[2022] KEHC 10002 (KLR)

Njehia v Ethics and Anti-Corruption Commission (Anti-corruption and Economic Crimes Miscellaneous E028 of 2021) [2022] KEHC 10002 (KLR) (Anti-Corruption and Economic Crimes) (14 July 2022) (Ruling)

Neutral citation: [2022] KEHC 10002 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Anti-Corruption and Economic Crimes

Anti-corruption and Economic Crimes Miscellaneous E028 of 2021

EN Maina, J

July 14, 2022

Between

Peter Maina Njehia

Applicant

and

Ethics and Anti-Corruption Commission

Respondent

Ruling

Introduction 1. Before the Court for determination is the application dated December 6, 2021. The Applicant seeks the discharge or variation of the preservation orders issued on November 30, 2021 in Misc. Application No. E040 of 2021 in respect of the following Sacco and Investment Accounts:i.Account No.s XXXXX and XXXXX held at Stima Sacco Limitedii.Account No.s XXXX, XXXX, XXXX and 1001538566 held at Unaitas Sacco Limitediii.Account No. xxxxxxxxxxxx held at Unaitas Sacco Mununga

The Applicant’s Case 2. The grounds for the application are that:1. Thaton November 30, 2021, the High Court issued an Order in Miscellaneous Application No. E040 of 2021, the Ethics and Anti-Corruption Commission vs Peter Maina Njehia, prohibiting the Respondent from transferring or in any other way dealing with the funds held in the Sacco and Investments Accounts: Account Nos. xxxxx & xxxx held at Stima Sacco Limited Account; Account Nos. xxxx, xxxx, xxxx & xxxx held at Unitas Sacco Limited; and Account No. xxxxx held at Unitas Sacco Mununga.2. Thatthe Respondent in their Application did not adduce any cogent evidence to justify the said Order prohibiting the Applicant herein, from accessing his said Sacco and Investment accounts3. Thatthe allegations of corruption levelled against the applicant are speculative, misrepresentation of facts, baseless, imaginary, misguided and false information.4. Thatthe alluded suspicion by the Respondent is not reasonable and does not follow the factual basis which would make any suspicion formed at either the time of application for the said prohibition order or at the present. Further, reasonable suspicion must be based on existent facts and not mere imagination or malice.5. Thatthe Applicant’s wealth is legitimately acquired.6. Thatthe aforesaid order was issued ex-parte, without hearing the Applicant.7. Thatthe Applicant’s right to hearing before a decision is made is a basic right which cannot be taken away. Further, as a principle of natural justice, no one, including the Applicant, should be condemned unheard.8. Thatthere is no causal link between the alleged corrupt conduct and the money in the said Applicant’s accounts.9. Thatthe Applicant’s Sacco and investment accounts have been frozen which has occasioned inordinate injury to him and his family as he is the bread winner in his family.10. Thatthe Applicant has established a prima facie case as the said investigation by the Respondent is not anchored on any cogent evidence and amounts to an affront to his fundamental rights and the freedoms including the right to be heard.11. Thatthe Respondent filed Misc. Applications No. E028 OF 2021 which involves investigations by the Respondents in respect of the Applicant’s Bank Account Number XXXX held at Equity Bank Limited and Bank Account Number xxxx held at Kenya Commercial Bank. Further, both of the aforesaid Application involves similar issues between the same parties. Accordingly, it is meet for both Applications to be consolidated and heard together.12. Thatpublication of prejudicial information to the Applicant in these proceedings and investigations of the Respondent is contrary to the Rule on subjudice and an affront to the Applicant’s right to fair hearing as enshrined in Article 50 (1) & (2) (a).13. Thatit is in the interest of justice and fairness that this Honourable court grant the orders sought herein.

