

A Pattern of Alleged Obstruction:

AKL alleges a systematic pattern of obstruction by Citi Bank starting in 2021. Here are some of the concerning actions outlined in the complaint:

• Roadblocks to Secured Contracts: When AKL secured contracts, such as the one with Athi Water Works Development valued at Ksh. 63 million, Citi Bank allegedly refused to issue crucial letters of credit, hindering project execution and ultimately leading to contract termination.
• Unexplained Fund Withholding: In 2023, AKL claims Citi Bank inexplicably withheld a substantial Ksh. 148 million deposited by Safaricom into their accounts. This action, according to AKL, severely hampered their ability to meet financial obligations to critical suppliers and government entities like the Kenya Revenue Authority.
• Stonewalling Communication: Despite attempts to reach an understanding, AKL alleges that Citi Bank repeatedly ignored their requests for meetings and additional financing in 2024.

A Leaked Email and a Shocking Revelation:

Adding fuel to the fire, AKL’s complaint includes a bombshell – a leaked internal Citi Bank email. This email allegedly exposes the bank’s true intentions: to “exit” the relationship with AKL, seemingly contradicting their initial promises of support. This revelation suggests a potential pre-meditated strategy that contradicts the spirit of the initial agreement.

School fees for all children in National Schools to be paid via e-Citizen

Seeking Justice and Accountability:

AKL is seeking decisive action from the CBK. Their demands include:

• A comprehensive investigation into Citi Bank’s conduct to uncover the truth behind these allegations.
• Holding Citi Bank accountable for any demonstrable losses incurred by AKL due to the bank’s actions.
• Full financial restitution to compensate AKL for damages caused by the bank’s alleged breach of contract and unethical practices.

Wider Implications:

This case has the potential to trigger a wave of concerns. If substantiated, these accusations could raise serious questions about the ethical conduct of foreign banks operating in Kenya. The CBK’s investigation outcome will be closely watched, as it could set a precedent for how similar future disputes are handled. Kenyan businesses, already navigating a competitive landscape, may become wary of relying on foreign banks if a trusted institution like Citi Bank is found to have allegedly acted in such a manner.

A Call for Scrutiny:

This situation demands thorough investigation and transparency.