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Waluke, Wakhungu back in prison, as court upholds Sh2bn fine – Business Daily

Sirisia MP John Waluke (right) and businesswoman Grace Wakhungu. FILE PHOTO | NMG
Sirisia MP John Waluke and his business partner Grace Wakhungu will head back to prison after the High Court dismissed their appeals saying they were properly convicted and the more than 40 years they are required to serve in jail are not excessive.
Justice Sether Maina dismissed the appeals saying the prosecution proved the charges against the duo for fraudulently acquiring Sh313 million from a government agency decades ago.
After carefully considering the evidence adduced and the submissions made, this court comes to the conclusion that the appeals have no merit,” the judge said.
The judge said the two partners have to pay the hefty fines or serve the sentences imposed by chief magistrate Elizabeth Juma.
Both were jailed for more than 40 years each but were granted the option of paying fines in excess of Sh1 billion each, after they were found guilty of fraudulently receiving money from National Cereals and Produce Board (NCPB) for maize, which was never supplied.
Mr Waluke and Ms Wakhungu had appealed saying the payments made arose from an arbitration and not a procurement award.
Their lawyer Paul Muite told Justice Esther Maina that the award had never been overturned and was 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 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 were made was forged. 
He said Erad Supplies referred the case to arbitration seeking general and special damages for breach of contract. During the hearing of arbitration, 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 a 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.



Joseph Muongi

Financial.co.ke was founded by Mr. Joseph Muongi Kamau. He holds a Master of Science in Finance, Bachelors of Science in Actuarial Science and a Certificate of proficiencty in insurance. He's also the lead financial consultant.