Citibank N.A. Kenya has petitioned the High Court to stop criminal investigations against its CEO, Martin Mugambi, over a disputed Sh261 million loan advanced to a Murang’a-based tea factory managed by the Kenya Tea Development Agency (KTDA).
In its court filings, the bank says the Directorate of Criminal Investigations (DCI) is unlawfully criminalising a commercial lending decision in investigating Mr Mugambi over the approval and disbursement of the loan to Kiru Tea Factory Company Ltd.
DCI wants to establish whether forged board documents were used in the application of the $2.02 million (Sh261.1 million) loan, how the cash was disbursed, and the beneficiaries of the millions of shillings amid claims of diversions.
The investigators are seeking to find if Citibank Kenya conducted due diligence on Kiru Tea Factory and whether the factory’s credit application was backed by people who had authority from the tea firm.
The loan application was made in the middle of a board coup at Kiru Tea Factory, triggering a leadership split that saw the firm hold two rival AGMs in a span of days.
The Citibank petition has sought orders barring the DCI, the Attorney-General and the Director of Public Prosecutions from summoning, arresting, charging or requiring Mr Mugambi to record statements over what investigators describe as the offence of “negligently accepting a credit application” and disbursing the loan to Kiru Tea Factory.
The court has since granted interim orders blocking the DCI’s probe at the US lender over the credit facility pending a full hearing on the application seeking to shield the bank and Mr Mugambi from police.
The two-branch Citibank Kenya operates as a branch of Citibank, N.A., which is listed on the New York Stock Exchange, placing the lender under the direct watch of US authorities.
Citibank, N.A. Kenya is a branch of Citibank, N.A., a federally chartered National Banking Association, organised and existing under the laws of the United States of America.
In the US, a bank executive under investigation for criminal action is often placed on a leave of absence in efforts to distance the institution from the police action.
The Kenya unit has operated as branch since 1974, and made a profit of Sh6.5 billion last year as it repatriated Sh10.5 billion to the parent company in 2025.
In a separate application before a magistrate’s court in Nairobi, the DCI secured search warrants allowing investigators to obtain records from Citibank relating to the loan and fund transfers between March 2021 and December 2021.
The order was issued on June 18, 2026.
The DCI sought banking records linked to the disputed loan, including account statements, account opening documents, real‐time gross settlement (RTGS) payments and instructions, as well as Kiru Tea Factory board resolutions.
The transfers, court filings say, should include the wiring of the millions from Kiru Tea Factory to an account in the name of Litein Factory Company Ltd.
The application said the documents were required to establish how the loan facility was approved, disbursed and utilised.
Court documents indicate the disputed loan facility was approved in September 2019, while investigators are tracing its March 2021 disbursement and subsequent movement through banking records.
However, Citibank argues the investigation violates constitutional protections and attempts to convert a commercial transaction into a criminal case.
It has asked the court to restrain investigators from pursuing Mr Mugambi or any other employee over the loan.
“The respondents have breached the petitioner’s and interested party’s fundamental rights,” said Citibank in the court papers.
“The manner in which the summons has been issued and the vague, unparticularised allegations advanced demonstrate a deliberate attempt to weaponise the criminal justice system for extraneous purposes, including intimidation and leverage in a matter that is civil in nature.”
The petition centres on a loan extended to Kiru Tea Factory, which has for years been embroiled in disputes over its leadership and governance.
Rival factions challenged the legality of board decisions, while complaints lodged with investigators allege forged directors’ minutes, unlawful appointments and misuse of factory funds.
The complaint prompting the investigation was lodged by the Kiru Tea Factory Company chairman Chege Kirundi.
It alleges the loan was obtained using corporate documents that did not reflect the decisions of Kiru Tea Factory’s lawful board.
The complaint claimed individuals presented forged resolutions and other records to secure the facility and later diverted the proceeds.
Those allegations have not been determined by the court.
The complaint further alleged that the loan documentation contained inconsistencies over its intended purpose.
One set of documents allegedly referred to working capital while another described the borrowing as financing capital expenditure.
The complaint asked investigators to establish whether any assets were acquired and trace the ultimate beneficiaries of the money.
Citibank disputes the investigation’s legal basis.
It argues that investigators have failed to identify any recognised criminal offence arising from the loan approval.
The bank says the allegations concern a commercial lending decision made through normal banking processes and should not expose its officials to criminal sanctions.
“The petitioner therefore believes that the alleged offence is not genuine but is instead a pretextual invocation of the criminal justice system aimed at advancing an improper purpose in respect of a purely commercial transaction,” says its advocate.
In its petition, the bank has asked the court to declare that the investigations have violated constitutional guarantees, including the rights to equality, property, access to information and fair administrative action.
It also seeks declarations that the alleged breaches have caused damage to both the bank and Mr Mugambi.
“The respondents, either by themselves, their servants and agents, be restrained from investigating, summoning or arresting the interested party,” the petition states, pending determination of the constitutional case.
The court papers underscore the wider governance dispute surrounding Kiru Tea Factory. The complainant accuses rival officials of approving unauthorised withdrawals, paying directors’ allowances and legal fees without approval, and mismanaging factory resources.
The High Court will hear the application on September 17.
