Former KPC boss Shem Ochuodho put on defence in Sh827 million graft case

A Nairobi court has ordered former Kenya Pipeline Company (KPC) Managing Director Dr Shem Ochuodho to defend himself in a case where he is accused of conspiring to defraud the oil parastatal of over Sh827 million.

Milimani Anti-Corruption Court Principal Magistrate Zipporah Gichana ruled that Dr Ochuodho and his co-accused, Janice Theresia Wanjiku Kiarie alias Terry Wijenje, a former director of Triple A Capital Ltd, have a case to answer.

"I find that the prosecution has established a prima facie case against the accused persons here to enable each of them to mount a defence. Accordingly, I put the accused persons on their defence," Magistrate Gichana ruled.

The court reached the decision after hearing testimonies from more than 20 prosecution witnesses in a case that has dragged on since 2010.

The magistrate directed that the matter be mentioned on July 3 to set dates for the defence hearing.

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In the case, Dr Ochuodho and Wijenje are alleged to have conspired to defraud KPC by entering into a debt refinancing arrangement through Triple A Capital Ltd, under which the company was to pay KPC’s international creditors.

However, the prosecution claims that the company could not make such payments and that KPC ended up incurring unjustified credit charges amounting to Sh827,564,608.20.

One of the key prosecution witnesses, engineer Caleb Olall, a former KPC board member, testified that the company’s board never approved the borrowing of Sh2 billion from Triple A Capital. 

Olall told the court that the KPC management bypassed internal procedures and instead sought approval directly from the Ministries of Energy and Finance.

“The board was never given the terms of the proposed borrowing or any evaluation reports. Despite several requests, management failed to provide this information,” Olall said.

He further alleged that the board was pressured and intimidated, with instances of bullying and threats of dismissal from the then board chair and managing director if any member opposed the funding arrangement.

“If you disagreed with the appointing authority, you risked being sacked,” he told the court.

Olall also questioned the authenticity of minutes presented in court, claiming they did not reflect actual board discussions.

 He alleged the minutes may have been doctored.

Despite these concerns, he noted that the board gave blanket approval for the refinancing arrangement due to the involvement of senior government officials, including the ministers for Energy and Finance, and the clearance of contract documents by the Attorney General.

The prosecution alleges that between May 2003 and July 2004, Dr Ochuodho and other officials fraudulently caused KPC to pay over Sh1.25 billion to Triple A Capital, purportedly as a refund for payments made to KPC’s creditors, particularly Export Development Canada (EDC), when no such payment had been made.

Dr Ochuodho, a public officer at the time, is specifically accused of instructing Standard Chartered Bank Kenya to disburse Sh1,250,577,549 from KPC’s account to Triple A Capital under false pretences.