• Kariuki and his two firms charged with tax evasion amounting to Sh41billion, applied to have earlier order to have properties seized reversed.
• Application for restraint should be by the Asset Recovery Agency and an officer can only come in after an order has been received by the agency.
The Director of Public Prosecutions has suffered a major blow after a Milimani court rejected their application seeking to seize assets associated with two companies linked to billionaire Humprey Kariuki.
The two companies, Wow Beverages and Africa Spirits Limited, and their directors are facing charges of tax evasion amounting to about Sh 41 billion.
The court ruled that the DPP and the Directorate of Criminal Investigations obtained an earlier order to trace the assets of the two firms in breach of the law.
“The application has been brought under wrong procedure since it is civil in nature,” magistrate Elector Riany ruled on Wednesday.
The application for restraint should be by the Asset Recovery Agency and an officer can only come in after an order has been received by the agency.
The DPP obtained the orders to trace the companies' assets from Milimani resident magistrate Caroline Nzibe on August 9.
Kariuki and his two companies had earlier filed an application seeking to reverse the orders saying the court erred in granting the application to seize properties of Wow Beverages.
Through his advocate Benjamin Musyoki, the businessman argues that the orders have the effect of shutting down, crippling and thwarting business.
He said the orders were obtained in bad faith, arguing that it is an attempt by the DPP to usurp powers vested in him and is an abuse of a court process, contrary to the Constitution.
DPP Noordin Haji was seeking an order to seize and freeze the properties pending the hearing and determination of the tax evasion case.
He said Kariuki is facing several tax evasion offences and that he has movable properties that he will confiscate and recover should the accused be convicted.
“The properties need to be seized, detained and preserved to ensure that the same is neither removed from the jurisdiction of the court nor disposed of,” Haji said.
Wow Beverages MD Robert Thinji strongly objected the application saying there was no order in force to have the accounts seized on August 9 when the matter was filed under a certificate of urgency.
The court also heard that Haji had been ordered to file an inventory in the court on August 15, an order he did not follow.
“The failure to file an inventory as ordered is intended to hide and conceal the DPP’s act of forging the court orders to freeze Kariuki’s bank accounts and to make it appear that no assets has been frozen,” Thinji submitted.
He further insisted that the orders sought are overboard and aimed at shutting down the tycoon's businesses.
The application was heard on November 13 when Kariuki revealed that it was filed without any legal basis. In October, African Spirits accused KRA of injustice in the closure of its business saying it had left more than 500 people jobless.
Through lawyer Cecil Miller, the liquor firm asked the court to bar KRA and the DCI from "abusing the law which has led to the collapse of its businesses and freezing of accounts".
“This grave miscarriage of justice must stop and this court should grant orders sought,” Miller said.
He contended that the DCI has no mandate to investigate or prosecute tax-related matters as the powers are exclusively vested in KRA.
Edited by R.Wamochie