• Ex-Managing Director risks a two-year jail term if he fails to pay the fine.
• The long-running case began in 2009
Image: THE STAR
Former Kenya Reinsurance Corporation Managing Director Johnson Githaka has been ordered to pay a Sh15.22 million fine or serve a two-year prison term for embezzling Sh7.2 million.
The Anti-Corruption Court on Tuesday found him guilty of misappropriating the money paid by United Insurance Corporation to Kenya Re.
Githaka's trial has been ongoing since 2009.
"The state has proved the case beyond doubt and convicted Johnson Jackson Githaka for fraudulent acquisition of public property contrary to the Anti-Corruption and Economic Crimes Act No. 3 of 2003," Anti-Corruption Court magistrate Felix Kombo said in passing sentence.
Githaka ordered to pay Sh750,000 or serve one-year imprisonment. An additional mandatory fine of Sh14.5 million, being double the stolen Sh7.2 million, or a year in prison were also imposed. This means Githaka must pay Sh15.2 million or serve a two-year jail term.
In 2005, the Ethics and Anti-Corruption Commission began the investigations against Githaka. The probe established that United Insurance Company was placed under Statutory Management on July 15, 2005, by the Commissioner of Insurance.
The commissioner appointed Kenya Reinsurance Corporation as the statutory manager of United Insurance Company to improve its liquidity.
On September 23, 2005, United Insurance statutory manager Samuel Mueni (an employee of Kenya Re) invited bids from interested buyers for United Insurance Towers along Westlands Museum Hill Road. The building served as United Insurance Company headquarters.
It was eventually bought by PTA Reinsurance Company for Sh242 million. PTA Reinsurance Company paid the initial deposit of Sh24.2 million through Muriu Mungai and Co Advocates on December 23, 2005. A sale agreement was executed on January 4, 2006.
On January 27, 2006, Githaka, then MD of Kenya Re and statutory manager of United Insurance Company, wrote to the law firm, directing it to release a three per cent commission (Sh7.2 million) of the sale’s price to an agent. The agent was not specified. There was no agent in the sale as the process was through competitive bidding.
Investigations show Githaka informed Muriu Mungai and Company Advocates that since he was a board member of PTA Reinsurance Company, who purchased United Insurance Towers, he was entitled to the three per cent commission.
On receiving the money, Githaka bought Nairobi Block 90/298 in Loresho.
The Director of Public Prosecutions in 2009 gave consent to charge Githaka. The offences included the fraudulent acquisition of public property and withholding Sh7. 2 million, being part of the funds realised through the sale of United Insurance Towers.
(Edited by Pamela Wanambisi)