What you need to know:
- Before the agency moved in, the MP allegedly withdrew Sh7.3 billion, disbursed it to various companies and invested a portion in some assets.
In one of the accounts , the MP allegedly received Sh5.83 billion and withdrew Sh5.831 billion, leaving a balance of Sh773,000.
On the list of wealthy industrialists, Mathira MP Rigathi Gachagua hardly features. His billionaire status has been baffling state agencies, which are now seeking to understand how the Mt Kenya politician made his fortune.
The Assets Recovery Agency (ARA) is investigating how Sh12.5 billion passed through Mr Gachagua’s three accounts for seven years and whether money laundering was involved.
Before the agency moved in, the MP allegedly withdrew Sh7.3 billion, disbursed it to various companies and invested a portion in some assets. As a result, the agency could only locate Sh5.2 billion.
The three accounts are being held at Rafiki Micro Finance and ARA has written to the bank seeking clarification on the money trail.
In one of the accounts, the MP allegedly received Sh5.83 billion and withdrew Sh5.831 billion, leaving a balance of Sh773,000.
In the second, a fixed deposit account, he allegedly received a total of Sh827 million and Sh792.9 million left the account, leaving a balance of Sh35 million. It is this money trail that is exciting ARA investigators.
Although Mr Gachagua is a director and shareholder of several companies, which he has used to secure tenders from state agencies, parastatals and county governments, ARA says it wants to establish whether he used them to launder money.
Mr Gachagua may, in the interim, lose Sh200 million, which have since been frozen, to the state if an application by ARA goes through.
In the third, also a fixed deposit account, the MP is alleged to have received Sh5.87 billion and Sh705 million was withdrawn, leaving a balance of Sh165 million when the account was frozen in May.
Court documents showed that Mr Gachagua received a total of Sh347 million from several companies, including Sh112 million from Encarta Diagnostics, Sh7.5 million from Wamunyoro Investments, Sh58 million from Rapid Medical Supplies and Sh103 million from Specific Supplies.
Some of the money was later transferred to the two fixed deposit accounts while he wired Sh12.9 million to his spouse Dorcas and Sh9 million to Toyota Kenya and Taitan Motolink.
The agency investigated a total of 33 accounts associated with the MP and his companies, including Wamunyoro Investments Ltd, Crystal Kenya Ltd, Machine Centre, Technical Supplies and Services Ltd, Skytop Agencies and Specific Supplies Ltd.
The agency said Mr Gachagua and an associate identified as Anne Kimemia, who traded as Jenne Enterprises, were involved in a complex money laundering scheme in collusion with his companies.
Some of the funds were from Kwale and Bungoma counties, which paid Sh112.4 million to Encarta Diagnostics.
Other payments were made from Ministry of Lands (Kenya Informal Settlements Programme), state department for Special Planning, Ministry of Health, Mathira Constituency development funds, Nyeri county government and the National Irrigation Board.
The agency says that on July 15, 2015, Jenne Enterprises received Sh30 million from Rafiki disguised as loan disbursement.
But on the same day, the firm wired Sh28.5 million to Wamunyoro Investment, where Mr Gachagua is a director and shareholder. The documents show Jenne Enterprises also transferred Sh10 million to Wamunyororo Investment on April 3, 2017.
The following day, the same firm wired another Sh5 million to Mr Rigathi’s personal account.
Former District Officer
“There are reasonable grounds to believe that the said accounts received and are holding funds, which are believed to be proceeds of crime and the accounts were used to execute a complex money laundering scheme in an effort designed to conceal, disguise and hide the nature, source, movement and disposition of the funds,” the petition stated.
The agency stated that within the said period, there were massive suspicious cash withdrawals, inter and intra-bank transfers from other accounts to the accounts under investigations and other banks accounts owned by Mr Gachagua in suspicious complex money laundering schemes.
The agency said they received information in March this year of suspected complex money laundering schemes and proceeds of crime.
The agency opened an inquiry and subsequently applied for and was issued with warrants to investigate the accounts.
Further, the documents stated that after being transferred to companies or businesses entities, the funds were ultimately moved to a fixed deposit account, which is the MP’s personal accounts.
A key ally of Deputy President William Ruto, Mr Gachagua is arguably one of the richest MPs in Mt Kenya and follows in the footsteps of his brother, former Nyeri Governor Nderitu Gachagua, who died in February 2017.
A former student leader at the University of Nairobi, he was a close ally of former President Daniel Moi.
As a District Officer in Kiambaa, Mr Gachagua kept the opposition on its toes — if they insulted the President. At one point, Mr Gachagua was Uhuru Kenyatta’s personal assistant when he was the Local Government minister.