Tobiko’s evidence against Anglo Leasing suspects

Director of Public Prosecutions Keriako Tobiko on Wednesday laid bare the evidence with which he will seek to nail suspected architects of the Anglo Leasing affair, including former Finance Minister David Mwiraria and businessman Deepak Kamani.

Mr Tobiko said in a statement that he has 53 witnesses and volumes of evidence showing how Mr Mwiraria and nine others conspired to defraud the State Sh40 billion through a dubious financing agreement.

The Anglo Leasing scandal refers to 18 contracts signed between the Kenyan government and several domestic and foreign companies for security equipment and services totalling $770m (Sh78 billion).

The Sh40 billion financing contract is one of them and the subject of the court trial that resumes today where the government paid Sh120 million finance agreement fee yet it was providing cash before delivery of goods. 

“The so-called contract was scheme, in fact a conspiracy, between the government officials charged and the beneficial owners of Sound Day Corporation and Apex Finance Corporation to siphon money from the government,” noted the DPP statement.

Under the Sh40 billion financing agreement reached in December 2013, Sound Day was to supply security equipment and arrange financing for a three per cent management fee while Apex Finance was to provide cash.

READ: Anglo Leasing-linked firm loses bid to avoid prosecution

DPP says the agreement stated that the Treasury was to provide financing before supply of equipment, implying that Sound Day earned the management fee on money provided by the government.

“The alleged financing in effect meant that the government was to pay interest upon monies that it was providing,” said the public prosecution chief.

“There was no credit to be advanced to the government of Kenya by Sound Day. This was a classic case of reverse financing where Sound Day was to earn interest based on credit advanced to it by the government as payment for the equipment.” Sound Day earned 1.2 million euros (Sh134 million) on the finance deal.

The DPP says it has evidence that Deepak Kamani, and his brother Rashmi Kamani and father Chamanlal Kamani own both Sound Day and Apex Finance Corporation.

Among the breaches, the prosecutor says the 10 suspects shepherded the Anglo Leasing contract knowing that funds had not been included in budget for the year to June 2004, adding that funds were diverted from other budget items to cater for the fraudulent expenditure.

The prosecutor reckons that the police, who were to use the security equipment, were not consulted.

Besides Mr Mwiraria, other former top State officials in the dock are Joseph Magari (Treasury PS), Dave Mwangi (Provincial Administration PS) and Chris Obure, who was Finance minister under former President Daniel arap Moi and is now a Senator.