IN THE MATTER OF ARTICLE 20(1) (2) (3) & (4) OF THE CONSTITUTION 2010
IN THE MATTER OF ARTICLE 21(1) OF THE CONSTITUTION 2010
IN THE MATTER OF ARTICLE 22(1) 3 OF THE CONSTITUTION 2010
IN THE MATTER OF ARTCLE 23(1) 3 OF THE CONSITUTION 2010
IN THE MATTER OF THE ALLEGED CONTRAVENTION OF ARTICLE 46(1) a, b, c& d (3) OF THE CONSTITUTION 2010
IN THE MATTER OF ARTICLE 165(3) (b) OF THE CONSTITUTION 2010
IN THE MATTER OF ARTICLE 231 OF THE CONSTITUTION 2010
IN THE MATTER OF THE CONSTITUTION OF KENYA (SUPERVISORY JURISDICTION AND PROTECTION OF FUNDAMENTAL RIGHTS AND FREEDOMS OF THE INDIVIDUAL, HIGH COURT PRACTICE AND PROCEDURE RULES, 2006
IN THE MATTER OF TRANSITIONAL AND CONSEQUENTIAL PROVISIONS-SIXTH SCHEDULE PART 5 RULE 19
IN THE MATTER OF THE LEGAL NOTICE NO. 97 OF 2008 THE BANKING (CREDIT REFERENCE BUREAU REGULATIONS 2008)
IN THE MATTER OF SECTION 31(3) &4 AND SECTION 55 OF THE BANKING ACT CAP 488
HON.KENNEDY ODHIAMBO NYAGUDI…………………….PETITIONER AND
THE CENTRAL BANK OF KENYA…………………………….FIRST RESPONDENT
CREDIT REFERENCE BUREAU AFRICA LIMITED………..SECOND RESPONDENT
KENYA COMMERCIAL BANK LIMITED…………………….THIRD RESPONDENT
BARCLAYS BANK OF KENYA LIMITED……………………...FOURTH RESPONDENT
THAT I, HON.KENNEDY ODHIAMBO NYAGUDI of Care of P.O.Box 4988-00506 ,Nairobi do hereby make oath and state as follows:-
THAT: I am an adult of sound mind residing and working for gain in Nairobi in the Republic of Kenya and the Petitioner herein and therefore competent to swear this affidavit.
THAT: I am the immediate former Member of Parliament for Kisumu Town West Constituency and therefore a public figure.
THAT: I held and operated a bank account number 0361005732 With Barclays Bank of Kenya Ltd, (hereinafter referred to as BBK).
THAT: I held and operated a visa card number 4047 0950 0375 7009 under Barclays Bank account number 100100015286.
THAT: I am a customer of Kenya Commercial Bank Ltd (hereinafter referred to as KCB), Milimani Branch , NSSF Building where I hold account number 11100982723
THAT: I also have a loan account at KCB , Salama House Branch, Mortgage Center account number MG0933700126
THAT: on the 3rd December 2009, having successfully applied for a loan, KCB advanced to me a loan of Ksh 5,000,000 secured with my collateral KISUMU MUNICIPALITY BLOCK 11/201 valued at Ksh 22,000,000 at that time (2009).
THAT: The loan was supposed to be paid by monthly installments for a period of 10 years.
THAT: I made several payments to KCB in respect to the loan.
THAT: On the 28th of February 2011(after 13months), I made a lump sum payment of Ksh 4,613,582.35 which reduced the balance on the loan to Ksh 211,386.55 as reflected on the statement marked “KON 1”.
THAT: I further deposited the balance in my separate account held at KCB Salama House Mortgage Center number 801692 whereby the monthly repayments would be deducted and transferred directly to the loan account until full repayment is done.
THAT: I was able to basically “clear” the loan in 13 months instead of the 10 years that had been granted.
