The Ethics and Anti-Corruption Commission (EACC) has revealed a trail of cash allegedly stolen from City Hall and used in the upgrade luxurious apartments in Nairobi’s Riverside Drive that are owned by former Nairobi Governor Evans Kidero.
The anti-graft agency reveals that part of the loot wired from City Hall through a fake legal contract was sent to the former governor on January 7, 2014 through a company known as Cups Limited, which is associated with Dr Kidero’s past chief of staff George Wainaina.
Dr Kidero, the EACC says, wired his share of Sh14.4 million a day later to Virji Meghji who was involved in construction works at Gem Suites Riverside apartments owned by the former governor and attract rent of Sh540,000 monthly paid in dollars.
The commission has launched a court bid to recover the Sh14.4 million from Dr Kidero and is alternatively seeking one of the apartments to be held in trust on behalf of City Hall.
“In the alternative and without prejudice, a declaration that the plaintiff (EACC) is entitled to trace the aforesaid amount… into serviced apartments (known as Gem Apartments) on land parcel known as LR. No 205/46 within Riverside Area, in Nairobi County and that the 1st defendant holds the property in trust for the county government of Nairobi,” says the EACC in court documents filed at the anti-corruption court.
City Hall is said to have lost Sh58.8 million in the scheme that saw the cash wired to 10 people, and the EACC wants the money refunded or allowed to seize the assets including land and cars of the accused persons.
The EACC says the loss of funds resulted from a case filed by a non-existent company, Kyavee Holdings, against the defunct Nairobi City council over a botched land deal.
The law firm of Wachira Mburu Mwangi & Company Advocates was instructed to represent City Hall and sought millions of shillings for legal fees.
Documents filed in court showed that Sh58 million was paid to the managing partner of the firm, Stephen Mburu, who has since died, as legal fees.
Upon receiving the money, Mr Mburu retained Sh11.5 million then distributed Sh7 million to John Ndirangu Kariuki and Sh15 million to Cups Ltd.
Cups Ltd then sent Sh14.4 million to Dr Kidero, who allegedly transferred the money to Mr Meghji.
Other persons who received the City Hall funds are Paul Mutunga Mutungi, a former councillor, Runa Insurance (on instructions of Mr Ndirangu) was paid Sh10 million and Sh5.5 million to Hannah Muthoni, the wife of Mr Mburu, the lawyer.
EACC’s David Ruto said although Mr Wainaina said he wired the money to Dr Kidero to buy a Toyota Lexus, investigations revealed that the vehicle belonged to the former governor.
The prosecution maintains that all the accused persons conspired to commit an economic crime through a choreographed scheme to siphon public funds.
The EACC says Dr Kidero is faulted for acquiring proceeds of crime and unjust enrichment through the Sh14.4 million payout.
“The legal fee claim was a fraudulent scheme set to defraud the county government of Nairobi as the said fee claim was founded on false claim, by a non-existent company and intentionally filed by an unqualified person with the intention of rendering the suit incompetent,” the EACC says.
Kyavee Holdings, the agency says, claimed to have been allocated land measuring 1.720 hectares for Sh536,667 from January 1968 in Nairobi’s South B area.
The company says it was to develop a four-star hotel but in 1999 the land was allocated to a third party, who developed it.
Kyavee then sued the defunct city council demanding Sh3.1 billion for loss of profits. The suit was later withdrawn, paving the way for settlement of the legal fees.
The prosecution says Kyavee Holdings was a ghost company because the land which was allegedly allocated to it in South B was not available as it had been allocated to Mariakani Primary school.
External auditors had raised questions over the Sh58 million pay to Wachira Mburu and requested that the payment be frozen. Despite the recommendation, City Hall went ahead and paid the money during Dr Kidero’s tenure as governor.
Dr Kidero has a vast real estate business which boasts tenants such as the governments of the United States, the United Kingdom, Sweden, and expatriates.
The former Nairobi governor mostly trades through five companies — Gem Investments, Gem Apartments, Gem Suites, Orro Limited and Argenti Limited — but also personally owns hundreds of acres of land worth billions of shillings.
His land and buildings are estimated to be worth at least Sh9 billion, making him one of Kenya’s wealthiest people.
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