Gachagua’s Sh200m proceeds of crime, anti-graft court rules
United Democratic Alliance (UDA) presidential running-mate Rigathi Gachagua faces a litmus test in his political career after a judge yesterday ordered that he forfeits Sh202 million to the State after the Anti-Corruption Court ruled that the money was proceeded from crime.
In a ruling that Gachagua later described as “biased and arrived at out of a sham trail”, Justice Esther Maina directed the Mathira MP to surrender the money. Her verdict came 11 days before the election.
In a swift reaction, however, Gachagua accused the judge of bias.
“Against the rules of evidence, she refused our application to cross-examine the investigator in order to test the veracity of his allegations. She ruled that all evidence should be through affidavits and rejected oral evidence,” Gachugua said in a statement.
While claiming that the verdict was rushed to undermine his candidature, Gachagua said he had already instructed his lawyers to seek an injunction at the Court of Appeal.
The MP has been at loggerheads with the Director of Criminal Investigations (DCI) George Kinoti over the latter’s accusation that he pocketed billions of shillings from a number of county governments in irregular dealings with them. He said the judge had turned down his request to call witnesses to testify how he acquired the money.
Gachagua and Kinoti have been engaged in a war of words over fraud cases against the lawmaker, who accuses the DCI of being used by the government to fight him.
Political image
However, Kinoti, who opted to go through the Assets Recovery Agency (ARA) has absolved himself from blame insisting that he had done his job professionally.
Most of the investigators at ARA are detectives attached to the agency by DCI.
Yesterday, Justice Maina said the Sh202 million held in Gachagua’s accounts at Rafiki MicroFinance Bank are proceeds of crime and therefore liable for forfeiture to the State.
She said the MP failed to explain how he acquired the wealth.
The money is held in three accounts; one holding Sh165 million, a second with Sh35 million and a third with Sh773,228.
All the three are registered in Gachagu’s name. A fourth account, holding Sh1,138,142, is registered in the name of Jenne Enterprises. “The Assets Recovery Agency has discharged its burden of proof that the funds were received by Gachagua without work done,” ruled the judge.
Gachagua has another pending case, in which he is facing charges of conspiracy to commit an offense of corruption, fraudulent acquisition of public property and money laundering.
No delivery
In the case whose hearing has been postponed to September, it is alleged that Gachagua defrauded the County Government of Nyeri Sh27.4 million between May 2015 and December 2016. He is also accused of fraudulently receiving Sh7.3 million, money suspected to be proceeds of crime through Rafiki Micro-Finance Bank.
“In fact, Gachagua admitted receiving the funds from government agencies and entities but there was nothing to show that he performed any contract. He only produced a letter dated February 9, 2015 from a ministry indicating Wamunyoro Investments Limited had been awarded a tender,” said Justice Maina.
Based on the contract letter, the MP was required to execute a contract but there was no evidence in court showing the tender was executed or performed.
Justice Maina held that ARA had proved that the MP and his companies received funds from government agencies and ministries, “yet they did not deliver any goods or services to the ministries or agencies.”
The court had been told that the funds emanated from the Ministry of Lands (Kenya Informal Settlements Programme), State Department for Special Planning, Ministry of Health, Bungoma County government, Mathira Constituency Development Fund (CDF), Nyeri County Government and the National Irrigation Board.
ARA informed the court that after being transferred to companies or businesses entities, the funds were ultimately moved to a fixed deposit account, which is Gachagua’s personal account.
In regard to claims by his business partner, Ann Kimemia — trading as Jenne Enterprises Limited — that part of the funds forwarded to her were for the tender they won on February 5, 2015, the judge said she had failed to table evidence.
The court held that Jenne Enterprises did not adduce evidence to show the sum of Sh1.3 million was obtained as a result of a loan from Gachagua’s company.
“There was nothing to show any goods or services had been delivered to the government agencies,” Justice Maina said.
It was also her finding that the notification of the tender award was not addressed to Kimemia but to Machine Centre Limited and Wamunyoro Investment Limited.
The order to forfeit the money arose from an application by ARA, whose investigators argued that Gachagua and Jenne Enterprises Limited were involved in a suspected complex scheme of money laundering.
Justice Maina also dismissed objections by Microfinance Bank against the forfeiture order. It had contended that the funds were secured for various credit facilities advanced to third parties. The loan facilities were secured on the strength of a fixed deposit sum of Sh165 million of Gachagua and the original fixed deposit Certificate of the account, said the bank.
After the ruling, Gachagua through his lawyers sought to be supplied with the judgement as he intends to appeal at the Court of Appeal.