THAT: At that time I was not aware nor had I been informed by KCB in any way whatsoever that KCB had forwarded my confidential financial information to Credit Africa Bureau Africa Ltd(hereinafter referred to as CRB )
THAT: KCB Mortgage center has continued to deduct funds from one account to service the loan account consistently without any default whatsoever from the time I deposited the lump sum amount of Ksh 4,613, 582.35.
THAT: Around the month of August 2011, considering that I had satisfactorily serviced my loan account, I applied for a further loan of Ksh 4,500,000 through KCB, Salama House, Mortgage Center.
THAT: At no time did Ms Judy HouhWaiyua an officer at the KCB, Salama House Mortgage Center inform me that KCB had submitted my name and other financial details to CRB Africa Ltd.
THAT: During my informal discussion with Judy Waiyua, she advised me to contact Barclays Bank Ltd to make the necessary payments and further get clearance letters accordingly.
THAT: In compliance with the advice I proceeded to make payments of Ksh 204,000 to Barclays Bank Ltd. As advised Barclays Bank issued a clearance letter dated 15th August 2011. The letter is attached and marked “KON 2”.
THAT: I further paid Barclays Bank a sum of Ksh 77,512.00 to which they issued a clearance letter dated 24th August 2011. This clearance letter is hereby attached and marked “KON 3”.
THAT: Having received both clearance letters from Barclays Bank. I proceeded to present the same to KCB, Salama House, Mortgage Center and requested for a further consideration of my loan application.
THAT: Towards the end of August 2011, the same officer from KCB, Salama House, Mortgage Center Ms. Judy Waiyua called me for the second time informing me “on phone” that the application for my loan of Ksh 4,500,000 had been still rejected and declined despite having cleared all and/or any outstanding balance(s) which may have been owing to Barclays Bank Ltd for which Barclays Bank Ltd submitted my information to CRB Africa Ltd.
THAT: On the 2nd of September 2011, I wrote an official letter to the Manager, KCB Salama House, Mortgage Center informing him directly that I had been “informally” informed that my loan application for Ksh 4,500,000 had been rejected and declined as a result of a CRB report on myself. The said letter to the Manager is hereby attached and marked “KON 4”.
THAT: In the letter “KON 4”, I explained “in vain the circumstances that produced the outstanding amounts owed then to Barclays Bank Ltd.
THAT: In the letter “KON 4” I further pleaded (in vain) for the management of KCB to consider my personal relationship with them, having introduced to them various customers who had deposited with them millions of shillings and not to mention my accounts which on their own had transacted several millions of shillings.
THAT: Even as I was writing the letter “KON 4” I was not aware that KCB had submitted my information to CRB Africa Ltd.
THAT: To date, in May 2012, I have not received any formal acknowledgement and/or reply to my letter dated 2nd September 2011.
THAT: During the month of November 2011, I received a Letter of Offer, from one Mr. Kevin England based in San Diego, California, USA to purchase the house I was building in Karen for a sum of Ksh 98,000,000. The said letter of offer and a copy of Mr. England’s passport are hereby attached and marked “KON 5” and “KON 6” respectively.
THAT: The sale was subject to my completion of all the remaining works and acquiring a completion certificate from the relevant authorities among other conditions.
THAT: I engaged the services of a Quantity Surveyor, Songa Ogoda and Associates to advice on the amount required to complete the remaining work. The surveyor provided a Bill of Quantities of Ksh 4,831,744. A copy of the said letter of the Bill of Quantities hereby attached and marked “KON 6”.
THAT: During the month of February 2012, I made the application for a loan of Ksh 5,000,000 having engaged the services of a quantity surveyor who provided a Bill of Quantities for the completion of the house I was constructing in Karen, Nairobi on LR No. 10118/8 which I had been granted the initial loan of Ksh 5,000,000 in December 2009 in the first place.
THAT: Having applied for the loan, I waited for further communication from KCB, Salama House branch to which I was surprised to be “informally” informed (for the second time) that even my second application had been declined and rejected based on the adverse negative report obtained from CRB Africa Ltd.
