Debt suit: CBK backs bid for larger bench

The Central Bank of Kenya (CBK) has supported a prayer to have Chief Justice Martha Koome empanel a bench of more than three judges to hear a case filed on public debt.

CBK, in its reply, says that the issues raised in the case filed by Busia Senator Okiya Omtatah, activists Nyakina Gisebe and Bernard Muchiri, a Kenyan based in the United Kingdom, Karanja Matindi, and Nakuru-based surgeon Magare Gikenyi are novel and will likely affect all Kenyans; this necessitates more than one judge to hear the case.

="https://www.standardmedia.co.ke/business/business/article/2001490367/broke-government-living-large-ruto-adds-sh3tr-to-public-debt">Others who have

“The outcome of the petition will, in all likelihood, have a direct impact on the Kenyan public, particularly in respect of public finance management and constitutional accountability; and, as such, the weight, sensitivity, and public interest surrounding the petition call for collective judicial thought to establish enduring jurisprudence on the delicate constitutional questions at stake,” the reply filed by Iseme Kamau and Maema Advocates reads in part.

On the other hand, the National Assembly also stated that it was not opposed to having an expanded bench hear the case, but on condition that the case shall be heard by the same judges who are hearing a similar case.

National Assembly’s lawyer, Sandra Nganyi, said that they had filed a case which was before Justices John Chigiti, Roselyn Aburili, and Lawrence Mugambi.

She claimed that they withdrew the case. Nevertheless, according to her, there was another case filed by Shadrack Munyesu, which raised the same issues on public debt.

“Prudent use of judicial time and resources would dictate that the matter be heard before the same bench, as they raise similar issues and seek similar orders. To preserve judicial time and avoid courts issuing conflicting orders, it is in the interests of justice that the petition herein and petition No. E248 of 2023 are heard together,” Nganyi replied.

="https://www.standardmedia.co.ke/national/article/2001515588/court-extends-suspension-of-public-debt-audit-taskforce">Meanwhile, the< Attorney General and the Treasury Principal Secretary want the case thrown out, arguing that the claims are unfounded.

In the case, the petitioners claim that the government borrowed Sh13 trillion, which it cannot account for, nor was the money used to benefit Kenyans or approved by Parliament.

They concluded that former President Uhuru Kenyatta should refund Sh4.6 trillion to the National Treasury and his successor Sh2.5 trillion.

The eight petitioners explained that Uhuru is responsible for the Sh4.5 trillion his administration allegedly borrowed as odious debt between 2014 and 2022.

At the same time, they argued that President William Ruto should equally bear the responsibility for the Sh2.2 trillion borrowed under his watch from 2022 to 2025.

“Petitioners reiterate that these debts were both unconstitutional and unlawful and, therefore, odious because the respondents borrowed the loans, yet they were not included in the Appropriation Acts (national budgets) of the respective financial years approved by Parliament and signed into law by the President, and they were not tied to any public development projects,” court papers read in part.

Also sued are former and current government officials.

They include former Treasury Cabinet Secretary John Mbadi, his Principal Secretary Chris Kiptoo, Director General of the Public Debt Management Office Raphael Owino, Attorney General Dorcas Oduor, Controller of Budget Margaret Nyakang’o, National Assembly, former Controller of Budget Agnes Odhiambo, and former Auditor General Edward Ouko.

Others are former Treasury Cabinet Secretaries Henry Rotich, Njuguna Ndung’u, and Ukur Yatani, Auditor General Nancy Gathungu, Central Bank Governor Kamau Thugge, Ethics and Anti-Corruption Commission, and the International Monetary Fund.

They also included the Senate as an interested party.

In addition, they claimed that during Uhuru’s tenure, his administration raised public debt from around Sh 2.3 trillion.

According to the group led by Okiya, it took Kenya 50 years to accrue the amount.

Court documents also read that the debt accumulation had, by June 30, 2022, hit Sh 6.208 trillion in eight years, contrary to the Constitution.

="https://www.standardmedia.co.ke/national/article/2001516679/uhuru-ruto-cant-explain-sh13-trillion-loan-use-court-told"> Omtatah, Gisebe, According to them, he, too, allegedly engaged in an illegal borrowing spree. They alleged that he first borrowed Sh208 million to buy back the Eurobond notes in June 2024.

They argued that this had already been sorted as a direct charge and consolidated fund.

They also claimed his administration further allegedly borrowed Sh 2.2 million over and above the Sh 884 million allowed by the Appropriation Act 2022, 2023 and 2024.

In addition, court documents read that Kenya Kwanza also borrowed  Sh 50 million ‘ on lent loan’ from the International Monetary Fund (IMF).

They explained that their grievance about the loans was that the two presidents borrowed without following the law, without the approval by Parliament and were not included in the national budget for accountability.

“ The odious debts, including the Eurobonds, amounting to Kshs. 6,950,163,132,328 were unlawfully and unconstitutionally incurred by the Respondents in the period spanning the financial years 2014/2015 to 2024/2025(i.e., up to 30th November 2024),” court papers continue to read.

At the same time, they alleged that all the money was not tied to any development projects.

“There is no evidence that proceeds of these impugned loans were used for the common good. In particular, they were not used for any development projects as required by law,” the five petitioners said.

According to them, in most countries, individuals do not have to repay money that others fraudulently borrow in their name.

 Similarly, they said, a corporation is not liable for contracts that its chief executive officer enters into without the authority to bind the firm.

They are targeting escrow accounts allegedly opened in JP Morgan Chase and Citi Bank arguing that the CBK governor illegally opened the accounts to bypass the Constitution.