Central Bank of Kenya (CBK) Governor Kamau Thugge has been summoned to court over a tussle for Sh970 million deposited by a Mauritian lender at Chase Bank (K) Ltd, less than two weeks before the bank collapsed in April 2016.
High Court judge Francis Gikonyo said Dr Thugge should appear on June 3 to explain why monies belonging to SBM Bank (Kenya) Ltd, which acquired Chase Bank, being held at CBK, should not be used to settle a debt owed to AfrAsia Bank Ltd.
The Mauritian lender has been pursuing the money, which has since risen to $13,968,784 (Sh1.8 billion) for more than nine years.
“The garnishee, Central Bank of Kenya through its Governor, to appear before the court on 3.6.25 to show cause why sums of money in the account of the judgment-debtor herein should not be attached and paid towards satisfaction of the decree herein,” Justice Gikonyo said.
In March 2016, AfrAsia Bank deposited $7.5 million (Sh970 million at current exchange rates) with Chase Bank at an interest rate of 2.3 percent per annum for one month.
The funds were due to mature and be payable on April 18, 2016, but Chase Bank was placed under receivership on April 7, 2016.
The collapsed lender was later sold to SBM (Kenya) Ltd. Before the acquisition, AfrAsia wrote to Chase Bank on May 6, 2016 regarding the funds and the latter allegedly confirmed liability and promised to reinvest the amount for a period of nine months.
When the money was not forthcoming, AfrAsia moved to court, demanding payment.
In the latest application, AfrAsia is seeking a court order to attach any funds belonging to SBM held at CBK and use them to pay off the debt.
According to AfrAsia, SBM Bank revealed in its unaudited financial statements for the period ended March 31, 2025, that it held approximately Sh31 billion in Kenyan government securities classified as ‘held to maturity’ and a further Sh6.9 billion as ‘available for sale’.
“The above shows that the judgment debtor (SBM) has substantial investment in government securities and can easily settle the decretal amount,” AfrAsia Bank said in court documents.
The Mauritian lender submitted that a judgment issued in its favour by the High Court on August 12, 2022, ordering SBM to pay $7.5 million plus interest.
AfrAsia further said that in case the CBK does not have sufficient funds to pay the amount, the banks’ regulator should be ordered to provide a list of government securities specifically treasury bills and bonds, held by SBM, for the sale of the shares on the Nairobi Securities Exchange.
“That leave be granted for the appointment of such licensed investment bank or stockbroker to liquidate such government securities held by SBM at CBK specifically treasury bills and bonds,” the Mauritian lender submitted.
AfrAsia said it wrote a demand letter on February 28 to CBK asking it to pay the amount, but has received no response.
“The decree holder is being kept out of enjoying its fruits of litigation contrary to the fundamental factor that a successful party is prima facie entitled to fruits of his judgment,” the bank said in the application.
SBM appealed against the High Court decision, but the Court of Appeal ruled that the application was procedurally defective.