THAT: When I received the “informal” communication that my loan application had been declined due to the CRB Report, I personally called the Managing Director of KCB, Mortgage Center a Mr. Joram Kireri, and requested for his personal intervention on the matter.
THAT: Mr. Joram Kireri the Managing Director of KCB, Mortgage Center assured me that he would look into the matter and as such requested the Manager Mr. Titus Muchai to re-introduce the application, which to my information and understanding , was done.
THAT: On several occasions, I called both Mr. Joram Kireri and Mr. Titus Muchai (the Manager of KCB Mortgage Center at Salama House) to know the fate of my application but both declined to take my calls or even call back with any information.
THAT: On one occasion during my numerous attempts to speak to Mr. Joram Kireri, I managed to talk to him and requested that incase KCB declined and/or rejected my loan application, the decision should be communicated to me officially and in writing. To date, I have not received an official communication for the decline/rejection of my loan applications.
THAT: Around 2nd February 2012, I personally made a visit to KCB, Salama House Mortgage Center after numerous and countless calls to the Managing Director, Mr Kireri and the Manager, Mr Muchai, all in vain just for information on the status of my application.
THAT: I was referred to the same officer Judy Waiyua who shocked me that my loan application had been rejected for the third time.
THAT: I asked for the reason why the application had been declined and to my surprise I was “informally” informed that the same was rejected due to adverse negative reports produced for KCB (as requested) by CRB Africa Ltd.
THAT: This adverse decision has made me fail in my contractual obligation in the sale of the property in Karen LR/No 10118/8 in which I had committed to completing the remaining work of the construction before handing over the property to the potential buyer.
THAT: I have suffered a financial loss in the cancelation of the sale agreement valued at Ksh 98,000,000 due to the adverse decision made by KCB based on the false, inaccurate, malicious and incorrect information provided by CRB Africa Ltd.
THAT: Having been informally informed of the decline/rejection of my loan application, I therefore requested for “an official” communication from KCB Salama House Mortgage Center stating the balance owed in the loan account I was servicing in order for me to make my final payment and discharge my title deed which is still held by the KCB to date.
THAT: I know of my own knowledge that KCB had requested for a credit report on myself on the 8th August 2011 which CRB proceeded to provide KCB as requested. The said report dated 8th August 2011 printed at 02:45pm hereby attached and marked “KON 7”.
THAT: I know of my own knowledge that KCB further requested for a credit report on myself (a second time) on the 8thMarch 2012 which CRB Africa proceeded to provide KCB as printed on the 8th of March 2012 at 08:52am. This report is hereby attached and marked “KON 8”.
THAT: Both Credit Reports requested by KCB and provided by CRB Africa Ltd, indicate that I have a loan balance of Ksh 5,008,735.55 which is very false, inaccurate, incorrect and malicious which can only serve in propagating rumors, slander, defamation and character assassination.
THAT: On the 11th April 2012, I requested CRB Africa Ltd for my “individual credit Report”. The letter of request hereby attached and marked “KON 9” which was duly received by CRB Africa Ltd.
THAT: CRB Africa Ltd generated and printed my Credit Report on the same day at 03:27pm hereby marked “KON 10” which was discovered to have several inaccuracies, incorrect and false entries.
THAT: Despite several follow-up calls for the letter showing the balance from KCB, I only managed to get the letter on the 12thof April 2012 (several days later) which stated that the outstanding balance on the loan account “at the close of business on the 11th of April 2012, was Ksh 29,795.62” showing a great difference from all the reports from CRB Africa Ltd, which indicate the balance as Ksh 5,008,735.55.The said letter is hereby attached and marked “KON 11”.
THAT: I know from the Credit Reports attached herewith, that CRB Africa Ltd is holding and circulating when requested, inaccurate, false, incorrect and malicious information about me even reporting that the balance of the loan account MG0933700126 as Ksh 5,008,735.55, whereas, from the bank statement,” KON 1” and by KCB’s own admission through the letter “KON 11”, the correct balance on the same day was Ksh 29,795.62.
