Home News KCB Embroiled In Money-Heist Scandal That Triggered Diplomatic Row Between Kenya, DRC

KCB Embroiled In Money-Heist Scandal That Triggered Diplomatic Row Between Kenya, DRC

The bank is on the crosshairs for being linked to money laundering, despite government's efforts to escape the grey-list

by Dave
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The Kenya Commercial Bank, KCB, is embroiled in a secretive cargo shipment involving $8 million in old banknotes that sparked a diplomatic dispute between Kenya and the Democratic Republic of Congo (DRC), revealing underlying issues of money laundering and financial regulation.

On April 19, DRC military intelligence detained two Kenya Airways staff over missing customs documents for the cargo, leading to a swift suspension of Kenya Airways flights to the DRC. In retaliation, Kinshasa refused to accept the credentials of Kenya’s new ambassador, straining bilateral relations.

KCB

A Kenya Airways flight

The details of the cargo, initially undisclosed, were revealed on May 16 by Kenya’s Foreign Affairs Minister, Musalia Mudavadi. The shipment consisted of decommissioned currency from Trust Merchant Bank (TMB), a subsidiary of Kenya’s KCB Group, destined for the United States for destruction and replacement.

Mudavadi emphasized that the shipment was legitimate, approved by the DRC Central Bank, and part of standard banking practices.

Trust Merchant Bank in DRC, with approval from the DRC Central Bank, was sending old currency to the Federal Reserve Bank of the US for destruction and replacement,” Mudavadi explained, dismissing DRC’s allegations of money laundering.

This incident brings to light Kenya’s ongoing efforts to enhance its financial regulations and remove itself from the Financial Action Task Force (FATF) grey list, which highlights countries with deficiencies in combating money laundering. The case underscores the critical vulnerabilities within banking systems that can be exploited for illicit financial activities.

The detention of the airline employees, one Kenyan and one Congolese, and their subsequent release on May 6 following Mudavadi’s diplomatic intervention, underscore the complexity of international financial operations and the necessity for stringent oversight.

Pres William Ruto at JKIA

Pres William Ruto at JKIA

With flights now resumed, Kenya Airways aims to restore its profitable routes to the DRC, while Kenya continues to strengthen its financial safeguards to prevent money laundering and ensure compliance with global standards.

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