Wealthy Kenyan banker Gideon Muriuki is charged with fraud, not just failing to report it

The charges Gideon Muriuki blocked at the High Court this month are broader than the failure-to-report offence that dominated coverage of the case.

Court reporting from the Milimani proceedings records that the counts against the chief executives of Co-operative Bank, KCB and NCBA include conspiracy to defraud First Assurance Investment and stealing, alongside the alleged failure to flag unusual transactions in the company's accounts. Paul Russo and KCB are charged with Salim Mohamed Busaidy over the theft of Sh136,329,745 from a First Assurance account.

254 News, a Kenyan online outlet, reported that the conspiracy counts against Muriuki and Co-operative Bank involve about Sh55.4 million. That figure has not appeared elsewhere.

The distinction matters. Failing to report a suspicious transaction is a regulatory offence under sections 44 and 5 of the Proceeds of Crime and Anti-Money Laundering Act, which requires banks to monitor complex or unusual activity and report suspicion to the Financial Reporting Centre within two days. Conspiracy to defraud and stealing are offences of a different order.

Justice Gregory Mutai stopped all of it on Aug. 7, issuing interim conservatory orders that restrained the Director of Public Prosecutions and the Directorate of Criminal Investigations from arresting, charging, presenting for plea or prosecuting Co-operative Bank and Muriuki. The orders stayed proceedings in Milimani Chief Magistrate's Court Criminal Case No. E451 of 2026, Republic versus Salim Mohammed Busaidy and six others. NCBA and Gachora obtained comparable protection.

The magistrate's court has been left working out what it can still do. When the case was called before Chief Magistrate Gethi Kibiru on the plea date of Aug. 11, defence lawyers told him the High Court had already barred the lower court from proceeding. Prosecutors said they had received only some of the orders and needed time to verify the rest. Kibiru gave the state until the following Wednesday to confirm service and authenticity.

The orders decide nothing about guilt. They suspend the prosecution while a constitutional petition is heard, and the High Court matter returns on Oct. 12, when respondents' replies are due.

The case originates with Busaidy, a former director of First Assurance Investment and a former nominated member of a county assembly. The Director of Public Prosecutions approved 120 counts against him, comprising three of conspiracy to defraud, two of stealing, 114 of making a document without authority and one of acquisition of proceeds of crime. Deputy Director of Public Prosecutions Nora Otieno and principal prosecution counsel Willy Momanyi allege the money was taken between May 18, 2018 and April 30, 2024.

Busaidy pleaded not guilty before Kibiru and was released on a Sh10 million bond with one surety of the same amount, or cash bail of Sh3 million. Court reporting describes the sum he is accused of stealing as close to a billion shillings, against the Sh363.3 million that prosecutors have said moved through the three banks.

Investigators allege he forged the signature of his co-director Issa Abdalla Issa Timamy, now governor of Lamu County, on company cheques to make withdrawals appear authorised. Funds moved through accounts at Co-operative Bank, NCBA and KCB.

Prosecutors have not previously pursued individual bank chief executives in this way. The Office of the Director of Public Prosecutions and the Central Bank of Kenya have historically fined institutions for anti-money-laundering failures, and the central bank penalised five lenders a combined Sh392.5 million in 2018 over the National Youth Service case. Kenya has been on the Financial Action Task Force grey list since February 2024.

Muriuki faces a second challenge alongside the criminal matter. Francis Awino, an activist, went to the High Court four days after the conservatory orders were issued, asking it to stop Muriuki exercising the powers and functions of chief executive while a constitutional petition on his continued tenure is heard. Awino does not allege guilt and expressly acknowledges the presumption of innocence under Article 50(2)(a) of the constitution.

Muriuki has run Co-operative Bank since 2001, when he took over a lender that had lost Sh2.3 billion the previous year. He is also its largest individual shareholder, holding 135 million shares, or 2.3 percent. The bank reported half-year net profit of Sh18.02 billion last week, up 28 percent.