Justice Mwilu’s loan dealings with Imperial Bank, alongside eight land titles that were charged as collateral to secure the multi-million shilling advances, are at the heart of criminal charges that the Director of Criminal Prosecutions (DPP) has levelled against Kenya’s second senior-most judge.
The judge is facing 13 counts of abuse of office, tax evasion and fraudulent recovery of loan securities.
Justice Mwilu’s lawyer, Mr Muluvi, notified Imperial Bank’s receiver-manager of a Sh65 million payment on January 1, 2016, which was to honour the KDIC’s demand.
Embattled Deputy Chief Justice Philomena Mwilu was a regular customer of the collapsed Imperial Bank whose eye for prime parcels of land saw her take out at least Sh131 million in loans, documents filed in court have revealed.
Justice Mwilu’s loan dealings with Imperial Bank, alongside eight land titles that were charged as collateral to secure the multi-million shilling advances, are at the heart of criminal charges that the Director of Criminal Prosecutions (DPP) has levelled against Kenya’s second senior-most judge.
The judge is facing 13 counts of abuse of office, tax evasion and fraudulent recovery of loan securities.
Investigators at the Directorate of Criminal Investigations (DCI) have accused the Deputy CJ of using her position to illegally obtain Sh12 million from Imperial Bank between August and October 2013. In her defence, however, the Supreme Court judge says that Imperial Bank extended her the Sh12 million as an unsecured loan, which she has since repaid in full.
“The sum referred to in count two of the intended charge was an unsecured loan advanced to Justice Mwilu by the bank and credited to her account,” Justice Mwilu says in her petition seeking to stop the DPP’s criminal prosecution.
High Court judge Chacha Mwita has suspended the Deputy CJ's prosecution until October 9, when he will hear the matter. Justice Mwilu has sued the DPP, Noordin Haji, DCI boss George Kinoti, the Chief Magistrate’s Court and Attorney-General Paul Kihara Kariuki.
In total the court papers show Justice Mwilu borrowed from Imperial Bank a short-term loan of Sh60 million, a Sh59.3 million long-term loan and the claimed Sh12 million unsecured loan. Remarkably, the affidavit and documents she has filed as evidence show that the Sh60 million loan was advanced to her one year before she bought the land used as collateral and before it was transferred to her.
Justice Mwilu’s affidavit and the attached documents indicate that Imperial Bank advanced her the loan on December 2, 2013. She says that she bought the land on December 18, 2014, which is a year after the same property was used to secure her borrowing.
The Sh59.3 million loan was secured by charging five parcels of land registered as 1265, 1273, 1274, 1275 and 1276 at the Ministry of Lands. Ownership documents for the five pieces of land are still in Imperial Bank’s custody.
On December 2, 2013, while still a Court of Appeal judge, Justice Mwilu used two pieces of land in Nairobi (reference numbers 3734/202 and 3734/209) as security for a Sh60 million loan.
One month after Imperial Bank was placed under receivership, she wrote to the Kenya Deposit Insurance Corporation (KDIC), through lawyer Stanley Muluvi, seeking a substitution of the loan security.
DCI investigators and DPP Haji believe that Justice Mwilu may have induced KDIC CEO Mohamud Mohamud to illegally release the two parcels of land to her. The judge asked the KDIC to release the two pieces of land to her in place of a half-acre property registered as 3734/1129. The KDIC, however, asked her to clear the Sh60 million loan, which had attracted Sh2.8 million in interest and the unsecured borrowing. The unsecured loan balance was then Sh2 million. The Imperial Bank receiver-manager also asked her to make partial payment on the long-term loan.
Justice Mwilu’s lawyer, Mr Muluvi, notified Imperial Bank’s receiver-manager of a Sh65 million payment on January 1, 2016, which was to honour the KDIC’s demand.
In January 2016, the KDIC wrote to Mr Muluvi acknowledging the payment and asking him to furnish it with the original title deed for the land that was to be used as a substitute. Documents Justice Mwilu has filed in court do not indicate whether she deposited the title deed.
The affidavits state that she is still repaying the long-term loan whose balance currently stands at Sh43 million. “On January 1, 2016 Mr Muluvi notified the bank of Justice Mwilu’s payment of Sh65 million in the bank’s account and required the bank’s release of the original titles for properties land reference numbers 3734/202 and 3734/209 together with duly executed discharge of charge,” the judge adds in her affidavit.
