Relief for Absa bank in Sh1.5 billion secret information leakage order

AbsaBank2302C
AbsaBank2302C

A judge has suspended the execution of a court order requiring Absa bank to compensate a transport firm Sh1.5 billion for allegedly leaking its confidential financial information to third parties.

Justice Njoki Mwangi slammed the brakes on the order following a request by the lender, which intends to challenge the compensation award. The order dated November 10, 2022 was issued by the High Court in Mombasa to New Mega Africa Ltd.

Asking the court to hold execution pending the hearing of its application for stay, the bank argued that in absence of the suspension the company would have moved to claim the award. The judge also certified the request as urgent and fixed it for hearing on December 14, 2022.

The order for the compensation was issued after the bank failed to defend the case filed by the transport firm claiming damages for loss suffered due to the financial institution’s alleged action.

“The defendant having been duly served and having failed to file defence within the stipulated period of time, and upon application of the plaintiff’s advocate, I enter interlocutory judgment as prayed,” the judgment signed by the Deputy Registrar reads.

In the suit the company, which transports clinkers from Kenya to Tororo Uganda for the manufacture and processing of cement and other related products, accused the lender of financial sabotage and disclosing its financial statements to strangers without consent. The firm alleged that the bank failed to maintain secrecy of the client’s account by printing the client’s financial statements without authority or consent and sharing the same with strangers without its express consent.

The row stemmed from the bank’s alleged refusal to approve the company’s loan request on time crippling its business. The advance was secured through a charge over a property located in Kitisuru, Nairobi among other securities.

It is also alleged that numerous letters written to the bank requesting for restructuring of the loan were met with long delays affecting the firm’s operations.

However, the leaked firm’s financial statement scared other financiers who refused to lend the company money on an account that it had gone broke and lacked the financial muscle to service loans.

The case will be mentioned on December 14 for hearing of the bank’s case against the award.

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