Air Afrik to fire 200 employees amid Stanbic fraud claims

The carrier has accused Stanbic Bank for the loss of a Sh2.1 billion plane-leasing contract with the government of South Sudan.

In Summary

• Stanbic Bank allegedly credited Sh746.6 million down payment to Air Afrik’s bank account only to reverse it a few days later.

• Air Afrik is seeking compensation amounting to $14.4 million (Sh1.5 billion).

An Air craft operated by Air Afrik
An Air craft operated by Air Afrik

Passenger and cargo carrier Air Afrik has announced a massive job cut, amid a court battle with Stanbic Bank which it has accused of “fraudulent dealings.”

Air Afrik says it will now be forced to cut roughly 80 per cent of its salaried staff in both Kenya and South Sudan by next month (November) as part of the company’s restructuring process. The move will send home at least 200 people.

The turbulence at the carrier follows the loss of a $20 million (Sh2.1 billion) plane-leasing contract with the government of South Sudan, where it has accused Stanbic of “banking irregularities and fraudulent banking dealings.”


Management yesterday said since the loss of the contract and the court case against Stanbic Bank, the company has been reviewing its process, “fitting people into the right jobs and in the process, some roles have become redundant.

We understand this is a challenging time for our team, but these steps were necessitated following Stanbic Banks negligent errors, oversight and unlawful actions,” the company said in a statement.

The court case stems from a banking transaction gone awry. Documents lodged at the Milimani Commercial Courts state that Stanbic Bank allegedly credited $7.2 million(about Sh746.6 million) down payment to Air Afriks bank account held in the same bank ,only to reverse it a few days later.

According to an official letter to the Central Bank of Kenya,seen by the Star, the South African-owned bank admits to having made an error.

“We depend on the bank’s processing team to adhere to this procedure but they regrettably made an error on this transaction,” Stanbic Bank (Kenya) head of legal Eliud Ogutu wrote to CBK’s director of banking supervision.

Letters obtained from the CBK and the Bank of South Sudan to Stanbic Bank questions why Air Afrik should suffer on account of a mistake admitted by the bank.

The bank allegedly withheld crucial information from the company as its customer, “with a view to covering its negligent errors, oversights and unlawful actions.”


This unfortunate situation was created by a severe lack in liquidity at the company, which resulted from Stanbic Bank failing to act diligently before freezing our funds without a valid court order,” the statement reads.

 The company alleges that the bank deliberately forged the reversal using a fake account dubbed Air Africa instead of Air Afrik in a bid to deceive them.

The move caused huge losses to the company, management has said, as it seeks compensation amounting to $14.4 million (Sh1.5 billion).

Air Afrik claims the bank unduly benefited from the funds as they were not reversed to Bank of South Sudan (BSS), despite Stanbic Bank freezing its accounts in February 2016.

Documents from Bank of South Sudan suggest that as of August 15, 2016, that is six months later, the funds were still not reflecting in their account disowning claims by Stanbic Bank that the funds were reversed.

According to the plaintiff, the funds were reversed 14 months’ post freezing Air Afriks account. 

The revelations from the court proceeding raises fresh questions about the banks risk, control processes and compliance with the Central Bank regulations.