A microfinance bank has moved to court to defend Mathira Meber of Parliament Rigathi Gachagua from state agency seeking to recover Sh202 million suspected to be proceeds of corruption.
Rafiki Microfinance Bank Limited has asked the court to enjoin it in the case so it can argue its case in defense of Gachagua and his business associate Anne Kimemia trading as Jenne Enterprises Ltd.
Through lawyer Henry Macharia, the bank says it stands to lose Sh170 million should the court allow the application by Asset Recovery Agency (ARA) to have the money in Gachagua’s account forfeited to the state and wants to be enjoined in the case as interested party.
“The bank has been holding the money as security for various credit facilities advanced to third parties, who have already defaulted in repayment, which means the bank will suffer irreparable losses should the forfeiture orders be issued,” the bank said.
According to the bank, Gachagua used the money in his personal accounts, which ARA seeks to seize to guarantee third parties more than Sh295 million the bank is entitled to recover from him.
The bank’s Head of Special Assets and Debt Recovery Richard Murage swore that the money in Gachagua’s account should not be declared as proceeds of crime since they had a stake in recovering the loans.
In an affidavit, Murage said that between August 2014 and June 2019 they loaned Sh295 million to Encartar Diagnostics Limited and Rapid Medical Supplies Limited, which was guaranteed by Gachagua using money that was at the bank’s fixed deposit account.
“The third parties have defaulted repayment and are in arrears totalling Sh170 million as at January 31, 2022, which amount continues to accrue. We are apprehensive that the court will issue an order of forfeiture and make us lose the only collateral we have to recover our money,” he said.
ARA is pursuing Gachagua and his associates to forfeit the money to the state arguing that it was acquired through money laundering and corrupt practices.
According to ARA, Gachagua’s three personal accounts conducted a series of huge suspicious debit transactions amounting to Sh7.3 billion and a total credit of Sh12.5 billion between 2013 and 2020, which they believe are proceeds of crime. Out of the huge bank transactions, the agency claimed the MP and his business associate could not explain how they acquired a total of Sh202 million.
One of the accounts registered in Gachagua’s name at Rafiki Micro Finance Bank has Sh165 million, the other Sh35 million, and the third has Sh773,228 while the fourth account under the name of Jenne Enterprises has Sh1.1 million.
The Informer had established that most of the monies in question were traced back to at least four counties; Nyeri, Kisii, and Kwale counties, Mathira National Government-CDF, Tana Athi River Development Authority (TARDA), Ministry of Housing and Urban Development and the State Department of Environment.
However, the fiery politician has in the past been on record dismissing the allegations as far-fetched political witch-hunt.
Detectives unearthed a trail of cases where loans were purportedly acquired to cover up for funds received from government entities.
“However, these loans have been used to cover-up for funds received from government departments or inter-company transfers in a bid to conceal the ultimate beneficiaries of funds.” A preliminary investigation report says in part.
According to detectives, it was difficult to ascertain whether the companies made any supplies to some counties as the bank accounts made minimal or no payments to suppliers, which is normal for any transaction.
The detectives also raised the possibility of the lawmaker using kick-backs or payments to influence award of lucrative tenders in counties, particularly in Nyeri.
One of the companies of interest is Asoma Enterprises, which is owned by a salonist, Julia Muthoni Mwangi, who was an employee of Gachagua at his Ellison Hair dressing based at the Anniversary Towers in Nairobi.
Muthoni also opened a cleaning company, Klinshine Limited, which used to clean Gachagua’s office.
Asoma Enterprises won several tenders in Nyeri county government including upgrading Thungari dispensary bridge road, upgrading of Karafani-Gatome road, and installation of culverts at Charity-Manooro Road, among many others.