The High Court has rejected a request by Flexitech Group Limited and its directors to temporarily block their arrest and prosecution over allegations that the fintech company failed to surrender more than Sh30 million collected for Naivas Limited.
The court declined to issue interim conservatory orders, ruling that concerns about reputational damage and potential business losses were not sufficient grounds to suspend criminal proceedings.
In its decision, the court warned that allowing businesses and individuals to avoid prosecution simply because of the possible impact on their public image would weaken the administration of justice.
The judge, however, directed that the application be heard on its merits, noting that the court had not yet fully examined the circumstances surrounding the proposed prosecution.
The dispute arises from a partnership agreement signed by Naivas and Flexitech on February 10, 2021.
Under the arrangement, Flexitech used its Flexpay platform to allow customers to purchase goods from the retailer and pay in instalments.
Flexitech was permitted to retain five per cent of the payments as commission, while the remaining 95 per cent was to be transferred to Naivas within 24 hours.
Court records indicate that the company initially honoured the arrangement but later stopped remitting the collections, prompting Naivas to demand payment of the outstanding sums.
The retailer first sought Sh24.9 million before issuing a subsequent demand for Sh29.5 million.
Naivas later reported the matter to the police, leading to investigations by the Directorate of Criminal Investigations (DCI).
Following the probe, the Director of Public Prosecutions (DPP) recommended that the directors face charges of stealing by agent.
The decision, communicated on August 11, 2026, prompted the company and its directors to challenge the intended prosecution.
In their petition, the applicants argued that the disagreement was contractual and should be resolved through the dispute-resolution process provided in their agreement.
They accused the criminal justice system of being used to pressure them into settling a contested commercial claim and alleged that Naivas intended to replace Flexitech with an in-house platform modelled on Flexpay.
The directors further maintained that prosecution would threaten their businesses and damage their reputations.
They told the court that some had been arrested and released on police bond, while another faced possible arrest. They also cited an expected court appearance on October 12, 2026.
Naivas opposed the application, arguing that the evidence supported a criminal case rather than a simple commercial disagreement.
The court ordered the application to be fast-tracked, leaving the door open for conservatory orders if the applicants establish sufficient legal grounds, including under the principles set out in the Gatirau Peter Munya case.
