• Court rules contract in which two firms were allowed to supply the government with telecommunication equipment for AP in May 2003 was legitimate.
• This means the report prepared by audit firms in relation to the Anglo-Leasing scandal can be used to conduct further investigations.
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A court has put aside orders stopping the government from hiring an audit firm to investigate circumstances surrounding one of the 18 Anglo-Leasing scandal contracts.
The order was put in place in 2008 by then High Court judge Joseph Nyamu.
A five-judge bench of the Appeal Court found no fault with PricewaterhouseCoopers (PWC) or any other agency being asked to verify the goods and services rendered for compliance with the government rules and regulations. The bench also said the Attorney General’s opinion does not exempt contracting parties from compliance with government regulations.
The court also noted that a party cannot be stopped from seeking an opinion in order to prepare its case and that it would be for the tribunal to decide whatever evidence is admissible.
“The impugned judgment made far-reaching findings against the government which were not supported by cogent evidence such that it would be prejudicial to them if they were to proceed to arbitration,” said justices Martha Koome, Hannah Okwengu, Milton Makhandia, Daniel Musinga and Sankale ole Kantai.
This means the report prepared by audit firms in relation to the Anglo-Leasing scandal can be used to conduct further investigations.
Retired judge Nyamu held that one of the Anglo-Leasing contracts - in which English firms Midland Finance and Securities and Globetel Inc were allowed to supply the government with telecommunication equipment for the Administration Police in May 2003 - was legitimate.
The companies had moved to court to challenge a decision by the Finance ministry to hire PWC to conduct forensic investigations in January 2007 to determine whether the contract was ‘corruptly awarded’.
Midland Finance and Securities alongside Globetel opposed the move arguing that the AG gave an opinion sanctioning the contract as lawful.
PWC was contracted to perform forensic investigations to determine whether there had been pricing, financing and other irregularities in the procurement of the contract.
But the companies had claimed that the Kenya Anti-Corruption Commission (now Ethics and Anti-Corruption Commission) had no right to cede its mandate to investigate corruption.
Aggrieved by the ruling, the KACC appealed.
In its decision last Friday, the bench held the view that the contract does not stop the government from verifying whether goods and services rendered were in compliance with regulations.
“We have re-emphasised that there were no criminal charges instituted by the AG against the respondents and their fear was a mere apprehension that did not amount to a threat to their constitutional rights.
“Fear and apprehension not backed by cogent evidence of imminent danger of violation of right is not actionable,” the judges said.
They faulted retired judge Nyamu asking why the orders that were final in nature.
“Even if parties were to proceed to arbitration, the government was already adjudged the wrong party as the judge used very strong words to castigate it and the AG,” the judges noted.
They said the PWC contract was a brief to inform the state first, on whether there was value for money for goods and services alleged to have been supplied, and whether there were irregularities which could lead to either criminal or civil action.
Edited by R.Wamochie