Economy

Ex-Treasury boss loses apartments, five cars over Anglo Leasing scam

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Anglo-Leasing suspects from right: Dave Mwangi, David Onyonka, Deepak Kamani and Rashmi Kamani at a Milimani Court on October 11, 2018. FILE PHOTO | NMG

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Summary

  • High Court judge Mumbi Ngugi said Patrick Ochieno Abachi failed to explain the source of the assets and ordered that they be surrendered to the State.
  • It marks the first seizure of property linked to the Anglo Leasing scam, which involved the award of State contracts worth Sh70 billion to non-existent firms.

A former chief accountant of the Treasury linked to the Anglo Leasing corruption scandal has forfeited multi-million shilling assets, including five cars, four apartments in Nairobi, a residential home and nine parcels of land in Machakos and Kajiado, to the State.

High Court judge Mumbi Ngugi said Patrick Ochieno Abachi failed to explain the source of the assets and ordered that they be surrendered to the State.

It marks the first seizure of property linked to the Anglo Leasing scam, which involved the award of State contracts worth Sh70 billion to non-existent firms.

Government funds were paid to shadowy foreign companies for services ranging from forgery-proof passports to naval ships and forensic laboratories, which never materialised. The transactions became known as the Anglo Leasing scandal after the name of the company that was awarded the first of the contracts.

“I am satisfied on the evidence placed before me by the plaintiff (EACC) that the 1st defendant (Abachi) has unexplained assets within the meaning of Section 2 of the ACECA,” Justice Ngugi said, noting that the ex-Treasury official failed to account for his wealth when granted a chance to do so.

“The assets are not commensurate with his known legitimate source of income, which was his salary. In the circumstances, I am constrained to find that the assets, the subject of this, are unexplained assets.” 

The forfeited assets include nine parcels of land in Mavoko and Kitengela, a four-bedroom house in Mavoko, four apartments in Parkview Estate in Nairobi’s South C area, a house in Mugoya Estate and property in Mombasa’s Nyali area. 

The court also ordered Mr Abachi to surrender five motor vehicles, an undisclosed amount of money held in three bank accounts and Sh1.99 million in hard cash that was seized from his house in November 28, 2007.

Evidence presented in court captured Mr Abachi’s questionable wealth accumulated within five years after he joined the Treasury in 2003 from his previous job at the Agriculture ministry where he earned a gross salary of Sh54,000.

By 2008, Mr Abachi had acquired properties worth more than Sh80 million, which he registered in his names, those of his wife, children and relatives as well as companies where he is the majority shareholder. 

The Ethics and Anti-Corruption Commission(EACC) said investigations revealed that he was directly involved in the Anglo Leasing transactions and authorised the payments to the phony companies. A special audit on the contracts later found that the government suffered loss due to single sourcing and there was absence of complete information on the work, goods or services delivered in respect of each contract. 

The Anglo Leasing-type contracts related to 18 deals entered by the government with phony companies, and which were paid billions of shillings. 

Businessman Deepak Kamani and several former senior government officials are facing trial over the scandal, which came to light in April 2004. 

The court heard that Mr Abachi acquired one of the houses for Sh54 million in 2006, one of the apartments for Sh5 million in 2005, two other apartments in Parkview for Sh9 million and parcels of land in Kajiado and Mavoko between 2004 and 2005. The EACC said the properties were proceeds of crime because he failed to indicate them in his wealth declaration forms and were also not commensurate with his salary.

The commission added that Mr Abachi used his position to improperly confer benefits to himself within a span of five years -- between 2002 and 2007. 

Evidence presented in court showed that Mr Abachi used to make daily deposits, amounts that would add up to Sh70,000 in two days and a minimum of Sh300,000 monthly, yet he earned a net salary of Sh35,000. A tabulation by the EACC showed that the deposits he made in two years totalled to Sh17.2 million. 

Mr Abachi defended himself saying the search at his house was illegal and a violation of his rights. He maintained that he had the right to own property and that he paid for the house in Mugoya in two instalments through a government house purchase scheme. 

He claimed that he bought the properties in Mavoko between 1999 and 2000 from his salary and allowances at Sh300,000 and put up a four-bedroom house. Some of the properties, he maintained, were acquired from proceeds of a bar and restaurant business and loan from Co-op bank. 

The EACC, however, said his explanation was not satisfactory because his income and expenditure did not tally. 

Mr Abachi claimed that he was holding the apartments in South C and the Nyali property on behalf of Maxwell Mbecah, who was residing in the US.

“Further, nothing would have prevented the 1st defendant from placing before the court the alleged power of attorney in respect of the properties that allegedly belong to Maxwell Mbecah,” the judge said adding that the assets should have then be registered in Mbecha’s name.