30th April, 2016

TO: THE BOARD OF DIRECTORS

BORA BORA BANK LTD.
C.C: THE C.E.O
THE CHAIRPERSON
REF: LEGAL OPINION ON THE NEGATIVE PUBLICITY ABOUT THE BANK.
Since June 2015, the bank has been experiencing negative publicity on social media blogs,
Facebook and twitter. The social medias allegations were that the bank had non-performing
loans running to tens of billions of shillings and that 90 of those loans had been advanced to top
management of the bank. Later in January 2016, the CEO and the chairperson of the Bank issued
press statements denying those allegations going through social media. As the bank was listed on
the Nairobi Securities Exchange, it issued a profit warning just ten days to release of the first
quarter results. Later, an unknown whistle blower from the bank leaked the financial results that
indicated that the top management of the Bank had advanced themselves totaling KES 17B.
These loans were non-performing. Following those revelations, social media was awash with the
leaked information causing a Bank-run. This affected the liquidity of the bank. The Central
Bank of Kenya put the Bank under receivership and finally to the closure of the bank by CBK.
The Bank identified three blogs, five twitter accounts and four Facebook accounts as the
originators of what the bank called Rumor mongers.
The issues identified in this case include the following;
a) If the social media (blogs, Facebook accounts and twitter accounts) had any rights to post
negative publicity about the bank.
b) If the social medias information was defamatory in any way.
c) If the social media can be liable for the downfall of the bank.
d) If the bank can sue these social Medias and obtain damages.
The rules of law of law that can be identified in this case and those that go hand in hand begin
with the constitution. Freedom of expression and media freedom are constitutionally guaranteed
rights under Articles 33 and 34 of the Constitution of Kenya. Articles 33 states that, Every

person has the right to freedom of expression and this includes Social Medias too. However, it
goes on under the sub-sections to indicate that it does not extend to hate speech and advocacy of
hatred.
In Article 33 (2) the constitution states that In the exercise of the rights of freedom of
expression every person shall respect the rights and reputation of others. Article 34 (2) (b)
further states that, The state shall not penalize any person for any opinion or view or the content
of any broadcast, publication or disseminations. All these provisions look into the extent that
social medias can go in the exercise of their rights.
Article 9 (2) of the African Charter for Human and Peoples Rights (A.C.H.P.R) also gives
people, including social medias, the right to express and disseminate their opinions within the
law
The other statute to look at is the Penal code. Under Section 198 (1) (g), it states that,
Publication of defamatory matters are privileges and no person shall be under any circumstance
be liable to punishment if the person publishing the matter is legally bound to publish it. Section
195 of the Penal code then defines a defamatory matter as, a matter likely to injure the
reputation of any person by exposing him, to hatred or likely to damage any person in his
profession or trade by injury to his reputation.
Section 196 (2) of the Penal code also goes on by stating that, It is not necessary for libel that a
defamatory meaning should be directly or completely expressed; and it suffices if such meaning
and its application to the person alleged to be defamed can be collected either from the alleged
libel itself or from any extrinsic circumstances, or partly by the one and partly by the other
means. This simply means that as long as statement has been expressed or said, even the
circumstances surrounding when such statement was given can be enough for defamation to
suffice, and in this case, the circumstances surrounding were the fact that there were leaked
financial results from an inside the bank whistle blower.
Section 199 of the Penal Code also states that, A publication of defamatory matter shall be
deemed not to have been in good faith if that the matter was untrue, and that he published it
without having taken reasonable care to ascertain whether it was false or true.

My analysis of this case considering the rule of law, under the issue whether the media had a
right to post negative publicity or if it was lawful by them posting such information to the public,
according to the Constitution and the A.C.H.P.R, They had each and every right to express their
opinions however, they did that unlawfully and therefore not within the law because they did not
respect the reputation of the bank while posting such information.
On the issue if the media information was defamatory, it was. According to the Penal code, the
social media publishing such information was not legally bound to post such information. And in
the long run, the reputation of the bank, in its trade, was ruined and injured because their
information was not in good faith.
However, the media cannot be liable for the banks downfall because they are not entirely to
blame having in mind that a whistle blower leaked out some information which supposedly gave
light and proved the medias earlier allegations concerning the non-performing loans.
The Bank therefore can sue the Social Media on the ground of defamation and the media is
therefore liable to pay for damages.
DRAWN BY:
FIRM SIX AND COMPANY ADVOCATES,
HARAMBEE HOUSE 5TH FLOOR,
HARAMBEE AVENUE,
P.O BOX 00100-01000
NAIROBI.