Court Freezes KSh303 Million in Assets Linked to Equity Bank HeistCourt Freezes KSh303 Million in Assets Linked to Equity Bank Heist

The court capped the frozen bank assets at KSh303.2 million and ordered identifiable cryptocurrency holdings converted into ordinary currency within 10 days. The orders preserve assets while Equity pursues a recovery suit. They are not a final finding that the defendants committed fraud.

How the alleged transfers were made

The case concerns KSh1.49 billion that Equity says was moved from its salary-processing general ledger between November 2023 and June 2024. The bank alleges that a former salary-processing manager used authorised access to initiate transfers that were not genuine salary payments.

Business Daily's report on the court decision says the bank alleged that funds were routed through third-party accounts before some were converted into cryptocurrency. The judge referred to SWIFT messages identifying Equity as the sending institution and its general ledger as the source of the transfers.

The transactions were also linked to the manager's assigned computer and user ID, according to the report.

The freeze covers accounts at UBA, Absa, NCBA, Stanbic and Co-operative Bank. Cryptocurrency holdings linked to three defendants were also included, including assets held on Binance or other platforms.

The defendants dispute the allegations

The people and companies named in the case have challenged parts of Equity's account. One defendant said companies linked to him provided trade-finance, import and shipping services and that the payments were legitimate client transactions. He said the companies did not know the money allegedly originated from Equity.

Another defendant disputed the bank's account of cryptocurrency ownership and its calculations. A separate challenge questioned the use of confidential banking and personal information in the application for the freeze orders.

The judge declined to grant further tracing and accounting orders at this stage, saying that would risk assuming liability before the case had been heard. The court also made clear that a strong preliminary case did not mean Equity would automatically win at trial.

What happens to the money

The KSh303.2 million frozen in bank accounts is far below the KSh1.49 billion Equity says was diverted. That gap does not establish that the rest of the money has disappeared. It means the current orders preserve only the assets identified and covered by the court.

The court directed that identifiable cryptocurrency be converted into ordinary currency within 10 days. If the defendants do not comply, platform operators may be required to identify and convert the assets. The proceeds are to be placed in a Central Bank-licensed tier-one bank, with the Central Bank of Kenya appointed as escrow agent. The money is being preserved, not yet paid to Equity.

Why the case matters to banks and businesses

Equity processes salaries for corporate clients using employee details, salary amounts and funds supplied by employers. The alleged misuse of a salary-processing ledger raises questions about how banks monitor internal access, verify unusual transfers and separate the authority to initiate payments from the authority to approve them.

Equity's internal review also led to disciplinary action involving staff accounts and mobile-money transactions, Business Daily reported. The bank's case alleges that dozens of transfers were made using the former manager's credentials.

For companies that outsource payroll, the case is a reminder to reconcile salary batches, confirm unexpected changes and escalate unusual transfers quickly. For banks, it puts internal access controls and transaction monitoring under scrutiny.

The next major test is the full hearing of Equity's recovery suit. The defendants will be able to challenge the bank's evidence, while the lender must establish the alleged diversion and its links to the assets it wants to recover. Until then, the court order preserves a portion of the disputed funds without deciding who ultimately owns them.

The case also forms part of a wider discussion about digital financial security. Mwenendo has examined risks facing crypto users in its report on Binance's major outflows after a wallet breach.