Private lawyers in Sh5bn funds case spark court showdown

The issue of whether the government should be represented by private law firms in court came up yesterday in the Sh5 billion sovereign and infrastructure funds case.

Lawyer Moses Kipkogei appeared on behalf of his colleague Eric Gumbo, who represents Treasury Cabinet Secretary John Mbadi in the case.

However, UK-based human rights activist Eliud Matindi argued that Mr Kipkogei’s presence violated High Court orders issued in Nakuru, which bar the national and county governments from hiring private practitioners to represent them.

“We have a case in Nakuru which bars the Attorney General from hiring private practitioners while there are state counsels,” said Matindi.

Matindi’s position was supported by Consumer Federation of Kenya (Cofek) lawyer Tali Tali, who argued that the Attorney General’s office should continue representing the CS since the Nakuru case has not been settled.

“Because Mr Emmanuel Bitta and Henry Kaumba are in this case, perhaps Mr Kipkogei should stay out, as there are orders in Nakuru,” said Tali.

In a brief response, Kipkogei said the objectors needed to formally move the court to have him excluded from the case.

“They know what to do; they can move the court appropriately,” he said.

Meanwhile, Katiba Institute lawyer Paul Gichana also questioned whether Mbadi had defied court orders.

He said that in Parliament, the CS allegedly told Members of Parliament that the funds had already been established and that a private company was already in place to run them.

“We appeared in Parliament, and the CS said the funds had been established with regard to a private company. If that is the case, perhaps the respondent should file an affidavit on compliance with the court orders,” said Gichana.

In response, Kipkogei said his client would file a detailed affidavit explaining what had been done before the orders were issued and the position thereafter.

In the case, Nakuru-based surgeon Gikenyi Magare, together with Matindi, Philemon Nyakundi and Dishon Keroti, sued the Attorney General, the Treasury Cabinet Secretary, the Senate, the National Assembly and the Controller of Budget, arguing that the two funds are illegal and unnecessary.

Within the hour, the Consumer Federation of Kenya filed a separate case, claiming that establishing a limited liability company to run the sovereign fund circumvents oversight and public participation.

Cofek argued that the move amounts to running government functions outside the Constitution.

President William Ruto has previously said he plans to position Kenya at the same level as Singapore, and that the sovereign and infrastructure funds were created to ease the country’s reliance on internal and external borrowing for development.

In court, however, the group led by Dr Magare argued that the infrastructure fund poses a threat to the Equalisation Fund. They also claimed that the Executive Bypassed Parliament in establishing the two funds.

“Parliament (the National Assembly and the Senate) failed in its role by being a bystander while the Executive purports to create an ad hoc public fund. The impugned fund operates outside normal budgetary controls, with reduced parliamentary oversight and accountability,” court documents filed before Justice Bahati Mwamuye read in part.

According to the petitioners, the Kenya Kwanza administration created avenues for private individuals to benefit illegally from public coffers.

“Considering that the current regime is known to be quick to sell public assets, as witnessed in the sale of Safaricom PLC shares and the attempted sale of Kenya Pipeline Company (KPC), it is reasonable to believe that these actions are part of a wider scheme to enrich shadowy figures within government circles for political and economic gain, contrary to the principles of good governance provided for under Articles 1, 3, 10, 73, 75 and 232(1)(e) of the Constitution (2010),” the court papers state.

In his supporting affidavit, Dr Magare said the government has no power to create a private company to manage and spend taxpayers’ money.

He argued that it remains unclear how the shareholding would be allocated or who would oversee or audit the company’s affairs.

In the separate case, Cofek argued that there was no justification for entrusting private individuals with the management of public funds.

The Stephen Mutoro-led lobby said the Treasury CS failed to disclose critical information, including the shareholding structure, identities of private beneficiaries, and governance and profit-allocation arrangements, thereby increasing the risk of misuse of public wealth.

In his affidavit, Mutoro said the Ruto administration had put the cart before the horse, arguing that the two funds are not anchored in law and that there was no public participation before the decision was made.

“Unless this honourable court intervenes urgently, the respondents are likely to proceed with incorporation, appointment of directors and management, execution of contracts and transfer of public resources, thereby creating irreversible legal and fiscal consequences and posing a grave threat to Kenya’s constitutional order, fiscal discipline, debt sustainability and intergenerational equity,” Mutoro argued.

He added that the creation of such parallel funds undermines fiscal transparency, weakens expenditure control and exposes public resources to misuse and hidden liabilities beyond parliamentary oversight.

On November 15, 2025, the Cabinet approved the National Infrastructure Fund with the aim of mobilising at least Sh5 trillion.

However, Cofek argued that public funds can only be appropriated through Parliament and warned that once money leaves government coffers for private entities, it ceases to be taxpayers’ money.

“I am further advised, and verily believe, that once public resources are transferred into a private corporate vehicle, such resources risk losing their public character, constitutional oversight mechanisms become diluted or extinguished, and public access to information, audit scrutiny and accountability is severely constrained,” said Mutoro.

The petitioners want the court to halt the implementation of the funds and the creation of the proposed company pending the hearing and determination of the cases.