How Eritrean investor was conned Sh320 million by Ruto ally

Imagine yourself taking a leap of faith and splurging your pre-retirement fortunes into promising deals that then turn into hot air and a wild goose chase?

And imagine looking up to the courts to extricate you from the losses, only to get more and more entangled, and the possibility of recovering your money becoming a distant rumour? 

If his story were to be believed, this is what has become of a retired UN honcho, Haile Menkerios after he sunk millions of money, Sh320 in investment and anticipated profits, into a scheme Department of Defence (DOD) tenders which a city politician has owned up to their being fictitious.

Before he ran into the crosshairs of Nairobi “tenderprenuers,” Menkerios was looking up to a life in retirement entailing easy, regional travels after a checkered career in diplomatic service.

His last posting in 2018 was in Addis Ababa as the Head of the United Nations Office to the African Union and Special Representative of the UN Secretary General to the African Union.

Before that, he had served as UN Special Envoy of the Secretary General for Sudan and South Sudan, Congo DR and dabbled in high level political mediation in Zimbabwe and Madagascar.

He had served his country in various diplomatic postings including being its first envoy to Ethiopia, and its ambassador in Organization of African Unity, and the UN.

And it was not for want of quality education that he got himself entangled in the mess. Menkerios had earned his bachelor’s degree from Brandeis University in the United States, and a Master’s Degree at the prestigious Harvard University.

However, all these credentials were no match for Nairobi-based hustlers who had excelled in street smarts. 

The plot is set in the affluent Kilimani area, Nairobi, 2016. Like all good plots, friends and acquaintances, of fair gender and their bloke counterparts, are involved.

Menkerios is still working in the UN as head of UNO in Ethiopia but is about to retire. Abeba Wekdehaimanot is a business lady, a Kenyan citizen of Eritrean origin and a friend of Menkerios of 40 years.

On April 28, 2016, she introduces Menkerios to a Nairobi businessman Francis Mureithi and his partner, Francis Mwaura. The meeting takes place at Weldehaimanot’s Kilimani apartment.

In this meeting, Hussein Osman, another friend of Weldehaimanot, is in attendance. He vouches for Mureithi as a reputable businessman who is undertaking big tenders for the Department of Defence (DOD).

In fact, he says, he has been working with Mureithi to supply jute bags to DOD. At the apartment, Mureithi explains his predicament: He has a multimillion contract to supply DOD with beans and rice.

He also has another contract with Mumias Sugar to be supplied with 30,000 bags of sugar per week for onward supply to either DOD or open market for a tidy sum.

As a senior citizen who suspended studies abroad to fight in the country’s war of independence from Ethiopia, Menkerios has no reason to doubt Weldehaimanot and her Kenyan friends.

Menkerios is able to raise the capital but needs assurances for which a joint venture agreement is immediately drawn up. Under this arrangement, Menkerios would provide the needed capital of USD235,000 (approximately Sh25,850,000).

He would then be refunded the amount together with USD23,500 (approximately Sh2,585,000) as profit. Two days after signing the joint venture agreement, Menkeriors transfers the amount to Weldehainamanot’s account for onward transmission to Mureithi’s Company account.

Mureithi confirms receipt of the money, and the deal is on. Before this deal could go through, Mureithi announces that he has a new contract. Menkerios, he suggests, would reap better if he reinvested the entire amount plus its profits in the new contract.

Menkerios has no qualms and reinvests the amount in the new contract with a mouth-watering offer of 30 percent interest, up from 10 percent in the original deal.

On May 17, 2016, they sign a new contract reflecting the new amounts, this time around USD618,000 (Approximately Sh67,980,000) in investment and profits. He transfers the difference of USD360,000 (including the USD2,585 profit he was to make in the first deal).

To further insulate the deals whose value is expanding, they incorporate a joint company in which they all have shareholding corresponding with share of profits. Money would then leave this joint company to Mureithi’s company which has the contractual agreements with DOD.

Regarding the Mumias Sugar deal, Mureithi informs Menkerios that the company requires USD1,000,000 (approximately Sh110 million) guarantee, to which the Eritrean agrees and transfers the amount.

Things are already looking up but before long, Mureithi has another suggestion. He has just been awarded an Export Processing Zone (EPZ) business service permit by way of a lease to build and operate a weigh bridge.

With his DOD and Mumias payments still pending, Mureithi is short of capital.

He requires Menkerios to consider buying Sh5.25 million worth of shares into the company which would run the weighbridge. Menkerios agrees but is taking a long to pay the amount.

Mureithi suggests that they instead buy off another company that has the required capital for the tender. Menkerios agrees to the proposal and releases Sh11,000,000 for the buyoff.

They have not gone far with the weighbridge when Mureithi announces that he has yet another tender to supply DOD with tea leaves.

Once again, Menkerios transfers USD160,000 (Approximately Sh17,600,000 to Mureithi’s company. Before long, the Eritrean begins to get edgy, having sunk millions with zero returns thus far.

Every demand for payment is met with this or that excuse, from DOD processes to IFMIS delays. It goes on for months, and years before Menkerios thinks of taking the next steps.

Journey begins in court

He mistakenly buys into the street truth of “evidence kwa karatasi” and lodges a civil suit at Milimani Commercial Courts on May 2, 2018, demanding a total of USD 4,921,500 (approximately Sh541,365,000) in investments, profits and interest.

He has no idea what awaits him in court. The suit would turn the tables on him and turn his world upside down. Initially, Menkerios' suit went undefended, earning him quick victory.

Mureithi however, came in big and reversed these gains. He denied knowing or ever having met Menkerios, having ever induced him to get into any agreements with him, or having ever been a director of Doc Find Ltd, the Company which received the funds.

