Relief for taxpayers as mega scandals return to courts

Kenyan courts presided over some of the biggest corruption cases, offering taxpayers hope of recovering some, if not all, of the funds allegedly swindled from their pockets.

This is the year in which the High Court shot down yet another attempt by businessman Deepak Kamani to stop Kenya from assisting Switzerland with investigations into the Anglo Leasing scandal that saw Kenyans lose more than $600 million (Sh53.4 billion) in fraudulent security contracts.

Switzerland’s investigations into the scandal saw it ask Attorney-General Githu Muigai for documents regarding some individual’s suspected of involvement in the scandal, including Mr Kamani.

The businessman had on July 15 asked the High Court to stop the co-operation, unless the AG furnished him with the same information on him that was to be handed over to the Swiss authorities.

Justice Isaac Lenaola, however, declined to block the Swiss-Kenyan co-operation, and by the August 5 hearing of the matter, Prof Muigai had already handed over dozens of files on Kenya’s investigations into the scandal.

The judge also declined to compel the AG to supply Mr Kamani with copies of contracts his companies had entered into with the government, as he had not evidenced his claim that he was denied documents.

“It is unclear why the petitioners failed to show that they had in fact requested for the information they now seek and the same was deliberately denied and with no reasons for such an action being given so that their right to come to court can be said to have crystallised,” he said.

Mr Kamani further claimed that Swiss Ambassador to Kenya Jacques Pitteloud had tried to extort $55 million (Sh4 billion) from him. The investigations, he added, were a repercussion for refusing to pay the bribe.

READ: Kamani sues Swiss envoy in extortion claim

But Mr Pitteloud denied the claims, arguing that the colossal sum was a “settlement for the irregular contracts entered into by Mr Kamani and the Kenyan government”.

The Euro Bank scandal also returned to the High Court after fallen stockbroker Shah Munge moved to court, seeking to stop the National Social Security Fund (NSSF) from selling its last known assets in the Nairobi bourse to recover lost funds.

NSSF, had in 2009, won a suit against the stockbroker behind the scandal, in which the court awarded it Sh258 million that was to mature to close to Sh2 billion inclusive of interest.

Having ceased operating after the scandal was brought to the fore in 2002, there were no known Shah Munge assets to sell for recovery of the money, until NSSF discovered 1.5 million shares in the stockbroker’s name at the Nairobi Securities Exchange worth hundreds of millions of shillings.

John Munge, a partner at the stockbroker and a director at Euro Bank at the time of the scandal, opposed the move, arguing it had filed a notice of appeal.

READ: Shah Munge fights fresh NSSF bid to seize its property

An investment firm — Southern Bell — also joined the suit arguing that it owned some of the Shah Munge shares that is claimed to have been unable to transfer before this year’s NSE annual general meeting.

“It was only on April 25, 2014 when the provisions on pre-emptive rights were lifted thus explaining why Southern Bell did not effect a registration of transfer,” said the firm.

In the scandal, the National Hospital Insurance Fund lost Sh479 million, Kenyatta National Hospital lost Sh421 million, Kenya Post Office Savings Bank, Kenya Tourist Development Corporation, Kenya Pipeline, Kenya Sugar Board lost a combined Sh235 million.

The High Court also added a new twist to the Triton Scandal that saw the firm’s financiers and marketers lose Sh7.6 billion.

Triton, owned by Mr Yagnesh Devani, sold all its stock at the Kipevu storage facility in Mombasa without informing its financiers and marketers.

In 2009, Mr Devani was charged in absentia for obtaining Sh955,334,094 from Kenya Commercial Bank, and 26,216.60 tonnes of oil at the Kipevu storage facility in Mombasa valued at Sh1,532,272,140.

Justice Mbogoli Msagha cleared the way for Mr Devani’s trial to start despite his absence.

“There was the issue about the exposure to Triton being high, the growth of Triton was also considered high over a three-year period in addition to an adverse mention of Triton by Charterhouse Bank,” a witness said at the opening of the trial on August 30.