Kamani brothers, ex-PSs back in the dock over Sh3.5b Anglo Leasing case

Businessmen Deepak Kamani, his brother Rashmi Kamani and three former Permanent Secretaries have suffered a major blow after the High Court quashed their acquittal in the Sh3.5 billion Anglo Leasing scandal.

Yesterday, Milimani Anti-Corruption Court set aside the January 19, 2024, acquittal of the Kimani brothers and former PSs Joseph Magari (Finance), Dave Mwangi (Provincial Administration), David Onyonka (Home Affairs).

Judge Benjamin Musyoki ordered all accused persons to be put on their defence for five charges of corruption relating to the procurement of security equipment worth multi-billion shillings from abroad.

“I hereby set aside the acquittal by the trial Magistrate of January 19, 2024, and order the accused persons be put on their defence on counts 2, 3, 4, 6, and 7,” Justice Musyoki ruled.

The court found that the Director of Public Prosecutions had established a prima facie case showing the project, which involved supply of security equipment, was irregularly authorised by the PSs and former Interior Minister Chris Murungaru, without any budgetary allocation.

“There is a letter dated December 5, 2003, in which the former PS of Finance, at paragraph three, suggested that there was no budget for the project and was seeking to utilise supplier credit arrangement. In my opinion, that meant there was no appropriation for the credit financing for that year,” the judge noted.

Justice Musyoki also pointed out that although the contract was signed on December 2, 2003, there was no involvement or consultation with the National Police Service, the intended beneficiary, or then Police Commissioner Edwin Nyasemba, who was not even called to testify.

The court criticised the prosecution for failing to call key witnesses, including former Interior Minister Murungaru, to explain whether the agreement he executed had been budgeted for. 

Despite this, the judge faulted Murungaru himself for failing to provide proper policy guidelines once the contract received approval from the then Attorney General.

The judge was particularly concerned about the payment trail of the funds. Though the supplier was Sound Day Corporation, the payment was made not to it, but to Apex Finance Corporation, an offshore company linked to the Kamani family.

“The money was not paid to the supplier, but to Apex Finance Corporation... Apex was not a party to the contract, although the contract provided that the money was to be paid to its account,” the judge said.

“Apex did not, on the face of the evidence, provide any service at the receipt of the same money. It must be explained, especially when it comes from government funds.”

He added that Kamani brothers must explain why they received Euros 1.2 million (Sh190 million) from the transaction, noting they had previously denied links to Apex Finance, registered in Mauritius on January 8, 1998.

“There is evidence that Kamani's were directors of the company when it was incorporated in Mauritius... There are also declarations of trust dated October 13 2001 by shareholders of Apex showing that they held the shares as nominees of the respondents.

The judge dismissed the Kamani brothers’ claim of ignorance regarding Apex, stating: “No person is better placed to answer those issues than the respondents. They must convince the court that they were not aware and did not have reason to believe that the money was improperly transferred to the account, to which they were linked.”

The court heard that Sound Day Corporation and Apex Finance, both tied to the Kamanis, were single-sourced by the Government of Kenya to supply security equipment for the Kenya Police Forensic Laboratory. 

However, there was no evidence that the equipment was ever delivered. The judge further noted that the contract was signed on behalf of the supplier by one Brian Mills, a key person of interest who was later removed from the proceedings by the DPP without explanation.

Despite these findings, the judge acquitted all accused of the charge of conspiracy to defraud the Government of Kenya Euros 40 million (about Sh3.5 billion), citing insufficient evidence.

“No evidence was tendered by the prosecution to show that the five met and agreed to defraud the government the colossal sum,” he ruled.

The five accused persons are now required to appear before the Milimani Anti-Corruption Chief Magistrate’s Court to present their defence.