Kakamega Deputy Governor Ayub Savula and Standard Chartered Bank are embroiled in a Sh1.8 billion legal dispute over the alleged leakage of his company's banking records to police investigators.
The dispute currently ongoing at the High Court in Milimani, Nairobi, also concerns freezing and closure of the company's, Sunday Publishers Limited, account.
Mr Savula and the company accuse the multinational lender of unlawfully freezing the account, shutting it down without notice and sharing account statements with the Directorate of Criminal Investigations during a Sh2.5 billion suspected fraud probe.
They claim that its publishing business, which allegedly handled hundreds of millions of shillings annually, was crippled following the freeze.
Pending determination of the dispute, the bank has lost its bid to block the hearing of the suit after the High Court dismissed its application for lack of merit.
Kakamega Deputy Governor Ayub Savula.
Photo credit: File | Nation Media Group
The ruling cleared the way for the commercial dispute to proceed to pre-trial and eventual hearing before the High Court.
Court documents show Sunday Publishers sued the lender, claiming the bank froze its account at the bank’s Kenyatta Avenue branch in Nairobi in December 2022 without notice.
This decision followed claims that the company was being investigated by the Directorate of Criminal Investigations (DCI) over an alleged fraud of Sh2.5 billion, which has since been dismissed by a lower court.
The company argues that the bank later unilaterally closed the account, cutting off its operations and disrupting payments from government agencies and corporate clients.
The publisher is demanding Sh1.8 billion in compensation as damages for alleged loss of business, reputational damage and breach of contract.
It also wants the court to declare that the bank breached Central Bank of Kenya consumer protection guidelines and breached bank-customer confidentiality rules.
The legal dispute stems from investigations by the Kenya Revenue Authority (KRA) and the Directorate of Criminal Investigations (DCI) into alleged tax irregularities of Sh472 million and Sh122 million Government Advertising Agency payments.
Sunday Publishers says the investigations triggered adverse publicity that led the bank to freeze the account.
In its pleadings, the company claims the bank declined requests to temporarily unfreeze the account to allow the processing of a Sh56 million payment from the Attorney-General’s office.
Mr Savula’s company accuses the lender of sharing bank statements with the DCI and the Office of the Director of Public Prosecutions without a court order.
The company argues that the disclosure violated contractual obligations, banking laws and constitutional protections on privacy and fair administrative action.
“The Defendant unlawfully and illegally furnished statements of account to the Directorate of Criminal Investigations and Director of Public Prosecutions in blatant breach of bank-customer confidentiality,” the suit states.
Kakamega Deputy Governor Ayub Savula.
Photo credit: File | Nation Media Group.
The company further claims the freeze paralysed its publishing and advertising operations, which it says had run for 15 years and served major State agencies.
The listed clients include the National Land Commission, the defunct NHIF, Kenya Power and the Ministry of Information, Communication and Technology.
According to the court papers, the account freeze disrupted business transactions conducted through the Integrated Financial Management Information System (IFMIS), locking out payments from the clients.
Sunday Publishers claims the fallout triggered massive financial losses and forced it to default on obligations to suppliers, landlords and creditors.
The company says it was also unable to service a Sh61.6 million loan owed to Co-operative Bank because of the frozen account.
It further claims negative publicity surrounding the investigations scared away clients and damaged the reputation of both the company and its directors.
“The plaintiff and its directors were subjected to sustained negative and distorted publications that depicted them as dishonest and unfit to carry out business,” the pleadings say.
It is also seeking aggravated damages, general damages for breach of contract, interest, and legal costs.
Mr Savula’s lawyers argue that the bank acted unfairly by freezing and closing the account without prior notice or an opportunity for the customer to respond.
“The defendant breached the Treating Customer Fairly (TCF) principles and subjected the plaintiff to unfair administrative action,” the pleadings state.
The dispute adds another legal twist to the long-running financial and criminal investigations involving the Kakamega politician and his publishing business.
Mr Savula, however, has consistently denied wrongdoing and challenged the tax claims and criminal accusations in court.
The commercial case is expected to proceed to pre-trial directions on September 21, 2026 before the court as the publisher seeks to hold the multinational bank liable for the alleged losses arising from the frozen account.
