Rotich, Thugge now charged with Sh51b Kimwarer and Arror dams fraud

By K24Tv Team On Wed, 24 Jul, 2019 00:00 | 5 mins read
The prosecution team displays files on the multi-billion-shilling dams scandal at Milimani Law Courts in Nairobi, yesterday. Photo/BERNARD MALONZA

Bernice Mbugua @BerniceMuhindi

Director of Public Prosecutions (DPP) Noordin Haji yesterday tabled documents before a Nairobi court to show that National Treasury Cabinet Secretary Henry Rotich conspired with 15 others to defraud the government of Sh51 billion.

The 16, who were later released on bond or cash bail, faced charges in relation to the construction of the Sh63 billion Kimwarer and Arror dams scandal. Rotich and Treasury Principal Secretary Kamau Thugge were each released on Sh50 million bond or a cash bail of Sh15 million.

Anti-Corruption Chief Magistrate Douglas Ogoti while releasing them, ordered that they   surrender their passports within 48 hours and keep off their offices unless accompanied by investigating officers.

Other accused persons were released on various bond or cash bail terms depending on the charges brought against them.

Tender document

All the accused persons pleaded not guilty to the charges. Last night,  Rotich, Thugge and Wahungu were released from custody  while the rest who could not raise the bond and cash bail requirements spent the night at the Industrial Area Remand Prison.

Rotich and Thugge were charged alongside Tourism Principal Secretary Susan Jemtai Koech and Chief Economist and Head of Europe II Division Kennedy Nyakundi Nyachiro, National Environment Managemnt Authority (Nema) director Geoffrey Wahungu and 11 tender committee members.

Rotich was charged in two separate files relating to Kimwarer and Arror dams, same as the tender committee members. 

According to the charge sheet, the embattled CS conspired with his PS and nine others to defraud the Government of Kenya over  Sh24 billion  in respect of development of Kimwarer multi-purpose dam.

He allegedly entered into a loan facility agreement disguising it as a government-to-government loan guaranteed by the Italian government, knowing that the tender document contained in the request proposals for the dam project was a concessional agreement.

“The Kimwarer multi-purpose dam project was a concessional agreement where the intended concessionaire was to be the borrower and financieand not the government of Kenya,” read the charge sheet.

Rotich, Thugge and 10 others faced a similar account in another file where they are accused of conspiring to steal more than Sh27 billion in respect to development of Arror multi-purpose dam.

Rotich was further charged with six counts of abuse of office in two files while Thugge was charged with 10 counts of abuse of office.

The CS allegedly used his office to confer a benefit to CMC di Ravenna-ITINERA joint Venture  and the parties involved  by unlawfully  executing a facility agreement  for the funding  of the development of both dam projects, thereby creating an obligation  against the Kenyan Government to pay  over Sh51 billion.

Rotich faced another count of willful failure to comply with applicable procedure and guidelines relating to the management of public funds.

The court heard that he failed to ensure that the agreement in respect of the Arror and Kimwarer multi-purpose dams entered between the Government of Kenya, the said Italian companies and the Attorney General was lawful.

The CS alongside his PS and the Chief Economist were also accused of financial misconduct by causing an improper payment of public funds amounting to Sh10 billion belonging to the Government of Kenya, being the total sum paid in respect  to Arror multi-purpose dam project.

Rotich  together with other suspects, who had spent the  night at Muthaiga Police Station  were woken up at around 5am and at around 6.20am, they left for Pangani Police Station where other suspects who had been brought from Eldoret joined them.

The police van then proceeded to Parklands Police Station where detectives picked Wahungu.

They arrived at the Milimani courts some few minutes to 7am and taken to the holding cells in the basement where they stayed until 8.30am when they were taken to the courtroom where another corruption case against former Nairobi Governor Evans Kidero was going on.

It was not until around 9.30 am that Rotich and his colleagues were finally paraded before the magistrate to take a plea. All the time, Rotich remained pensive, only engaged in brief chats with his lawyers with his eyes glued to the roof, perhaps pondering what awaited him.

The session lasted until around 12.30pm when the court adjourned for the magistrate to write his ruling. 

Lenient bail terms

Only Kioko Kilukumi and Kipchumba Murkomen for the accused were allowed to address the court with the latter sending the courtroom into laughter when he stated: “I plead with the court to grant them lenient bail terms that are not punitive as the charges against them do not indicate that they diverted the money for their personal use.

Take the case of Ms Jemtai, who only joined the government last year, where does she get big amount of money for bail. She is still living from hand to mouth.”

Special prosecutor Taib Ali Taib, for the DPP submitted that he was not against accused being released on bail, as it is their constitutional right. 

“If they are willing to accede to these conditions, we will have no problem with what they have requested. The amount of monies that this republic has lost through these accused persons is immense,” Taib submitted.

“We will be praying to the court if these requirements are met and acceded to by the accused persons, we will be praying to this court to fix the terms of such bail to commensurate to the billions whose loss has been occasioned by these accused persons,” he added.

The charges were read out to them in a packed courtroom at the Milimani Law Courts, following their arrest on Monday when the Director of Public Prosecutions approved their arrest and prosecution.

“It is a proposition that we make on a without prejudice basis to our right to respond and one that we are making good faith, to save the court’s time,” the prosecutor said.

On Monday, while ordering their arrest, Haji had said the Treasury had negotiated a commercial facility, increasing the amount to approximately Sh63 billion, which is Sh17 billion more than necessary. 

According to the alleged commercial contract, the Kimwarer dam was to cost Sh20 billion while Arror was to cost Sh18 billion.

Haji had also said the country lost money through exchange rates after the Treasury entered into a facility contract in Euros while the commercial contracts were in US dollars.

Out of Sh63 billion in respect of the projects, as at January 2019, the Kenya Government had paid advance payment, commitment fee, insurance and other costs, totalling Sh19.7 billion. 

Out of this, Sh11 billion for insurance was paid upfront. “In contrast, if the borrowing was justified, a government guarantee would have sufficed at no cost to the Government of Kenya and Mwananchi,” Haji said. 

Cancelled flight

Yesterday, the prosecution team led by Taib Ali Taib, assisted by Alexander Muteti, Victor Owiti and Emily Kamau, asked the court to give the accused bail terms commensurate with the billions lost.

Taib further asked the court to direct them to deposit their travel documents in court. The defence team, which included Kilukumi, Murkomen,  Katwa Kigen, Jinaro Kibet, Mahat Samane, Phillip Nyachoti, Kevin Anami, Mwai Mugo and Stephen Kimathi, agreed with all the proposals, except the suggestion that bail terms be in billions of shillings.

 Kilukumi asked the court to release the accused on reasonable bond terms, saying the conditions should not be punitive in such a way that they will fail to secure suspects’ release. Kilukumi told the court that Rotich had cooperated with the police.  

He argued that the accused persons were Kenyans with a fixed abode and were well known to the prosecution and had no intention of running away. The court heard that PS Jemtai was on her way to the airport when she learnt that she was required to report to the police.

“She cancelled her flight and went to the DCI. She is a responsible lady and has every intent to clear her name,” Kilukumi told the court.  She was released on Sh30 million bond or a cash bail of Sh6 million.

Nema director general Geoffrey Wahungu and tender committee members were each released on Sh2 million bond or a cash bail of Sh750,000 bail. 

 Other accused persons who were not in court yesterday were ordered to report to detectives latest by Friday or warrants of arrest would be issued against them. The case will be mentioned on August 8.

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