Ethics & Anti-Corruption Commission v National Bank of Kenya & Geotech Contractors Limited [2017] KEHC 2420 (KLR) | Asset Preservation Orders | Esheria

Ethics & Anti-Corruption Commission v National Bank of Kenya & Geotech Contractors Limited [2017] KEHC 2420 (KLR)

Full Case Text

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

ANTI-CORRUPTION & ECONOMIC CRIMES DIVISION

MISCELLANEOUS APPLICATION NO. 24 OF 2017

IN THE MATTER OF: ANTI-CORRUPTION AND ECONOMIC CRIMES ACT (CAP.65) AND ETHICS & ANTI CORRUPTION ACT (CAP.65A)

-AND-

IN THE MATTER OF: AN APPLICATION BY ETHICS AND ANTI-CORRUPTION COMMISSSION FOR AN ORDER UNDER SECTION 56 OF THE ANTI-CORRUPTION AND ECONOMIC CRIMES ACT TO (CAP.65); SECTION 11(1)(J) OF THE ETHICS AND ANTI CORRUPTION COMMISSION ACT (CAP.65A), TO PROHIBIT THE TRANSFER OR DISPOSAL OF OR OTHER DEALINGS CONNECTED AND/OR INCIDENTAL TO NATIONAL BANK KENYA LIMITED, PORT WAY, MOMBASA BRANCH, ACCOUNT NUMBER 01285118994000:-

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IN THE MATTER OF: SECTION 180 OF THE EVIDENCE ACT (CAP.80)

-BETWEEN-

ETHICS & ANTI-CORRUPTION COMMISSION...............APPLICANT

VERSUS

NATIONAL BANK OF KENYA...................................1ST RESPONDENT

GEOTECH CONTRACTORS LIMITED………..…..2ND RESPONDENT

R U L I N G

1. By an application dated 7th June, 2017 brought under Section 56(3) of the Anti-corruption and Economic crimes Act, the Applicant commission sought an extension of the preservation orders issued on the 13th of January, 2017 for a further period of four (4) months; thereby prohibiting the Respondents, by themselves or through their agents, servants or assigns from transferring, disposing of, wasting or in any way dealing with Bank Account number [particulars withheld] in the name of Geotech Contractors held by Equity Bank, Malindi Branch.

2. The application is supported by the Affidavit of Jacquilline Kimani dated 6th June, 2017 and the Supplementary Affidavit sworn by Taabu Lwanga dated 20th June, 2017. It is based on the grounds that the Applicant has  been investigating allegations of fraudulent acquisition of assets (public funds) by the 2nd Respondent and that the said investigations have established that public funds were irregularly and corruptly acquired by the 2nd Respondent through Bank Account no [particulars withheld]  in the sum of Kshs. 9,735,486. 40/=. The 2nd Respondent is legally bound to explain the basis and circumstances under which it acquired assets including public funds of Kshs. 9,735,486. 40/=. The 2nd Respondent has been invited on several occasions by the Applicant to provide information and explanation and record statement over allegations of corrupt acquisition of said public funds. The 2nd Respondent company has however not provided the requested information nor has it recorded any statements.

3. The application is based on the provisions of Section 56 of the Anti Corruption and Economic Crimes Act (ACECA) and it made reference to the case of Ethics and Anti Corruption Commission v Equity Bank Kenya Limited & Another (2017) eKLR, wherein the Court upheld the principle that investigations on corruption and economic crimes touch on public interest.

4. The Applicants’ relied on the Affidavits sworn by Taabu Lwanga and Jacquiline Kimani and indicate that the ongoing investigations have established that the 2nd Respondent acquired monetary assets through corrupt conduct and is yet to explain the circumstances and basis under which it acquired the sum of Kshs. 9,735,486. 40/=.

5. The Applicant submits that the 2nd Respondent has failed to honor invitations issued by the Applicant on: the 16th of January, 2017; 5th of May, 2017 and 29th of May, 2017 to explain the source of the funds under investigation in her account and has not provided any documentation or recorded any statements.

6. It is the Applicants submission that it has the legal mandate to promptly recover the established unexplained assets acquired by the 2nd Respondent through corrupt conduct if, upon conclusion of the Applicants ongoing investigations, it is established that the 2nd Respondent has failed to satisfactorily explain how it acquired Kshs. 9,735,486. 40/=. The Applicant makes reference to Article 79 and252(1)(a) and(d) of the Constitution of Kenya, 2010 as read together withSection 11(j)of the Ethics and Anticorruption Commission Act and Sections 51, 52, 55 and 56Cof Anti Corruption and Economic Crimes Act in support of this.

