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ADVERTKenya’s banking sector is facing one of its biggest legal tests after the Office of the Director of Public Prosecutions (ODPP) approved criminal charges against the chief executives of three of the country’s largest commercial banks over their alleged failure to report suspicious transactions linked to a KSh363 million fraud scheme.
Those charged are KCB Group CEO Paul Russo, Co-operative Bank CEO Gideon Muriuki, and NCBA Group CEO John Gachora. The three banking chiefs are expected to appear before the Milimani Law Courts on August 11, 2026, to take plea.
The prosecution, however, is not accusing the executives of stealing the money. Instead, they are alleged to have failed to report suspicious financial transactions that moved through their respective institutions, contrary to the Proceeds of Crime and Anti-Money Laundering Act (POCAMLA).
The charges arise from investigations into the alleged theft of funds belonging to First Assurance Investment Ltd.
According to investigators, former company director Salim Mohamed Busaidy is accused of forging the signature of his co-director, Lamu Governor Issa Abdalla Issa Timamy, to authorize hundreds of fraudulent withdrawals between May 2018 and April 2024.
ADVERTProsecutors say Busaidy used forged company cheques ranging from KSh150,000 to KSh350,000, eventually siphoning more than KSh363 million from the firm’s accounts.
He has denied 120 criminal charges, including conspiracy to defraud, theft, forgery-related offences, and acquiring proceeds of crime. He was released on a KSh3 million cash bail or an alternative KSh10 million bond.
The case against the bank executives is separate from that facing Busaidy.
The ODPP alleges that the three CEOs failed to report suspicious transactions flowing through their banks as required under Section 5 read together with Section 44(2) of the anti-money laundering law.
Investigators claim approximately:
KSh136.3 million passed through accounts held at KCB.
KSh136.3 million also moved through Co-operative Bank.
KSh55.4 million was processed through NCBA Bank.
The prosecution argues that the transactions should have triggered mandatory reporting to the Financial Reporting Centre due to their suspicious nature.
The prosecution marks a significant change in Kenya’s fight against financial crime.
Historically, regulators—including the Central Bank of Kenya (CBK)—have largely imposed monetary penalties on banks for anti-money laundering failures while sparing senior executives from personal criminal liability.
This case signals a tougher enforcement regime where individual bank leaders may now be held personally accountable for compliance failures within their institutions.
Legal analysts say the outcome could reshape corporate governance and strengthen accountability across Kenya’s financial sector.
Kenya has previously sanctioned commercial banks over anti-money laundering breaches.
In 2018, CBK fined five lenders—including KCB, Co-operative Bank, Equity Bank, Diamond Trust Bank and Standard Chartered Kenya—a combined KSh392.5 million over failures to detect and report suspicious transactions linked to the National Youth Service (NYS) scandal.
In 2020, the same institutions were again fined KSh385 million after regulators found weaknesses in customer due diligence and anti-money laundering controls.
Unlike those earlier cases, the current prosecution targets individual chief executives rather than the institutions alone, potentially establishing a new legal benchmark for executive responsibility in Kenya’s banking industry.
The upcoming court proceedings are expected to be closely watched by regulators, investors, financial institutions and corporate governance experts.
If the prosecution succeeds, the case could redefine how banks implement anti-money laundering compliance, strengthen oversight of suspicious transactions, and reinforce personal accountability among senior executives responsible for safeguarding the integrity of Kenya’s financial system.
The case is widely viewed as a landmark moment in the country’s ongoing efforts to combat financial crime and protect the integrity of its banking sector.