THAT: From the CRB report dated 11th April 2012 and also marked “KON 10”, the value of the collateral is listed as Ksh 15,000,000 arising from a valuation report dated 18th August 2009. On the contrary, the valuation of the property from the said valuation report undertaken by Crystal Valuers Limited is Ksh 22,000,000. A copy of the letter from the valuation company addressed to KCB to the Attention of Judy Waiyua and a copy of the valuation report herein attached and marked “KON 12” and “KON 13” respectively.
THAT: Even after getting clearance letters from Barclays Bank of Kenya Ltd, CRB Africa Ltd has continued to indicate in their reports that I still owe Barclays Bank various amounts e.g Ksh 0.05 as indicated in the Credit Report dated 11th April 2012 and also marked “KON10”. This does not reflect the existing current situation.
THAT: The CRB reports list the payment status of the accounts as “NO PAYMENT” purporting that I have not made any payment yet there is overwhelming evidence that I have made and I continue to make several monthly payments to KCB and I had even completed paying off BBK whereby they issued clearance letters to this effect.
THAT: I know from the credit reports that CRB Africa Ltd continue to and has continued to display, circulate, share, exchange and even distribute information about me (whenever requested) that have always been inaccurate, incorrect, false, misleading and even malicious with intentions which are only known to themselves.
THAT: I know of my own knowledge that both KCB and BBK have a legal duty and responsibility to ENSURE that the information that they submit to CRB must be accurate and must be updated on a monthly basis and must reflect the existing current situation at any given time. This has not been done.
THAT: I know of my own knowledge that CRB Africa Ltd has a duty and legal responsibility among others to implement strict quality control procedures in order to ensure maximum possible accuracy and take all such steps necessary to ensure that “the information that it maintains is (i) current, (ii) authentic, (iii) legitimate, (iv) reliable, (v) accurate, (vi) truthful and (vii) that it reflects the existing situation of the subject at any given time.” This responsibility and legal duty was grossly violated by CRB Africa Ltd.
THAT: I know of my own knowledge that the Central Bank of Kenya has a legal duty and responsibility to license, regulate, supervise, inspect the adequacy of CRB Africa’s management system, and among others revoke the license of Credit Reference Bureaus. CBK has failed to execute its legal duty and responsibility.
THAT: I know of my own knowledge that KCB on several occasions, having requested twice for my credit report and having received my letter, had been made aware that the information held by CRB Africa Ltd was in accurate, incorrect and illegitimate yet KCB deliberately failed to issue an “amendment notice” to CRB Africa Ltd to correct the information.
THAT: I know of my own knowledge that upon the decline of my loan applications on all the three occasions, KCB should have issued to me “an adverse action notice” clearly stating that the decision to decline/reject my loan application had been reached as a result of the information received from CRB Africa. This has not been done to date despite the three declines to my applications.
THAT: I know of my own knowledge that the CRB Africa Ltd management system software is defective, inaccurate, and has failed to store correct information even failing to execute basic operations such as detecting that one account had been listed twice.
THAT: In all the reports from CRB Africa Ltd, the date when I “made” the last payment on the loan account is displayed as 23rd November 2019. This is not possible in any way or form whatsoever.
THAT: In the report dated 11th April 2012, requested by myself and marked “KON 9”, on account number 0361005732, the date of the last payment is listed as 29th of February 2012. A letter of clearance from BBK on the same account (marked “KON 3”) had been issued on the 24th of August 2011 stating that “all outstanding debt had been cleared”. There was no reason whatsoever to make any other payment and as such no payment was made by myself or by any other person on my behalf on the purported date of 29th of February 2012.
THAT: In all the reports provided by CRB Africa Ltd, on the loan account MG0933700126, the “Payment Status” is listed as “NO PAYMENT”. This is extremely false, inaccurate, incorrect and malicious since there have been several monthly payments from the time the loan was granted including a payment of Ksh 4,613,582.35 on the 23rd of February 2011, other several payments on various dates, and the latest at the time the bank statement was printed, a payment of Ksh 4,329.70 on the 23rd of March 2012 as evidenced from the bank statement marked “KON 1”.
