• Gachagua allegedly promised to help a man fulfil a tender for equipment in Bungoma hospitals. Money landed in bank accounts linked to him.
• Assets Recovery Agency investigator said Gachagua presented fictitious company board resolutions n a scheme of classic money laundering.
Image: STAR
Details have emerged of how Mathira MP Rigathi Gachagua talked a man out of Sh123 million by pretending he would help him fund a project.
The project was for the supply of theatre, ICU and maternity equipment to Bungoma county.
In documents filed in court, the Assets Recovery Agency (ARA) says Gachagua promised to help Jim Carter Njagi, a young director and shareholder of Encartar Diagnostics Limited.
Njagi asked for help but instead, documents said, Gachagua used him and his company as a conduit for money laundering to syphon funds from government departments.
ARA investigator Fredrick Musyoki said in the course of his probe, he recorded Njagi's statement. It said that in the 2014-15 financial year, he applied for a tender to supply theatre, ICU and maternity equipment to five health facilities to the Bungoma county government through his Encartar company.
His bank account was at Rafiki Microfinance. He won the tender at a cost price of Sh123 million but had no money to fund the project. He was later introduced to Gachagua by his friend Raphael Nguma. He asked Gachagua to assist him with funding.
“I agreed with Rigathi that he was to introduce me to Rafiki Microfinance where I was to be granted a bank loan of Sh32 million LPO financing using his fixed deposit as a security, meaning I was not giving anything.”
Njagi later opened an account with the bank under his company name and applied for a bank loan of Sh32 million and Rigathi’s fixed deposit as a security of the loan.
Gachagua then directed that for him to stand surety to the bank of Sh32 million, he had to have his own secretary introduced to his company account at Rafiki. That meant taking the bank loan as a mandatory signatory with a mandate for both to sign, meaning he could not transact the account without her.
This was done, and the company performed the work and the county government of Bungoma paid Njagi’s bank in phases, totalling Sh123 million. But when he went to withdraw from the bank, he realised he had no money in the account.
“I went to the secretary of Rigathi, one Juliana Khamunyi, who told me she was instructed by Rigathi to withdraw the money and pay a supplier in Beijing Sh32 million and the transporter Sh6.5 million and others a total Sh5 million.”
He later confirmed that no payment was ever made to the supplier or transporter, as alleged. Even the bank loan was not paid.
On further enquiries from the secretary, Njagi says he discovered that the money was paid to a fixed deposit of Gachagua and also in his personal account. “Gachagua took all the payment of Sh123 million I was paid from Bungoma county,” he says.
The ARA is seeking to have the Sh200 million frozen by the High Court in July last year forfeited to the state, saying it is proceeds of crime.
Court documents show that Gachagua received Sh347 million from several companies. They include Encartar Diagnostics Sh112 million, Wamunyoro Investments Sh7.5 million, Rapid Medical Supplies Sh58 million and Specific Supplies Sh103 million.
Gachagua has since claimed that he is a trustee of the companies. But the agency says Gachagua has not presented any agreements of trusteeship between him and the purported companies or entities for which he alleges to be holding funds in trust.
“The authenticity of the purported board resolutions relied on by Gachagua cannot be verified and are fictitious collections of an afterthought sewed together in a scheme of classical money laundering," Musyoki said.
He reiterated the funds are proceeds of crime which were obtained through deceit and unlawful means.
“Gachagua has not tendered any shred of evidence to show any legitimate means he used to obtain the same. Also, no evidence of the existence of verifiable businesses was presented by him,” Musyoki says.
According to court documents, claims of Gachagua being a trustee of other entities are fictitious since no deed of transfer or any other trustee instrument is presented by Gachagua as per the provisions of Trustee Act and Trustee Rules.
The agency believes the claims are a decoy meant to disguise and hide the source of funds at issue and is a scheme of money laundering.
(Edited by V. Graham)