3. The application is supported by the affidavit of Peter Maina Njehia sworn on December 6, 2021 in which he avers that the respondent’s investigation is an attempt to malign his name. He deposes that he has been in employment for over 20 years; that in his current post as the Senior Manager – Supply Chain at the Kenya Electricity Transmission Company (KETRACO) he earns a salary of Kshs. 357,150. The applicant avers that he has legitimately acquired the shares and dividends in the subject accounts over a long period of time; That the shares and dividends in Account No.s xxxx, xxxx and xxxx held at Unaitas Sacco Limited are registered in the name of his late wife Julie Hellen Matu (deceased) who died on January 25, 2021 and her shares have never been transferred to him. The applicant contends that his appointment was above board following a competitive recruitment process including interviews and background checks and that all of his properties were lawfully acquired. With regard to the respondent’s assertion that he did not follow the law governing the procurement process at Kenya Electricity Transmission Company (KETRACO), he deposes that the purchase of the property in question namely Land Title No. Baringo/Kapropita/299 for Kshs. 5,873,855 was approved by the tender committee hence all requisite rules were followed and the purchase was above board.

4. In the submissions dated January 27, 2022 and highlighted on May 17, 2022, Mr. Muoki learned Counsel for the applicant cited the case of the Ethics & Anticorruption Commission v Moses Kasaine Lenolkulal [2019] eKLR specifically paragraphs 36, 38 and 45 to support his submission that the Commission merely alleges that the respondent was engaged in fraudulent activities without pointing out any facts hence the Commission has not established a causal link between the applicant’s funds and the alleged corrupt practices and it should not be allowed to have the subject accounts frozen based on a single financial transactional deal. On the issue of financial hardship, Counsel for the applicant submitted that the applicant is not able to access his salary which he receives from his Kenya Commercial Bank Account No. xxxx which is the subject of freezing orders in E039 of 2021 that forms part of the current consolidated files.

The Respondent’s Case 5. The application is vehemently opposed through the replying affidavit sworn by Shadrack Mwenda, on February 11, 2022. He deposes that pursuant to its investigative mandate under Sections 2 and 55 of the Anti-Corruption and Economic Crimes Act, the respondent launched investigations on corrupt practices by the applicant and found reasonable cause that there was disproportionality between the applicant’s assets and his known legitimate sources of income. As a result, the respondent sought and obtained freezing orders over the subject accounts held at Stima Sacco Limited, Unaitas Sacco Limited and Unaitas Sacco Mununga. That the preservation orders were validly and legally obtained under Section 56 of Anti-Corruption and Economic Crimes Act. Further that the preservation application identified the applicant as a public officer and specified the offences he allegedly committed namely embezzlement of public funds, procurement irregularities, bribery, abuse of office and collusion. The deponent states that the applicant illegally and irregularly engaged in the influence and award of tenders, procurement and payment for goods and services in a manner constituting abuse of office and corrupt practices. Further that in collusion with close associates and companies associated with the Applicant, he engaged in corrupt conduct by knowingly acquiring interests in contracts emanating from and connected to his employer, Kenya Electricity Transmission Company (KETRACO).

6. Mr. Nyoike, learned Counsel for the respondent cited the case of Emmanuel Suipanu Siyanga v Republic; Criminal Appeal 124 of 2009 [2013] eKLR in which it was held that “to prove reasonable suspicion, it must of necessity be recognized that reasonable suspicion never involves certainty as to the truth. Where it does, it ceases to be suspicion and becomes fact.” Counsel explained the facts establishing reasonable suspicion as: The applicant, a public procurement officer was being investigated by his employer and the Commission established that a contractor had deposited funds in an account belonging to the applicant’s spouse. Further, a search conducted at the applicant’s residence pursuant to warrants issued in Misc. Criminal Application No. E02450 of 2021 yielded Kshs. 1, 020,000 which is not an amount most Kenyans keep in their houses. Counsel submitted further that the applicant is in possession of assets that are disproportionate to his income hence the evidential onus applies and the Applicant has not discharged the same. Counsel stated that the Applicant has not shown why such funds were found in his house or why the contractor, Sieyuan Electric Company Limited deposited Kshs. 2,200,000 in his wife’s Account No. xxxx held at Bank of Africa opened specifically for that purpose and which funds found their way into the impugned savings and investment accounts. Counsel stated that the applicant was in possession of various tender documents including one of Sieyuan Electric Company Limited dated September 28, 2014 relating to tendering for Olkaria-Lessos-Kisumu Transmission lines construction project (Lot 3: Substation Works).Counsel contended that the applicant earned a net salary of Kshs. 35,764,757. 92 and allowances of Kshs. 4, 478,098. 07 between February 2010 and March 2021 yet in the same period he acquired about 40 properties in Nakuru and Nairobi Counties and over eight motor vehicles registered in his own name and those of his associates. Counsel opposed the prayers for variation and discharge of the preservation orders as investigations have been concluded and the relevant notices sent to the applicant.

