Companies
Citibank to make disclosure over Safaricom cash call funds
Wednesday January 31 2024
A man walks by a Citibank branch at the US bank Citigroup world headquarters on Park Avenue, in New York. FILE PHOTO | AFP
The High Court has allowed stock brokerage firm Suntra Investments Limited to enforce a decision requiring Citibank to provide information relating to a customer over the botched purchase of Safaricom shares in its initial public offering (IPO) in 2008.
High Court judge Mugure Thande ruled that Suntra should go ahead and demand the information relating to a customer—Ruparelia Sudhir— as directed by the Commission on Administrative Justice on January 24, 2022.
Suntra claims that it sought information and documents from Citibank relating to Sudhir who paid Sh116.5 million but was allegedly never allocated any shares.
The brokerage firm said after failing to get the information and documentation, it moved to the CAJ under the Access to Information Act.
Justice Thande said the orders given by CAJ were not in vain and are enforceable as orders of the court on application. “Where an order by CAJ has not been appealed against, a party in whose favour the order is made may apply ex-parte for leave to enforce such order as a decree. The law further provides that such order may then be executed just like any order of this court,” the judge said.
Suntra submitted that in 2008, the government offered for sale its 10 billion shares in Safaricom, by way of IPO. The firm participated in the IPO as an authorised selling agent while Citibank was the lead receiving bank on behalf of the government.
The brokerage firm accuses Citibank of failing to supply it with a complete statement of accounts relating to all its transactions showing debits for batch values and credits for payments received, images of 90 specific application forms which could not be traced.
Citibank had opposed the application stating that the CAJ had no powers to grant such orders.
An affidavit filed in court on June 20, 2022, by Citibank’s cash product manager Edmond Obundo Okullo said the lender carried out a reconciliation of applications and payments in respect of the transaction with Suntra and obtained a discharge by Suntra way back on August 29, 2008.
It was not until May 9, 2019, that Suntra re-opened the issue. He then gave a history of the correspondence between Citibank and Suntra over the matter.
He said Suntra made an application to CAJ for review of the bank’s response of December 19, 2019, which Citibank says was incurably defective. Citibank further alleges a violation of its right to a fair hearing as CAJ engaged in covert correspondence with Suntra without involving it.
The judge, however, wondered why Citibank did not appeal against CAJ’s decision only to raise the matter of lack of jurisdiction when Suntra sought to enforce the order.
“Flowing from the cited authorities, it is evident that Citibank cannot now challenge the validity of the decision of CAJ, having failed to follow the procedure of appeal provided in the ATIA,” said the judge.
