Former Treasury Cabinet Secretary Henry Rotich has scored a major legal victory in the Sh63 billion Arror and Kimwarer dams’ corruption case after a magistrate dropped two charges against him.
Chief Magistrate Douglas Ogoti ruled yesterday the prosecution had failed to demonstrate how the two charges linked Mr Rotich to specific breaches under the procurement and public finance management laws.
The case stems from an investigation into the misuse of funds in the two dam projects overseen by Italian construction company CMC Di Ravenna, whose directors have been charged in absentia.
Mr Rotich, who was replaced in July 2016 after serving in the finance docket since 2013, has to battle 18 other charges in connection with tenders for the construction of the dams.
“The two charges complained of lack specificity as to the actual facts demonstrating what was offended under the ACECA (Ant-Corruption and Economic Crimes Act) and under Public Finance Management (PFMA) Act and the same are rejected,” Mr Ogoti said.
The Public Finance Management Act states that one commits a crime if they fail to comply with procurement procedures and guidelines relating to allocation, sale or disposal of property, tendering of contracts, management of funds or incurring of expenditure.
The magistrate said the prosecution failed to bring out clearly the aspect of public finance management that Mr Rotich violated.
He added that the charges contained two different laws and prosecution had not explained why they want the court to rely on one law to punish an offence committed under another law.
Mr Rotich was charged afresh in May together with former Kerio Valley Development Authority managing director David Kimosop, Kennedy Nyakundi (chief economist, Treasury), Jackson Njau Kinyanjui (director of resource mobilization, Treasury) and Titus Muriithi (the inspector-general of State corporations).
Mr Rotich denied more than 20 counts, including abuse of office, conspiracy to defraud, wilful failure to comply with the law relating to procurement and engaging in a project with prior planning.
In the first count, the court heard that Mr Rotich, Mr Kimosop, Mr Nyakundi, Mr Kinyanjui and Mr Muriithi conspired to defraud the government of $501,829,769 by entering into a deal for the construction of the two dams in Elgeyo Marakwet County, yet the project had not been approved.
They allegedly committed the offence between December 17, 2014 and January 31, 2019 by improperly securing a commercial loan under the guise that it was a government-to-government agreement and in the process made the Kenyan government liable as a financier and borrower.
They are also accused of single sourcing an insurance policy and causing the government to lose Euros 42,088,198 (Sh5.56 billion at the current exchange rates).
Mr Rotich was further accused of using his office as a Cabinet Secretary to confer contractual rights and benefits to CMC I Ravenna-Itinera joint venture and unlawfully executing a facilities agreement.
Mr Muriithi was accused of giving a misleading report on the two dams to the Cabinet Secretary for East Africa Community and Regional Development, where KVDA falls under, causing losses to the government.
Mr Rotich said the public debt management office at the Treasury reviewed, negotiated and sought legal clearance from the Attorney-General before recommending to him to sign the loan agreements.
He said Director of Public Prosecutions (DPP) Noordin Hai left out players in the chain of events, suggesting bias.
He said the DPP left out Githu Muigai, the AG, and Njee Muturi, the Solicitor General at the time, who issued various legal advice and opinion confirming the facilities agreement was legally binding and in compliance with the Kenyan laws.
Mr Rotich said he signed, he signed the agreements with BNP Paribas Forties S.A./N.V; Itesa Sanpaolo S.P.A.; Unicredit S.P.A. and Unicredit Bank AG in April 2017.
“That it is the duty of the National Treasury and Cabinet Secretary in particular who can bind government in a facilities agreement and as such, I am being charged for doing a statutory duty prescribed under the PFM Act,” he said.