Court orders auction of Ecobank assets to pay Koinange family Sh840m over illegal withdrawals
Judge says that Ecobank treated the Mbiyu Koinange estate bank account casually and negligently by allowing withdrawals contrary to a court order issued in 2011 that had stopped the disbursement of the funds.
The family of former Cabinet Minister Mbiyu Koinange has received court approval to auction the property of Ecobank Kenya Limited to recover a Sh840.6 million debt, arising from illegal withdrawal of money from his estate’s account nearly 15 years ago by some of the persons involved in the succession case.
According to court documents, the amount includes Sh284 million principal amount, which was withdrawn from the account in 2011, and Sh556.6 million in accrued interest.
The decision marks the latest chapter in a four-decade legal battle over Koinange's Sh14 billion estate, with the court ordering Moran Auctioneers to attach bank property to settle the debt.
A “warrant of sale of property in execution of decree for money” was on Friday issued by the High Court in Milimani, family division deputy registrar, directing the auctioneer to attach the bank.
The auctioneer was also directed to return the warrant to court on November 18, 2025 with an endorsement certifying the manner in which it has been executed or why it has not been executed.
The warrant, issued under Succession Cause No.527 of 1981, came after the bank failed to comply with a June 26, 2025 ruling by Justice Eric Ogolla directing the financial institution to refund Sh284 million plus interest to the estate.
Justice Ogolla found the bank guilty of “wilful negligence” for allowing unauthorised withdrawals from the protected estate account despite a standing court order.
The judge said the bank treated the account casually and negligently by allowing the withdrawals contrary to a court order issued in 2011 stopping the disbursement of the amount.
“There was an express order from the court that the monies held at the bank should not be released without prior authorisation from the court,” said Justice Ogolla in the ruling that sets a precedent for stricter oversight of estate accounts.
“The onus of ensuring that the bank account is managed accordingly lies with the bank to whom a higher threshold of care is expected,” he added.
Stating that the bank owed the beneficiaries of the Koinange estate duty of care, the court said the financial institution was liable and accountable for the loss of the money.
According to the court, this was a case of “wilful negligence” and that the bank’s defence that they were not aware of the court order “reeks of negligence of duty to its customer”. He noted that the bank was obligated to make inquiries before making out any payments.
The money was part of the Sh1.1 billion proceeds from the sale of Koinange’s land known as “Close Burn Estate Runda” in 2010. Court papers show that the signatories to the account were advocates and the mandate of the account was for all the signatories to sign jointly.
Koinange’s widow Eddah Wanjiru, who is one of the administrators of the estate, while urging court to order for refund of the money, said the amount was held in the estate’s account pursuant to a court order dated July 26, 2011.
Through lawyer Paul Muite, a Senior Counsel, the widow said the money was to be later shared out equally amongst the beneficiaries of the estate.
However, Mr Muite said Ecobank allowed the sum to be withdrawn without a court order and used to cater advocates’ payments.
Lawyer Muite stated that the account in question was a trust account opened by the estate's administrators through a court order and that Ecobank needed a court’s approval to release the money.
He argued that the bank's attempt to demonstrate that the payments had been made to lawyers was invalid, since the bank was only authorised to release the money by court order. He added that it was the bank's responsibility to pursue those to whom it believed the money had been paid.
Justice Ogolla agreed and said since the lost amount of money was colossal, the same could not be moved, transferred or disposed of without attracting attention of the responsible managers of the bank.
“This court has noted with disturbing concern, the negligent manner in which Ecobank treated the estate's account. The estate of a deceased person is a special estate protected by the law and administered by the court through appointed administrators. Where an account is opened in a bank in the name of the estate, the bank must take constructive knowledge of the special category of the customer,” said the judge.
While finding the bank liable, the judge said that apart from the fact that the financial institution knew it was dealing with a deceased person’s estate, there was an express order stopping the release of the money.
“Therefore, the casual manner in which the Ecobank treated the said account and disbursed the money could only have been done by way of wilful negligence, if not wilful fraud. It is the finding of this court, and I so hold, that Ecobank owed a duty of care to the estate, and that it stood in a fiduciary relationship to the estate and must therefore be held fully accountable to the estate and its beneficiaries,” said the judge.
Koinange died on September 3, 1981 without a Will and the matter was filed in court the same year he died.
It was not until May 2020 that Justice Aggrey Muchelule (now Court of Appeal judge) made a significant step in sharing the estate estimated to be worth Sh14 billion.
Koinange served in Mzee Jomo Kenyatta's cabinet and briefly in President Daniel Moi's administration. He was polygamous and wealthy man. The estate he left has been the subject of litigation by members of his family since his death.
The succession dispute has been one of the longest running in the judiciary, and a reference point whenever delay in the administration of justice is discussed.
The estate had initially been distributed in 2015 but Justice William Musyoka left out two widows—Ms Wanjiru and Ms Margaret Njeri Mbiyu—who promptly filed an appeal and successfully petitioned to be included in the distribution.
The Koinange family revolves around four widows: Loise Njeri Mbiyu (dead), who had five beneficiaries; Ruth Damaris Wambui Mbiyu with five beneficiaries; Margaret Njeri Mbiyu with one beneficiary and Eddah Wanjiru with one beneficiary.
