KCB Group chief executive Joshua Oigara. FILE PHOTO | NMG
Summary
- Nagalakshmi Solutions Ltd (NLS) obtained orders stopping KCB from using its banking software after the lender continued using it despite terminating the five-year contract in November.
- NLS cancelled the software contract In November after failing to agree on payment, suspicion that KCB was replicating its products.
- NLS told the court that it has incurred “huge losses from the loss of business and fraudulent use of its software” by KCB.
- It is demanding a further $51.6 million (Sh5.2 billion) in lost business after KCB, its first major client, offered unfavorable referrals to other banks, leading to cancellation of deals.
The High Court has stopped KCB Group
from using a banking IT platform following a multi-million-shilling
lawsuit where the lender is accused of software piracy.
Nagalakshmi
Solutions Ltd (NLS) obtained orders stopping KCB from using its banking
software after the lender continued using it despite terminating the
five-year contract in November.
Judge Fred Ochieng
also ordered KCB, Kenya’s largest bank by assets, to uninstall the
software that works together with its core banking application and
barred the listed lender from developing a similar IT application.
The
order could affect banking operations such as withdrawals, cash and
cheque deposits since it works like a back up to the core banking
application.
“Pending the hearing and determination of
this suit the defendant (KCB Bank) by themselves or their agents or
servants or otherwise be restrained from using the plaintiff’s
(Nagalakshmi Solutions Ltd) computer software,” ordered Justice Ochieng
on Monday.
“KCB Bank provides a systems audit report
from an independent and credible systems auditor confirming that all of
Nagalakshmi Solutions Ltd software applications and developments have
been stripped out of the bank’s servers.
Central processing and data recovery sites,” reads the order dated March 27.
NLS cancelled the software contract In November after
failing to agree on payment, suspicion that KCB was replicating its
products and negative references issued by the bank to rival firms,
court documents show.
Court documents show that KCB has
continued to use the software without NLS permission, leading to a
daily claim of Sh2 million or Sh244 million for the 122 days the lender
has used the software since the termination of agreement.
NLS
told the court that it has incurred “huge losses from the loss of
business and fraudulent use of its software” by KCB, and argued that it
would suffer “irreparable loss” if an injunction stopping the bank is
not issued.
It is demanding a further $51.6 million
(Sh5.2 billion) in lost business after KCB, its first major client,
offered unfavorable referrals to other banks, leading to cancellation of
deals.
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