- Investigator says he received files from Treasury and Office of the President marked "security contract"
- Says Apex and Sound Day companies involved in the contract had no known directors or local representatives
Image: FILE
A witness on Tuesday narrated to court how the government lost Sh 3.8 billion through Anglo Leasing scandal.
Ignatius Wekesa who is the leading investigator from EACC told trial magistrate Felix Kombo of the Anti-Corruption Court that he received several files from Treasury and the Office of the President which had been marked "security contract."
In his second day evidence in chief, the officer said during investigations into some Anglo Leasing contracts they discovered the government had made some payments for goods which had not been supplied.
Wekesa said a company known as Apex was one of the beneficiaries. The late businessman Chamanlal Kamani and his two sons Deepak and Rashmi Kamani, former permanent secretaries Dave Mwangi and Joseph Magari and former Treasury employee David Onyonka denied conspiring to defraud the government over Sh 3.8 billion.
The accused persons are represented by lawyers Kioko Kilukumi, Mohammed Abdullahi, Fred Ngatia and Edward Oonge.
They face charges of conspiracy to defraud the government through the multi-billion shilling Anglo Leasing contracts.
The witness told the court investigations revealed that a company known as Sound Day Corporation which entered a contract with the government to supply police equipment was not registered in Kenya and did not have a local representative.
He said that the directors of the company were not known to anybody in the country.
Wekesa said the address Sound Day had in London could not be located by investigators who toured the UK.
"Although the contract alleged that it was a great agency there is nothing to show that," Wekesa said.
He told the court there was no loan agreement between the company and user ministry but only the suppliers agreement.
The court also heard that the directors of Apex, the alleged company that was to grant the loan, were not known.
According to the witness, Sound Day and Apex were ghost companies."It also emerged that user department had not priced the commodities. The value of the goods were not known," he said.
Wekesa said since investigations started they had collected documents for the contract of modernizing the police.
The witness said the transactions involved the Ministry of Internal Security and Kenya Police as the user department.
Others were the Ministry of Finance, office of AG which gave the legal opinion of both the contract and the contractual money paid through promissory notes, and the Registrar of Companies.
The court heard that the investigating officer recorded statements from key people from the Office of the President who include former security minister Chris Murungaru, his PS David Mwangi, Chief Finance officer John Akili Alawa, the Late Francis Karunya Mwenda( from the finance department), fumbu, Jisuka Mohammed Zala.
From Treasury those who were interrogated over the scandal include the late former Finance Minister David Mwiraria, Ex-PSs Magari, Former Debt Management boss David Onyonka among others.From the AG's office those who recorded statements include Former AG Amos Wako, Deputy AG Dorcas Achapa and Former counsel Dan Ameo.
From Central Bank of Kenya they include Deputy governor CBK Jacinta Atela and John Pichela who is said to have proceed the payments.
In the police depart those interviewed and recorded statements include former commissioners of police Edwin Nyasenda and Hussein Ali, Administrative secretary a Kabera, Deputy Commissioner logistics Levin Mwangi, Chief Armour Arena Orwonye, peter Mathenge, Director of budget Paul Ngugi, Director of public procurement Kenneth Mwangi, Former Auditor General Evans Mwai and his team leader Beson Kariuki who conducted audit on the 18 police security contracts, PS Treasury Joseph Kinyua.
Asked by prosecutor whether Wekesa and his team able to establish how sound day came to work with the government?, he said that during investigations they came across documents at Kenya police department and chief armour of the officers.
"We managed to get documents including a memo that showed there were quotations flouted and Sound Day Corporation was awarded contracts way back in 1993 and there were some contracts entered between the firm and the government of Kenya," said the officer.
He told the court that a memo which they got from the Kenya police it was giving history of how the company came to play.He said that the documents showed that the main contract between the company and the government for supplies of police equipments was signed on May 19,1997.
"It also showed on behalf of Office of the President, former Finance PS Wilfred Kimaru signed the contract agreement while Managing Director of Sound Day Corporation signed on it's behalf," he said.
Wekesa said that the payments were very unique and particular as it was to be paid quarterly and a commitment on the government of Kenya through promissory notes.
He said that the clause on the deliveries of good, equipments and accessories was silent to give on when the supplier a blanket supply.
The witness said there was confusion at the OP on deliveries as there was overlapping on deliveries for a long time since they could not tell which equipment where for which contract."No specific goods for the contract. There was confusion at the Office of the President on deliveries," he said.
During investigation, the officer said they also came across an extract of cabinet minutes for the user of security which allowed the user department supply credit facility for police equipment in 2001. He said that it was difficult to get the signed moment relating to the same.
Wekesa said that he was investigating three matters relating to the Anglo leasing scandal on how procurement started and who started it.
He said that investigation started at Kenya police department and they interrogated former Commissioner of police Hussein Ali who informed them that that they were not aware of modernization contract in question.
He said that investigations revealed that there was no information or letter between Kenya police department and the mother Ministry of Administration.
The police failed to trace the communication between the two over the contract.
The officer produced in court a letter dated October 30,2003 ref no. OP/14/18/1A written to PS Mwangi to MD Sound day Corporation addressed to UK over the the modernization contract. ENDS