He denied having “any idea of the nature and circumstances leading to the transactions.” Intriguingly, he did not deny receiving money from the Eritrean.

Mureithi described Menkerios as “deluded” and most of his claims as “fertile imagination”. By this time, Mureithi had long ceased being director of Doc Find Ltd, and transferred his shares to a Chinese who could not be traced in trial.

In the course of this suit, few things emerged by way of evidence. Weldehaimanot told the court that Mureithi told them he was closely connected to the President of Kenya who took him on a trip to Israel.

At the time, Uhuru Kenyatta was the President of Kenya. Mureithi later switched camps to President William Ruto, and unsuccessfully ran for a parliamentary seat in the President’s UDA party in 2022.

Both Mureithi and his associate Mwaura claimed that there had been neither DOD nor Mumias tenders. Their position was that all these had been fabricated to create a way for the Eritrean to bring money into the country for his own purposes.

According to their witness statements and oral evidence, Menkerios did not want the UN system to know and so they devised a scheme to pass the money as investments.

There was also a claim Menkerios wanted to use the money for his presidential campaigns.

“I was a broker. He needed money to come in. I facilitated and got my cut. He got his money less my commission,” was the summary of Mureithi’s testimony in court.

This notwithstanding the fact that in his witness statements, Mureithi had denied knowing or ever having met Menkerios. At the hearings, Mureithi group's core submission was that the contract between them and Menkerios was illegal.

It was thus unenforceable under Kenyan law and the Eritrean had no claim against them. As the civil suit ensued, Menkerios lodged a criminal complaint with the Directorate of Criminal Investigations.

In the criminal investigations which ensued, sleuths affirmed that the tender documents adduced by Mureithi’s group to Menkerios had been largely work of forgery.

DOD denounced the letter of offer as did Mumias, while EPZ acknowledged they had offered Mureithi’s company land but cancelled. DCI investigations showed that Mureithi used part of the money, Sh75 million, to purchase shares and properties in Ngong.

DCI recommended to ODPP to charge Mureithi and his associate Mwaura with charges of obtaining money by false pretences among others. Investigators managed to retrieve electronic evidence by way of email exchanges between the parties attesting to legitimate business dealings between them.

In his statement to DCI, Mureithi repeated the claims in the civil suit, that he agreed to a scheme to help Menkerios bring money into the country for purposes of his political bid for Eritrean presidency.

He acknowledged the email communications but said they were all a ploy to cover for illegal deals of moving money around. He confessed to not having contracts with DOD, EPZ and Mumias.

In his statement to DCI, however, Mwaura vouched for the state contracts and said money had not yet been paid hence the delay to refund. He said he witnessed Mureithi making some deliveries to DOD and promised payments would come soon.

In 2021, Mureithi and Mwaura were charged in Court and their matters dragged on in the corridors of justice. In June 2023, Mwaura moved to the High Court in Kiambu seeking to stop his criminal prosecution, citing abuse of process.

He claimed there had been an inordinate delay in the commencement of his trial, and that the DPP unfairly targeted him yet the matter involved a company where the other directors were left out.

He also claimed there had been no court decision declaring the transaction as illegal hence criminal prosecution was illegal.

He wanted a declaration made to the effect that the criminal trial was unconstitutional, the decision to charge him quashed altogether, and the DPP directed to terminate the proceedings against him.

Based on these facts, Mwaura, under a certificate of urgency, sought a stay of the criminal proceedings against his criminal trial with Mureithi. The orders were issued by Justice Dorah Chepkwony on June 25, 2023.

Mwaura and Mureithi inched closer to their freedom as the Eritrean inched closer to losing his money. Menkerios opposed the stay by challenging the supervisory jurisdiction of the Kiambu High Court to entertain a matter which was already being handled in Milimani, Nairobi.

Two years later, and a ruling on Menkerios' opposition to the stay has never been delivered. The ruling was scheduled to be delivered on August 9 last year (2024), but has never been delivered ever since.

On November 8 last year, as Menkerios waited on the ruling, Justice Frida Mugambi, sitting in Milimani, agreed with Mureithi’s group, dismissed the civil suit, and declared the series of transactions illegal.

“It is unreasonable to believe that a prudent investor would inject such a substantial amount of capital without clear documentation or understanding of the venture's nature and business opportunity.

“The plaintiff does not explain why no other accompanying documents, such as tender applications, LPOs, invoices or delivery notes have been provided to the Court, nor does he address the serious allegations of illegality,” the Judge said.

In the Judge’s finding, it appeared more likely than not that the transactions were tainted, thus unenforceable. The agreements relied upon to claim the monies were thus “a façade, lacking any legitimate commercial purpose.”

“The court cannot, and will not, lend its authority to enforce a contract grounded in illegality, regardless of the parties’ intentions or the plaintiff's claims,” Justice Mugambi sealed Menkerios' fate in the matter.

Menkerios was left clutching onto his agreements, emails and tender award letters, and waiting for Justice Chepkwony’s ruling, his millions having dissipated in the thin air.

In January this year, Menkerios set out to appeal Justice Mugambi’s judgment.

In his memorandum of appeal, Menkerios listed eleven grounds of appeal, among them alleged failure to consider all evidence, accepting uncorroborated evidence, denying liability where it had been accepted, and misapplying legal principles.

And on July 24 this year, Mwaura pulled a surprise, indicating that he was withdrawing his petition, which had since been transferred from Kiambu back to Milimani and handed over to Justice Chacha Mwita.

The reason indicated was that “due to the progress of the criminal case, parties agreed for the petition to be withdrawn to allow the criminal case proceed to hearing.”

The formal order on the withdrawal of the petition is yet to be extracted with a hearing now set for September 22. The criminal case is pending before Hon R. K Ondieki.