The company claims the unauthorized transactions caused significant financial losses, leading to bounced cheques, penalty charges, and wrongful listing with the Credit Reference Bureau (CRB).
In its lawsuit, Erijam is seeking court intervention to stop any further unauthorized withdrawals and to compel the bank to remove its name from CRB, arguing that the listing was wrongful and has severely impacted its ability to access credit.
According to court documents, the dispute dates back to June 2023, when Erijam issued cheques worth Sh8.3 million to its suppliers.
The bank initially dishonored the cheques, citing insufficient funds, and subsequently imposed penalties amounting to Sh72,000.
However, the company alleges that the bank later processed the same payments without its approval, debiting its account and worsening its financial situation.
“The defendant, after disowning the cheques issued by the plaintiff and charging the plaintiff for the same, later proceeded to make payments for the dishonored cheques without consulting the plaintiff, debiting the account without authorization,” reads part of the court documents.
Additionally, Erijam claims that the bank deducted Sh7.2 million from its account and still went ahead to list both the company and its director with CRB, despite the alleged wrongful transactions being the bank’s fault.
The lawsuit further details how these deductions led to rent arrears, forcing the company to shut down its operations.
Erijam’s directors also claim to have suffered psychological and emotional distress due to the financial strain and the damage to their creditworthiness.
Despite numerous attempts to resolve the matter amicably, the company alleges that the bank has failed to take corrective action, leaving it with no choice but to seek legal redress.
