Stanbic Bank, DCI Reach Settlement Over Reversed $7.2 Million Air Afrik Transaction

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Stanbic Bank has reached a settlement with the Directorate of Criminal Investigations (DCI), effectively ending a long-standing probe into a $7.2 million transaction involving Air Afrik Aviation Ltd.

The agreement brings to a close a contentious legal standoff that had placed the bank and its executives under investigation for alleged fraudulent accounting practices.

The resolution, which was formally adopted by High Court Judge Bahati Mwamuye on April 7, requires the DCI to drop all criminal investigations into Stanbic Bank, its Chief Executive Officer Joshua Oigara, and other directors or employees.

As part of the agreement, Stanbic has also withdrawn its petition filed at the High Court in 2024, which had sought to block the DCI from proceeding with the probe.

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The dispute originated from a financial transaction dating back to February 2016. Stanbic Bank had received a credit advice note from the Bank of South Sudan (BoSS) indicating that $7.2 million (about Sh 930 million) had been credited to its clearing and settlement account, with the funds intended for Air Afrik.

Based on this advice, Stanbic credited the airline’s account, from which Air Afrik withdrew approximately $1.1 million (Sh 141 million).

However, it later emerged that BoSS had not actually transferred the funds. This prompted Stanbic to reverse the transaction and block further withdrawals from Air Afrik’s account, an action that triggered a prolonged financial and legal battle.

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Air Afrik claimed the bank’s move led to the collapse of a $20 million aircraft leasing deal with the South Sudanese government, resulting in significant losses for the airline.

The DCI’s Banking Fraud Investigations Unit (BFIU) subsequently launched an investigation into the matter, focusing on potential fraudulent and false accounting practices.

Stanbic, however, maintained that the probe amounted to abuse of office, arguing that the Central Bank of Kenya had already reviewed the case in 2016 and found no wrongdoing, recommending that the issue be handled through civil litigation.

In late 2024, the bank turned to the courts, arguing that the DCI’s actions were interfering with an ongoing civil suit. The High Court responded by issuing temporary orders in November 2024 that barred the DCI from summoning or interrogating bank officials.

Jefferson Wachira is a writer at Africa Digest News, specializing in banking and finance trends, and their impact on African economies.