Economy

Ex-Treasury chief loses Anglo Leasing scam loot

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Summary

  • Justice Mumbi Ngugi found that Patrick Ochieno Abachi and his accomplices could not demonstrate that they would suffer losses if the High Court judgment in March requiring the property be forfeited to the State were not suspended.
  • The judgment marked the first seizure of property linked to the Anglo Leasing scam, which involved the award of State contracts worth Sh70 billion to alleged fictitious firms.
  • Public funds were paid to foreign companies for services ranging from forgery-proof passports to naval ships and forensic laboratories, which never materialised.

A former chief accountant at the Treasury linked to the Anglo-Leasing scandal has failed in his bid to reverse the seizure of his multi-million shilling assets by the State.

Justice Mumbi Ngugi found that Patrick Ochieno Abachi and his accomplices could not demonstrate that they would suffer losses if the High Court judgment in March requiring the property be forfeited to the State were not suspended.

The judgment marked the first seizure of property linked to the Anglo Leasing scam, which involved the award of State contracts worth Sh70 billion to alleged fictitious firms.

Public funds were paid to foreign companies for services ranging from forgery-proof passports to naval ships and forensic laboratories, which never materialised.

This saw Mr Abachi, his wife, children and companies associated with him, lost undisclosed amount of money in several accounts, five cars, four apartments in Nairobi, a residential home and nine parcels of land in Machakos and Kajiado.

The judgment found that the accountant could not explain the source of the assets.

He also lost Sh1.9 million, which was seized from his house in November 28, 2007.

“I have considered the averments and submissions of the applicants, and I find that they have not demonstrated that they will suffer substantial losses if the orders sought are not granted,” Justice Ngugi, who has since been elevated to the Court of Appeal, said.

The judge said the case had been pending in court for more than 13 years, mainly because of applications filed by Mr Abachi and the companies associated with him.

In the judgment, she had found that the assets Mr Abachi had acquired were not commensurate with his known legitimate source of income.

“In the circumstances, I am constrained to find that the assets, the subject of this, are unexplained assets,” the judge ruled.

In the latest application, Mr Abachi argued that he was not satisfied with the judgment and will be appealing.

He petitioned the court to suspend the decision, arguing he risked losing the assets before conclusion of appeal.

One of the companies, Holdings Ltd, argued that two of the properties, an apartment in Nairobi’s South C area and another one in Nyali area in Mombasa, were distinct and did not belong to Mr Abachi.

The company also stated that some of the properties to be seized were sold to third parties, who are innocent purchasers.

The seized assets included 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.

Evidence presented in court flagged 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 name, and that 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.

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.

Court papers 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 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-operative Bank.

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.