In a move to comply with the new regulations requiring individuals to reveal the source of any money flowing into their accounts, Barclays Bank has closed accounts of controversial businessman Paul Kobia after failing to comply.
In November 2011, Kobia was named in a UN report as a key suspect involved in the illegal smuggling of gold from Democratic Republic of Congo. In 2011, DRC President Joseph Kabila alleged Kobia was one of the people who stole 2.5 tonnes gold worth Sh8 billion from his country.
According to sources, Barclays cut ties with Mr Kobia on January 14, a month after notifying him of the move.
The notification letter stated that the decision was made “following a review of our business”.
In the letter, Barclays states that it has also ceased offering Mr Kobia investment services.
The letter is attached as evidence in a suit Mr Kobia has filed seeking to declare the new regulations illegal, claiming that they will hinder investment from abroad and violate the privacy of clients.
Kobia has hit the headlines severally for many controversial reasons.
He once claimed to have paid Sh16 million in cash for two Range Rovers at a Nairobi car bazaar and said he was among the first Kenyans to import an Audi Q7.
Although a Kenyan national, the UN report alleged he carried a false Congolese passport under the name Ilunga Ngoei (or Paul Ilunga). But he once told a newspaper that he was nicknamed Ilunga Ngoei or ‘Prezda’ (president) by his friends from DRC because of their respect for him.
Mr Kobia has sued the Central Bank of Kenya and Attorney General Paul Kihara Kariuki claiming that Barclays’ decision was made following new rules that require individuals and institutions to reveal the source of money coming in or going out of their bank accounts.
“Any funds received in your favour after the closure will be returned to the remitter. We cannot, however, guarantee that such funds will be resent to you by the remitter,” the banks states.
“After we have closed your accounts, any additional funds remaining will be repaid.”
Last month, the bank suspended the safe box service after police found the highest amount of fake currency and gold stashed in two safe deposit boxes at Queensway branch in Nairobi.
The bank says it reached the decision to suspend the service due the emergence of new financial crime risks associated with its use.
“As an extra precaution, we have taken a decision not to take any new safe deposit boxes and are working with our clients to review the existing safe deposit boxes,” Jeremy Awori Barclays Bank Chief Executive Officer said in a statement to newsrooms.