The Central Bank of Kenya has been sucked into a dispute in which Barclays Bank #ticker:BBK closed the accounts of controversial businessman Paul Kobia over the source of his money.
Justice Wilfrida Okwany Monday gave the CBK 21 days to respond to Mr Kobia’s claims that the regulator is behind the closure of his bank accounts by Barclays Bank.
Mr Kobia claims the move is related to new CBK regulations requiring individuals to reveal the source of any money flowing into their accounts.
He wants the court to declare the regulations unconstitutional for infringing on the customers’ right to privacy and property.
The lender cut ties with Mr Kobia on January 14, a month after notifying him of the move, saying the decision was made “following a review of our business”.
Investment services
In the letter, Barclays also stated that it has also ceased offering Mr Kobia investment services, prompting the court action.
Justice Okwany has asked the CBK to respond to Mr Kobia’s claims ahead of the mention of the suit on May 6. “The petitioner contends that it is not all economic and legal transactions are documented … the petitioner contends that the 1st respondent (CBK) has no legal and constitutional mandate to prevent him from accessing his genuine funds,” says Mr Kobia in court documents.
Barclays’ decision was made following the enforcement of the new CBK rules on disclosure of the source of money flowing into an account.
“Any funds received in your favour after the closure will be returned to the remitter. We cannot, however, guarantee that such funds will be resent to you by the remitter,” the bank states.
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