The Assets Recovery Agency has denied claims by Mathira MP Rigathi Gachagua that the Sh200 million they want forfeited to the government are repayment of loans advanced.
In its submissions, the agency says Gachagua and Anne Kimemia of Jenne Enterprises Limited have failed to provide any evidence to show the link between the alleged "loans" acquired or guaranteed and the funds in issue. Kimemia is Gachagua’s close business associate.
The agency submits that the alleged loans are just decoy of money laundering to mislead the court.
“The allegations by Gachagua that they transferred funds from the conduit companies to their accounts to trade with or hold in trust is playful. This is because the companies are legal entities that can enter into agreement with other entities including the shareholders or directors and there is no existence of such agreements between Gachagua and the companies,” the agency says.
ARA says Kimemia’s business entity and account was used as a conduit of money laundering by Gachagua.
It also denied claims by Gachagua that the Sh200 million forfeiture case before court is a political witch hunt.
“We submit that the issue before court is the legitimacy of the funds in issue and whether the same can be forfeited to the state, the issue is not about his political inclination or association,” it says.
Gachagua in his submissions claimed that between 2013 and 2020, he saved Sh200 million at Rafiki Microfinance Bank which was invested in a fixed deposit account.
He says each time money was rolled over, after three months, a new entry of the same sum will be entered in the bank statement thereby creating the misleading impression that the account was holding monies to the tune of Sh12 billion.
The savings, he argues, were essential to enable corporate entities in which he was an investor and shareholder, to access bank loans and guarantee those corporate entities in carrying out business activities.
Gachagua says no crime was committed in having the money paid out for goods and services rendered to the public entities.
He explains his source of wealth to be from loans, government tenders which he says were properly undertaken.
The agency in its application seeks an order declaring that funds amounting to Sh200 million held at Rafiki Bank in the name of Gachagua as proceeds of crime and should be forfeited. The account has since been frozen.
Gachagua however submits he has through documentary evidence shown the source of the monies being sought by the agency. Where the source of funds is a loan from a bank, he has provided concrete documentary evidence backed by the bank. Where the money is paid by the government or other state agencies, the tenders have been disclosed.
“The Sh200 million are not proceeds of crime but are as a result of accumulated payments from legitimate and verifiable businesses done by corporate entities in which I am shareholder and a director. I hold such funds as a trustee of the said corporate entities,” he says.
According to the court documents, the source of funds are well documented in national government, county governments and state agencies records.
The MP in proving the source of funds says in 2015, he received Sh35 million from Bungoma county, Sh30 million from Pan African Tsetse eradication campaign and Sh10 million from KPLC tender among other payments.
The Sh10 million by KPLC was to undertake gravelling of its Nairobi West office and surface water drainage. The value of the said tender was Sh9.96 million.