A Kenyan company, Adrian Kenya Limited (AKL), has filed a complaint with the Central Bank of Kenya (CBK) against Citibank Kenya.
AKL alleges that Citibank breached its contractual agreement and engaged in unethical banking practices.
What is the deal?
- In 2018, Citibank offered AKL a $10 million credit facility to support its business growth.
- In exchange, AKL opened operational accounts at Citibank and secured the loan with various assets.
- The agreement stipulated that AKL’s business payments would flow through Citibank, with the bank deducting loan repayments and allowing AKL access to the remaining balance.
AKL’s Allegations
- In 2021, AKL claims Citibank refused to issue a letter of credit needed to secure a Ksh 63 million contract with Athi Water Works Development Agency.
- In 2022, despite initially approving a letter of credit for a Ksh 36 million contract with KENGEN, Citibank later withheld the credit, causing the project to be terminated.
- In 2023, AKL alleges Citibank withheld funds in their accounts exceeding the agreed-upon loan repayment amount from a Ksh. 148 million deposit by Safaricom. This delay hampered AKL’s ability to fulfil contracts and pay suppliers.
- AKL further claims Citibank ignored their requests for additional financing and meetings to discuss the business relationship.
- Leaked internal Citibank emails suggest the bank aimed to exit the relationship with AKL while still collecting on the loan.
AKL’s Requests
- AKL is requesting the Central Bank of Kenya to investigate Citibank’s conduct.
- They seek to hold Citibank accountable for lost business opportunities.
- AKL also requests full financial restitution for any losses incurred.
Background
The complaint highlights the challenges faced by Kenyan businesses when dealing with international banks.
AKL claims they followed proper procedures to address the issues with Citibank but received no satisfactory response.
According to Adrian, the Central Bank of Kenya’s investigation will determine the validity of its claims and whether any regulatory violations occurred.
AKL is also pleading with the regulator to order full financial restitution for all losses it has incurred.