7. Counsel placed reliance on the case of Ethics and Anti-Corruption Commission v Njage Makanga & 2 others[2017] eKLR and submitted that one must demonstrate that they are undergoing financial difficulty. Counsel submitted that the applicant is still earning a salary, is engaged in business and is collecting rent and because those funds have not been affected by the preservation order, he is not undergoing financial hardship warranting the variation of the orders. To support that submission Counsel placed reliance on the case of Ethics & Anticorruption Commission v Catherine Nkirote Maingi & 2 others [2017] eKLR. Counsel stated the Applicant has also not demonstrated that the preservation orders have caused undue hardship that far outweighs the risk of the subject funds being concealed or transferred.

Analysis and determination 8. Having considered the application, the response thereto, the submissions of the respective parties and the authorities cited, these are the issues arising for determination:

i. Whether there are good grounds advanced by the applicant to discharge or vary the preservation orders issued by this court on 30th November 2021. 9. The application is premised on Section 56 of the Anticorruption & Economic Crimes Act which relevant part provides as follows:“56. Order preserving suspect property, etc.…(4)A person served with an order under this section may, within fifteen days after being served, apply to the court to discharge or vary the order and the court may, after hearing the parties, discharge or vary the order or dismiss the application.(5)The court may discharge or vary an order under subsection (4) only if the court is satisfied, on the balance of probabilities, that the property in respect of which the order is discharged or varied was not acquired as a result of corrupt conduct.”

10. It is clear from the above section that the same only applies to property that is reasonably suspected to have been acquired as a result of corrupt conduct. Once a preservation order has been granted however the onus is upon the applicant to prove that the funds in the subject accounts were not acquired unlawfully. The applicant claims claimed that the Ethics and Anti-Corruption Commission obtained the preservation orders through misrepresentation and misinterpretation of facts and a lack of understanding of the procurement process. However, he has not demonstrated the facts which he alleges were misrepresented and how the said facts would have been material to the decision-making process of the court regarding the said orders. The Ethics and Anti-Corruption Commission /Respondent established on a balance of probabilities first, that the applicant’s employer was conducting investigations on his conduct and procurement irregularities. The Ethics and Anti-Corruption Commission /Respondent claims to have established through its own investigations that contractors and suppliers of Kenya Electricity Transmission Company (KETRACO) were bribing senior officials including the applicant to influence the award of tenders in their favour and to facilitate payment to the said suppliers. The Ethics and Anti-Corruption Commission /Respondents case against the Applicant is that during the period in issue he acquired assets that far outweigh his known and legitimate source of income. In his application, affidavit and submissions, the applicant emphasized that there is no nexus between the subject accounts and the corrupt conduct complained of. However, he did not explain the lawful origin of the funds in the subject accounts, specifically those allegedly in his late wife’s name which he claims have never been transferred to him. The applicant has not rebutted the respondent’s assertion that money was deposited by a contractor by the name Sieyuan Company Limited into his late wife’s accounts and was eventually transferred to his subject accounts.

11. As stated by the respondent, the legitimacy of the sources of the funds is a matter that is best left to the main recovery suit.The allegation that the Applicant has unexplained assets which he has under-declared over time also warrants further interrogation by this court at the main suit in which forum the applicant will have an opportunity to discharge the evidential onus cast upon him of explaining the source of funds. For now, I am not satisfied on a balance of probabilities that the property was not acquired as a result of corruption to warrant discharge of the preservation orders. The application is accordingly dismissed with an order that costs shall be in the cause.

SIGNED DATED AND DELIVERED VIRTUALLY THIS 14TH DAY JULY, 2021. E. N. MAINAJUDGE