Astrol Petroleum Company Limited, FastLane Freight Forwaders Limited, SpringBoard Capital Limited, Mash Logistics, Silverberg Enterprises, Credible Health Centre, Singapore Motors Limited, Reuben Muna and Elvis Exclusive Textile Limited collectively have lost a spirited fight to free monies frozen in their bank accounts in relation to a scam at the Ministry of Public Service, Youth and Gender Affairs.
They have been subjects of an on going investigations by the anti corruption agency, EACC, following allegations of fraud involving public officials at the state department.
Based on findings from investigations, the EACC, sought and was granted preservation orders prohibiting the respondents jointly from withdrawing, transferring or dealing with monies held in various banks accounts in their names.
The order was to subsist for 6 months to enable EACC complete investigations and possibly start prosecution.
Knocking on court’s door
Astrol and FastLane has been knocking at court’s door since January to have the freeze order set aside so that they can access the funds held at Giro Commercial Bank, Equity ban amd NIC Bank, Bank of Africa and Barclays bank.
“The application was premised on grounds that the order freezing the applicants’ bank accounts was unconstitutional, unfair as the said accounts contain funds that are not subject to investigations by the commission,” justice Hedwig Ong’udi who overruled the request said.
Applicants had argued that the said order had incapacitated them.
Caveat on accounts
On February 1, 2017, a supporting affidavit by one James Mwangi Kamau and a further one dated February 13, 2017, was added to the pleadings.
They claimed that the funds paid to Astrol ” were for petrol and diesel supplied at request by a Mr. Kihenya” and that in seeking a freeze order the commission should have only pursued the stated payment instead of pulling a caveat on the firm’s entire account.
‘There is no link between the applicant institution suspected to have swindled public funds…that the applicant is a growing company and its being mentioned or associated with suspected corrupt deals and the freezing of its funds has greatly tarnished its name…” submissions in the pleadings read.
Astrol pleaded that “they are innocent victims and ought not to be treated as an offender.
The judge said there was reasonable suspicion of corrupt conduct by the respondents.
EACC stated in court that the money in question was irregularly and fraudulently transferred to the FastLane’s bank account by the state department.
The respondent did not tender for the services and invoice No. NYS/001/14 dated December 16, 2104, was received six months before it was purportedly awarded a tender…
Justice Ongudi explained that there was reasonable fear of dissipation of monies after FastLane subsequent to receiving the Ksh 209,315,427 from the state Department transferred various amounts totaling to Ksh 79,345,157 hence the freeze order to prevent further loss.
Payment for service not rendered
The money in question was payment for alleged direct clearing costs for the National Youth Service equipment Phase II-2nd which were not rendered.
According to EACC, the Ministry of Public Service, Youth and Gender Affairs did not tender for the provision of the purported services during the 2015-2016 financial year.
“The documentation shows that the respondent(FastLane Freight Forwarders Limited) appears to have sought payment even before the contract was awarded…” justice Ong’udi said.
Findings of the DCI
In rejecting the request to unfreeze, the judge said that the respondent had not furnished “evidence to show that the preserved property was not acquired as a result of corrupt conduct instead they relied on the findings of the DCI (which had absolved them!) but not sufficient to show that the said funds were genuinely acquired.”
She said EACC conducted its own investigations and placed them at the center of the scam.