A recommendation to prosecute the Anglo-leasing case was based on a report which had been quashed by an order of the high court for being tainted with illegalities, a trial has heard.

Treasury Principal Secretary Dr Kamau Thugge said while making a recommendation for the prosecution of the late former finance minister  Mwiraria and others he relied on a report by audit firm PricewaterhouseCoopers (PwC) in total disregard of the court order quashing the same. 

Thugge based his recommendation on the PwC audit report in 2014, exactly six years after the high court had quashed it in 2008.

Senior counsel Ahmednassir Abdullahi took Thugge to task for disrespecting the high court judgment that had poured scorn on the PwC report at one point asking him if he understood and appreciated the import of a “quashing order.”

The judgment, read partly in court, stated that the PwC report was illegal and had been rendered null and void and that in appointing the audit firm the appointing authority had acted in excess of its powers and usurped the role of EACC by commissioning the firm to do investigations which was solely the purview of the commission.

PwC’s appointment was disputed in court and the judgement made on July 10 2008.

Act of impunity

Lawyer Ahmednassir said Thugges act bordered on impunity for disregarding a court order and going ahead to make recommendations based on the report already quashed by court.

Thugge said on oath that he was not aware that the high court had quashed the report.

“We hired PwC and it came up with a report, we gave information to EACC, we didn’t make a legal judgment whether it was illegal or not, maybe the court had ruled but nonetheless…” Thugge said.

SC Ahmednassir said he was shocked at Thugge’s lack of regard for courts. 

Thugge admitted that he wrote to the DPP, EACC to commence serious action against the listing of all Anglo-leasing contracts based on the PwC report which was pegged on the resolution that the contract(s) be canceled and assets owed be recovered.

Promissory notes

Thugge was again at a loss when confronted with the caveat emptor he had plugged on the promissory notes in regard to the Anglo-leasing contract(s).

He first concurred that the Attorney General Amos Wako had given the notes a clean bill of health regarding their legal validity and he acknowledged special authorisation sanctioned by the minister against their payments.

Thugge was shown and concurred that there was no provision for unqualified revocation of the promissory notes as had been done when the government suddenly turned round and canceled them.

The terms and conditions cited in the promissory notes were unconditional and irrevocable and therefore could not be a subject to a caveat emptor, the witness concurred.

After reading through the promissory notes, Thugge concurred that all are still valid to date and the government of Kenya is obligated to pay Sound Day Corporation, one of the firms in the Anglo-leasing contract(s).

Thugge feigned ignorance that Treasury was unaware of payment of the commitment fee as part of the contractual terms until lawyer Kioko Kilukumi showed him documents to that effect illuminating further the concurrence of Treasury and the Ministry of Finance.