Trader accuses two banks of illegally freezing his accounts

A Nairobi trader has moved to court seeking to compel two lenders to unfreeze his bank accounts, alleging their action amid liquidity strains on his business is illegal.

Robert Kamau Mbugua filed the case under a certificate of urgency, accusing NCBA #ticker:NCBA and Absa banks #ticker:ABSA of unilaterally freezing his two accounts without his knowledge. He said the freeze happened more than a month ago. He urged the court to intervene and allow him to access his accounts. The affected accounts are at NCBA Mama Ngina and Absa Garden City.

Mr Mbugua said he has not accessed his NCBA account since September 1 and Absa account since August 26. At the time the accounts were frozen, the balance in the Absa bank account was Sh1.1 million while the account at NCBA had Sh41,813. He said he went to the Garden City branch on October 19 and was informed that the system was down.

The businessman said he went to check with NCBA but was held by officers from the bank fraud unit. He was later taken to Ex-Telecom where he was questioned for hours and released without any charges preferred against him.

“That as I indicate below, the said unilateral freezing of my accounts has greatly disrupted my business and livelihood as most, if not all of my operations have been brought to a halt or greatly declined,” he said.

He said the decision to freeze the two accounts without a court order and without informing him is unilateral and illegal. Freezing the accounts, he added, is an intrusive measure of extreme dimensions and the banks ought to have fully disclosed to him, without delay.

Mr Mbugua argued that the court had the power to protect fundamental rights and the interest of justice will be served, if the accounts are unfrozen.

The businessman said he has not been implicated in any criminal activities. In the petition, Mr Mbugua said he has since noticed some Sh999,999 being debited in the Absa account and later Sh41,813 withdrawn from the same account.

This he said, happened despite the account being frozen, and that the money was transferred to other bank accounts, unknown to him.

“It is not clear whether there are any ongoing investigations or if they were completed as the banks have not bothered to unfreeze the accounts,” he said.

He claimed that the banks have been making inquiries from his clients making deposits in the accounts, inquiring the source of the funds being deposited, without informing him.

Mr Mbugua said the calls were injuring his reputation and he was losing trust with his clients.

“That as I have stated, my life is slowly grounding to a halt as my working capital has been taken away and my bank accounts remain frozen,” he said in an affidavit.