Sirisia Member of Parliament John Waluke and Grace Sarapay Wakhungu have defended the Sh297 million their company received from the National Cereals and Produce Board (NCPB) yesterday, calling it legal.
Wakhungu informed High Court Judge Esther Maina that the money was not received in a fraudulent manner as the State claimed.
He further said the payment was lawful since it resulted from the NCPB’s violation of contract to furnish 40,000 metric tonnes of corn.
“The payments of the money received by the appellant were pursuant to a High Court decree issued approving and adopting an arbitration award. Payments such as this cannot, in law, form the basis of a criminal charge of obtaining money fraudulently,” said Wakhungu.
Erad Supplies Ltd, a firm she co-owned with Waluke had been given the contract in 2004.
Sentence to prison, Wakhungu stated the conviction was erroneous and the trial lacked legal grounding while appealing her 67-year sentence.
Earlier the court heard that the Sh313 million payout was lawful after an arbitrator ruled in favour of their company – Erad Supplies Limited.
Appearing before Justice Esther Maina, Elisha Ongoya opened Waluke’s case by giving a chronology of events that started in 2004, following a shortage of maize in the country, which led to the corruption scandal.
“The monies were paid out of court orders and paid following the due process of the law. The payment was made pursuant to an arbitration award,” Ongoya said.
Waluke’s lawyers admitted that he pocketed Sh50 million from the fraudulent maize supply deal at the NCPB 18 years ago.
However, the lawmaker wondered why the trial court ordered him to pay twice the amount lost (Sh297 million) yet he received Sh50 million.
The status of the balance of the money is unknown, though it was received by their trading company, Erad Suppliers and General Contractors Limited.
“The money was received by Erad and not Waluke. It is admitted that both Waluke and Wakhungu were directors of Erad. Out of the decretal amount that was received, Wakhungu received Sh40 million while Waluke got Sh50 million,” said lawyer Ongoya.
The state agency had breached a contract for the supply of maize which resulted in the arbitrator making an award of Sh313 million on account of loss of profit and storage costs due to Erad.
The decision was challenged at the High Court but no order was granted to set aside the award. The matter is currently pending at the Court of Appeal.
They say there was no evidence to prove they received the money.
The duo was in June 2020 convicted of fraud involving Sh313 million in shady maize dealings with the NCPB.