Justice Gregory Mutai certified as urgent a constitutional petition filed by the bank and Muriuki against the Director of Public Prosecutions (DPP), the Directorate of Criminal Investigations (DCI) and other respondents.
Pending the hearing and determination of the application, the court restrained the DPP and DCI from arresting, charging or prosecuting the bank and its chief executive in connection with the investigations.
The orders came days after the Office of the Director of Public Prosecutions announced charges against the chief executives of three major Kenyan banks—Co-operative Bank, NCBA and KCB—over alleged failure to report suspicious transactions involving proceeds of crime.
The case centres on an alleged Sh363.4 million loss at First Assurance Investment Company. Prosecutors allege that the funds were fraudulently withdrawn between May 18, 2018 and April 30, 2024 through accounts held at the three banks.
According to the prosecution, a former nominated Member of the County Assembly and director of First Assurance Investment Company allegedly used his position and access to the company’s accounts to facilitate the transactions.
The former MCA faces 120 criminal charges, including conspiracy to defraud, stealing, making documents without authority and acquisition of proceeds of crime.
The DPP had directed that the three bank CEOs appear before the Milimani Chief Magistrate’s Court on August 11 to take plea in relation to the alleged failure to report suspicious transactions.
However, Co-operative Bank and Muriuki moved to the High Court, challenging their inclusion in the criminal proceedings.
In granting the interim orders, Justice Mutai barred the DPP and DCI from arresting, charging or prosecuting the bank and Muriuki in Milimani Criminal Case No. E451 of 2026, or in any other criminal proceedings arising from the investigations under challenge.
The court directed the petitioners to serve the respondents with the court documents within three working days, giving the respondents 14 days to file their responses.
The matter is scheduled to return to court on October 12, 2026, for compliance and further directions.
The High Court orders do not amount to an acquittal or a finding that the allegations are unfounded. They temporarily suspend the prosecution while the court considers the legal challenge brought by the bank and its CEO.
The case has attracted significant attention in Kenya’s banking and capital markets, given the involvement of three listed financial institutions and their top executives.
For Co-operative Bank, the court intervention provides temporary relief as the lender seeks to challenge the legal basis for prosecuting the bank and its chief executive over the First Assurance transactions.
The bank confirmed the development in a statement shared on its official social media platforms, saying it had obtained High Court orders stopping the prosecution of the institution and Muriuki in relation to the First Assurance Investment Company matter.
The legal battle is now expected to focus on whether the evidence and circumstances surrounding the alleged suspicious transactions provide sufficient grounds for prosecuting the bank and its chief executive under Kenya’s anti-money laundering laws.
