Kiru Tea Factory Company Limited has asked the High Court to allow it to join a constitutional petition by Citibank Kenya, which seeks to stop police investigation into the approval and disbursement of a $2.02 million (Sh261 million) loan.

The farmers-owned company, which is managed by the Kenya Tea Development Agency (KTDA), says it was excluded from the bank’s court proceedings that halted the Directorate of Criminal Investigations (DCI) probe into the loan facility.

In its application to join, the company says having lodged the complaint that triggered the DCI investigation, it should be heard before the court determines whether the probe can proceed.

Citibank moved to court in June this year, maintaining that the DCI was unlawfully criminalising a commercial lending decision involving the loan advanced to the Murang'a tea factory.

Citibank, N.A. Kenya is a branch of Citibank, N.A., a federally chartered National Banking Association, organised and existing under the laws of the United States of America.

The bank said the DCI summons contained "vague, unparticularised allegations" and sought to investigate an alleged offence of "negligently accepting a credit application", which it argued is unknown to the criminal law.

Read: Citibank seeks to block DCI probe of Kenya CEO

But Kiru factory, in its court papers, says the interim orders issued on June 15 directly affected its complaint, yet it was neither named as a party nor allowed to respond before the court temporarily stopped the investigation.

“The petitioner deliberately excluded Kiru Tea Factory Company (KTFC) from the proceedings and obtained orders it ought to have known would affect the rights of KTFC. The Board of Directors of the applicant (Kiru) never authorised, applied for, or approved the loan of $2,020,000 (Sh261.38 million) from Citibank N.A.,” says the deponent of an affidavit field by Kiru.

According to KTDA's official records, Kiru Tea Factory was commissioned in 1993 and serves more than 8,000 smallholder tea farmers through 52 buying centres in Murang'a County.

The factory says those growers have a direct interest in the outcome of the bank’s petition because they ultimately repaid the disputed loan.

Kiru asks the court to join it as an interested party and permit it to respond to Citibank's petition.

Kiru’s advocate argues the case seeks to halt investigations arising from the company’s own complaint and therefore directly affects its constitutional rights.

The factory says it reported the matter to the DCI after commissioning audits and reviewing documents relating to the loan.

Kiru’s directors say investigators were examining allegations that the facility was obtained without lawful authority and that the proceeds did not benefit the company. Those allegations have not been determined by the court.

Kiru says the investigation goes beyond recovery of a commercial debt. It argues police are examining how the facility was procured, whether corporate documents used to secure it were authorised and who ultimately benefited from the money. The company says it wants investigators allowed to complete that work.

Citibank, however, presents a different account in its constitutional petition. The bank says the DCI is investigating its CEO in Kenya, over the approval and disbursement of the loan, effectively criminalizing an ordinary banking transaction.

It argues the alleged offence of "negligently accepting a credit application" is unknown to criminal law and that the summons violates constitutional protections.

Earlier court filings show the DCI obtained magistrate's court warrants seeking Citibank account-opening records, statements, RTGS instructions and other banking documents linked to the disputed facility.

Kiru argues it has an identifiable legal and constitutional interest because the petition seeks to stop investigations arising from its complaint.

"KTFC's cause is at the heart of the dispute, and its interest sought to be defeated by the petition is not peripheral," a director of Kiru said in the affidavit. "KTFC is best placed to articulate its interest."

The petition is scheduled to be called in court on September 17.

→ jwangui@ke.nationmedia.com

Follow our WhatsApp channel for the latest business and markets updates