Why bitter microfinance fight has reopened Sh1.5bn Equity Bank heist

The Sh1.5 billion Equity Bank heist that shocked Kenya in 2024 has returned to the spotlight, this time through a series of bitter legal disputes involving businesswoman Ruth Muthoni Kamau, company ownership, multimillion-shilling properties and allegations of financial wrongdoing.

The fraud, which took place between May and July 2024, placed Ms Muthoni among the people investigated over one of the biggest bank theft cases in the country. Investigators accused her of receiving about Sh800 million of the stolen money through companies linked to her, personal bank accounts and cash transactions.

PAY ATTENTION: Follow Kenya Frontline WhatsApp channel for more news

Ms Muthoni was questioned by the Directorate of Criminal Investigations (DCI) and later released on Sh300,000 police bail. Another suspect, Geoffrey Kiragu, was released on Sh100,000 bail. Although the investigation appeared to fade from public view, a fresh dispute surrounding a microfinance company has once again brought Ms Muthoni and the earlier allegations into focus.

At the centre of the latest controversy is Fanikisha Microfinance, where majority shareholder Geoffrey Kariuki Gathimbu has accused Ms Muthoni and Joel Mwangi Wainaina of attempting to take control of the institution through what he describes as a proxy arrangement.

“Immediately thereafter, the first defendant (Mr Wainaina) completely absconded from all corporate assignments. He has never attended board meetings or presented himself to the company offices,” Mr Gathimbu says in court papers as per Nation.

According to documents filed at the High Court in Kiambu, Mr Wainaina initially expressed interest in acquiring a minority stake in Fanikisha. Mr Gathimbu says he subsequently allowed him into the company registry as a co-director with 49 per cent shares, retaining the remaining 51 per cent.

Sources within the DCI’s Banking Fraud Investigations Unit cited in the documents put the alleged investment at Sh478 million, although the court papers themselves do not state how much Mr Wainaina paid for the stake.

Mr Gathimbu later alleged that Mr Wainaina was acting on behalf of Ms Muthoni and had effectively facilitated her entry into the microfinance institution. He accused her of taking control of the company’s digital platforms and changing access to its servers without proper corporate approval.

“I recently discovered that the first defendant was not acting in good faith. He was acting as a fraudulent, un-appointed front and proxy for the second defendant, Ruth Muthoni Kamau.

“The second defendant has aggressively and illegally forced herself into the second plaintiff’s premises. She has hijacked our digital platforms and changed corporate server access tokens. She is currently operating illegally as a self-styled, de facto chief executive officer of the second plaintiff (Fanikisha Microfinance Bank),” Mr Gathimbu says in court papers.

Battle Over Fanikisha

The allegations have triggered a wider fight over the company’s bank accounts, directorship and ownership structure. Mr Gathimbu asked the court to freeze an NCBA account opened in Fanikisha’s name, arguing that the account could be used to move funds without the authority of the company’s legitimate leadership.

Justice Njoki Mwangi, however, declined to issue the freezing orders on August 12, noting that Mr Gathimbu had not provided evidence identifying the account signatories or current statements showing the funds held in the account.

The judge directed the respondents to file written submissions within 10 days and scheduled the matter for mention on October 7.

Fanikisha’s lawyers separately wrote to NCBA urging the bank to freeze funds held in the account. They warned the lender against accepting documents purporting to alter the company’s leadership or account mandates.

“Our clients, Geoffrey Kariuki Gathimbu and Geoffrey Mboo, have not resigned from their positions as the founding director, chief executive officer, or majority shareholder of the company.

“Any document asserting his resignation or authorising a change in signing mandates is a criminal forgery … Refuse to honour any withdrawal, debit, or electronic transfer requests initiated by the first defendant (Mr Wainaina) and second defendant (Ms Muthoni) or their proxies,” Fanikisha lawyers wrote to NCBA.

The dispute has since expanded beyond the microfinance institution. Mr Gathimbu claims the NCBA account was used to attract deposits from third parties, including Sh2.3 million from Edward Kipkoech Kogo.

Mr Kogo is separately engaged in a legal battle with Ms Muthoni over two luxury vehicles worth about Sh50 million. The vehicles include a 2022 Range Rover Vogue and a Toyota Lexus LX450D.

Kogo alleges that after the breakdown of his relationship with Ms Muthoni, attempts were made to transfer the vehicles into her name through forgery and manipulation of the National Transport and Safety Authority system. Ms Muthoni has not publicly accepted those allegations.

The property disputes extend to a luxury home in Runda valued at Sh90 million. Ms Muthoni and her father, Paul Kamau Karanja, are seeking to recover the property from Mr Kogo through a case at the Environment and Land Court.

The house, identified as Villa Unit No. 134 in Five Star Paradise Phase 3, has become another battleground between the parties.

Mr Kogo has questioned how Ms Muthoni’s father acquired the property, arguing that he lacked the financial means to purchase such an expensive asset.

“I have for the last four years known the first plaintiff as a respectable gentleman, a senior citizen with failing health, a man living purely on his pension after retiring as a humble primary school teacher over a decade ago and as such, he does not have resources to procure an asset,” Mr Kogo says in court papers.

Fresh Money-Laundering Claims

The Fanikisha dispute has also attracted the attention of two additional shareholders, Dr Paul Mucai Gitau and Ashu Kenya Limited, who have written to the DCI seeking investigations into alleged money laundering.

They claim Ms Muthoni and Mr Wainaina took over a shell company and changed its name to Fanikisha Access Capital Group Limited. Company records cited in the material show that the company was registered on September 30, 2022, with Mr Wainaina listed as a director and shareholder.

The new shareholders have raised questions about alleged cash payments, a Sh96 million mansion, a purported Sh60 million investment involving Ms Muthoni and Sonara Capital Limited, as well as several high-end vehicles.

The accusations have not been conclusively established in court, and Ms Muthoni and Mr Wainaina declined to comment on the latest claims involving Fanikisha.

The controversy has also revived questions surrounding the original Equity Bank investigation. Inspector Bonface Maina Kamau, who was involved in the probe, previously alleged that his transfer to Baragoi in October 2024 followed a complaint by Ms Muthoni.

He protested the transfer and claimed it could interfere with the investigation, naming senior DCI officers whom he accused of attempting to assist Ms Muthoni.

Ms Muthoni and Mr Kiragu have denied involvement in the Sh1.5 billion Equity Bank heist.

For now, the legal battles surrounding Fanikisha, the disputed properties and the ownership of high-value assets remain separate cases. Yet their connection to the woman once investigated over Kenya’s Sh1.5 billion bank heist has ensured that the old scandal has not disappeared.

Instead, more than two years after the alleged theft, the questions surrounding the money, the businesses and the people connected to the investigation are once again being tested in court.