THAT: In all the reports provided by CRB Africa Ltd, on the account referred to as Credit Card, 100100015286, the date of last payment is listed as the 26th of October 2010. A letter of acknowledgement of a sum of Ksh 204,000 and also clearing any outstanding amount was issued on the 15th of August 2011 which CRB Africa Ltd failed to notice and record.
THAT: I know of my own knowledge that CRB Africa Ltd had listed the number of delinquencies under my credit information as 4. This has since been somehow changed to read 3, a fact that the operating system is ineffective and/or defective and as such has been giving false and misleading information.
THAT: I know of my own knowledge that both KCB and BBK have failed to update the information held by CRB Africa Ltd on a monthly basis and on an on-going basis as required by the regulations.
THAT: I know of my own knowledge that CRB Africa Ltd failed to furnish me with a free Credit Report at least once a year and also within 30 days of receiving an adverse action notice issued by both KCB and/or BBK.
THAT: I know of my own knowledge that CBK has failed in its duty and legal responsibility in licensing CRB Africa Ltd while CRB Africa Ltd has failed to demonstrate that it has a proper functioning management system and software which is capable of accurately storing and updating customer information and to reflect the correct situation of the subject at any given time.
THAT: I am afraid that KCB, BBK and CRB Africa Ltd may have circulated or may circulate in the future false information about me to several other institutions without my knowledge and/or consent.
THAT: I made a loan enquiry around the end of April 2012 to Family Bank Ltd, Kisumu Branch with a view of securing a loan with the bank. The manager, a Mr. Joseph Okal informed me that I would not be considered for any loan as long as my name is still in the CRB records.
THAT: I made a similar loan enquiry to Eco Bank, situated at Kenyatta Avenue, and the manager, Mr. George Munga Amollo advised me that it would not be easy to secure any loan with them as long as my name still featured in the CRB records.
THAT: I know of my own knowledge that the information shared by CRB Africa Ltd has and will continue to adversely affect my constitutional rights and freedoms and those of other Kenyans.
THAT: I know of my own knowledge that The Banking (Credit Reference Bureaus) Regulations 2008 conflicts with and violates the Constitution of Kenya.
THAT: I know of my own knowledge that “The Banking (Exchange of Information) Regulations 2007 was repealed.
THAT: I know of my own knowledge that the information held by CRB Africa Ltd will be held in their records and may be circulated and/or exchanged with other institutions which may (as has already happened) negatively and adversely affect my rights and freedoms for a draconian period of 7 years.
THAT: I know of my own knowledge that there are several Kenyans who are suffering as a result of this unfair regulation introduced by the former Minister for Finance, Hon Amos Kimunya and the CBK without involving the National Assembly of Kenya.
THAT: I know of my own knowledge that several Kenyans have been adversely affected by this regulation and that many more have been denied access to credit as a result of the information shared and/or exchanged by CRB and financial Institutions.
THAT: I know of my own knowledge that The Banking (Credit Reference Bureaus) Regulations 2008 is unfriendly to customers since it does not in any way whatsoever prescribe any form of remedy to a customer that has been adversely affected by the regulations.
THAT: I know of my own knowledge that the information held by the CRBs may be accessed both locally and internationally and therefore may adversely affect the reputations and dignity of Kenyans with intentions of having international engagements.
By the said }
Hon. Kennedy Odhiambo Nyagudi } _________________________
This day of 2012 } DEPONENT
Before me Commissioner for Oaths
Former Finance Minister Mr Amos Kimunya subsidiary legislation that is giving nightmares to banking consumers - Is the Banking (Credit Reference Bureau) Regulations, 2008 - http://www.cofek.co.ke/Kenya%20Banking%20Credit%20Reference%20bureau%20Regulations,2008.pdf