Freedom for Waluke, Wakhungu: Court of Appeal quashes Sh2b fine, 67-year jail terms in Sh313m fraud case
Sirisia MP John Waluke (right) and his associate Grace Wakhungu during a past court session. Waluke and Wakhungu would each have to pay a fine of more than Sh1 billion to avoid jail.
The Court of Appeal has quashed 67-year jail terms imposed on Sirisia MP and his former business partner Grace Wakhungu, who were accused of fraudulently obtaining Sh313 million from a government agency.
The two had been jailed for more than 60 years each, with an alternative of fines of more than Sh1 billion after being found guilty of fraudulently receiving money from the National Cereals and Produce Board (NCPB) for maize that was never delivered.
“Ultimately, we are satisfied that the appellants have made a case to warrant us to allow the appeal. The appeal is accordingly allowed, and the convictions and sentences imposed on the appellants are set aside,” Justices Asike Makhandia and Patrick Kiage said.
Justice Abida-Ali Aroni declined to sign the judgement.
Mr Waluke and Ms Wakhungu said the payments made arose from an arbitration and not a procurement award.
Through lawyer Paul Muite, Ms Wakhungu argued that the award had never been overturned and that what they received was a fraction of the payment.
“There can be no case of fraudulent acquisition arising from an order of the court, which has not been set aside or overturned. If the appellants had gone to River Road and created a fake order, this would be the case,” he said.
He added that the money they are accused of fraudulently acquiring is yet to be paid and although the decree did not specify what amounts were for storage, interest or loss of profit, the entire amount received is less than the loss of profit, part of which was not a subject of the criminal case.
The two and their firm, Erad Supplies & General Contractors, received over Sh313 million from NCPB for fake claims, in an alleged botched deal to supply some 40,000 metric tonnes to the government in 2004.
Mr Muite said after failing to set aside the judgment, NCPB commenced parallel proceedings before the EACC alleging the invoice, upon which the claim for storage costs was made, was forged.
He said Erad Supplies referred the case to arbitration seeking general and special damages for breach of contract. During the arbitration hearing, an invoice of US $ 1,146,000 was produced as an exhibit, to prove special damages plus interest.
The court heard that there were material inconsistencies that undermined the prosecution’s case and maintained that the business transaction was purely commercial and the claims were civil in nature, hence there was no criminal culpability.
“It is clear that what the trial court engaged in was an analysis based on a foregone conclusion or proof beyond reasonable doubt over the charges of uttering. There is no analysis of whether the other counts had been proved beyond reasonable doubt. The judgment, therefore, cannot stand,” Mr Muite said.
He said the trial magistrate relied on evidence from Freddy Chetty who testified that Chelsea Freight had a US dollar account yet he did not produce any evidence or documentation to prove the same.
The court, he added, failed to note the statement from the two directors of Chelsea Freight (Chetty) and Thilogan Pillay were exact word for word, therefore putting into question the creditability of the statement as evidence.
Mr Muite further faulted the trial court for claiming that the two were the only directors of Erad Supplies.
He said the late Jacob Juma, was actively involved in the affairs of the company and the prosecution was trying to create an impression that he (Juma) was not associated with the company.
Mr Waluke and Ms Wakhungu were released on Sh10 million and Sh20 million cash bail respectively, after spending three months in jail for the fraud.