7. The Applicant submits that it is reasonably apprehensive that unless the Preservation Order issued on 13th January, 2017 is extended, the Respondents herein may initiate and facilitate a withdrawal or transfer or in any other way, dispose of the funds deposited in the account, to the detriment and adverse prejudice of the state, the general public and the Applicant in the discharge of its statutory duty and constitutional mandate in the fight against corruption and economic crimes.

8. The Applicant submits that public interest consideration requires the Applicant to conduct exhaustive and conclusive investigations in a bid to establish whether or not the 2nd Respondent corruptly acquired Kshs. 9,735,486. 40/=.  It is the prayer of the Applicant that the Court extends the Preservation Order on the 2nd Respondents Bank Account no. [particulars withheld], in the name of Geotech Contractors held at Equity Bank Kenya Limited, Malindi Branch, for a further period of four (4) months pending the conclusion of the Applicant’s exhaustive case.

9. The 2nd Respondents submissions make reference to Section 107 of the Evidence Act, which states:

“(1) Whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist.

(2) When a person is bound to prove the existence of any fact it is said that the burden of proof lies on that person.”

10. The 2nd Respondent also makes reference to Section 109 of the Evidence Act which provides that the burden of proof as to any particular fact lies on the person who wishes the Court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person. It is the 2nd Respondents submission that the burden of proof lies with the Applicant, who is required to prove that public funds were irregularly and corruptly paid into the 2nd Respondents bank account.

11. The 2nd Respondent relied on the cases of Ethics and Anti Corruption Commission v Johncele Insurance Brokers Limited Kisumu Misc. Application No. 178 of 2014andEthics and Anti Corruption Commission v Jimmy Mutuku Kiamba Misc. Civil Application No. 804 of 2014and submitted that the Applicant has failed to produce evidence to the effect that they have made progress in their investigations against the 2nd Respondent. The 2nd Respondent argues that the investigations have been ongoing for eight (8) months and there has been no significant progress, no statements recorded and no significant documentary evidence has been adduced to show that the moneys in the 2nd Respondents account were obtained through corrupt dealings. The 2nd Respondent therefore urges the Court to dismiss the Application as the Applicant has failed to prove their case against the 2nd Respondent.

Determination

12. The issue for determination here is whether sufficient evidence has been adduced by the Applicant commission to warrant an extension of the preservation orders.

13. The Applicant has brought this Application under Section 56 (3) of Anti Corruption  and Economic Crimes Act which provides that:

“An order under this Section shall have the effect for six months and may be extended by the court on the Application of the Commission.”

14. The Affidavit sworn by Jacquilline Kimani reveals that on several occasions, the Applicant has invited the 2nd Respondent to record a statement over issues and allegations of corrupt acquisition of asset.  The Respondent has however not honoured the invitation or provided the requested information, nor has it recorded any statements. Annexed to the affidavits are invitations by the Applicant to the 2nd Respondent on three occasions: 16th January, 2017; 5th May, 2017 and on 29th May, 2017.

15. Although the burden of proof lies with the Applicant recording statement from 2nd Respondent on how the subject assets were acquired is part of the investigation and refusal by the 2nd Respondent to cooperate is partly to blame for the delay in concluding investigations.  The 2nd Respondent ought to have seized the opportunity to avail the evidence that would provide a reasonable basis for the acquisition of public funds from Kilifi County Government, to either the Applicant or to the Court.

16. I have considered the issues and concerns raised by the Applicant find that it fair and just to allow the Commission more time to conclude the investigations currently ongoing. The fight against corruption, including being tried for corruption related acts is a public interest issue; prosecution of those investigated for corruption and economic crimes is undeniably a matter concerning the administration of justice (see DPP vs Nairobi Chief Magistrate’s Court & Another (2006).

17. It is in the interest of justice to determine whether the moneys acquired by the 2nd Respondent from Kilifi County Government were rightfully acquired and whether the 2nd Respondent is culpable of any corruption or economic crime. This can only be determined if the Applicant is given an opportunity to complete its investigations. It is the finding of the Court that the purpose of the investigations will be defeated if this Court fails to grant the orders sought by the Applicant for the extension of the preservation orders.

18. The application dated 7th June, 2017 is therefore found to have merit and is allowed. The applicant is hereby granted a further four (4) months to conduct and conclude their investigation from the date of the expiry of the initial orders granted on 13th January, 2017.

DATED, SEALEDandDELIVEREDatNAIROBIthis3rd day of November, 2017.

L. A. ACHODE

JUDGE