Court of Appeal clears Sonko to access Sh537million after ARA loss
The Assets Recovery Agency (ARA) has suffered a legal setback after the Court of Appeal dismissed its bid to continue holding more than Sh537 million belonging to former Nairobi Governor Mike Sonko, funds that had been frozen for over six years on suspicion of money laundering.
In its ruling, a three-judge bench comprising Justices Kathurima M’Inoti, Chacha Mwita and Byram Ongaya declined ARA’s application to suspend a High Court judgment that allowed Sonko to access the money.
The appellate court held that there was nothing to stay, as the earlier decision amounted to a negative order giving Sonko unhindered access to his millions.
“To the extent that the applicant seeks an order of stay of execution against a judgment dismissing its suit, the court cannot issue such an order,” the judges ruled, dismissing the application with costs to Sonko.
ARA had moved to the appellate court seeking to maintain the freeze on the funds as it pursued an appeal, arguing that preservation and seizure orders remained in force pending the determination of the case.
However, Sonko, through his lawyers, opposed the application, stating that the law does not allow the stay of a negative order and that the relevant provisions under the Proceeds of Crime and Anti-Money Laundering Act (POCAMLA) did not apply in the circumstances.
The funds, held in 10 bank accounts in both local and foreign currencies, were frozen in February 2020 after ARA alleged they were proceeds of crime linked to illicit dealings during Sonko’s tenure as Nairobi governor.
However, in October last year, High Court Judge Nixon Sifuna lifted the preservation orders, ruling that ARA had failed to provide sufficient evidence to prove the funds were illegally acquired.
The judge criticised the agency’s investigations as inadequate, stressing that such probes must be “thorough, air-tight and water-tight” given their serious legal implications.
“The evidence on record is insufficient to support the assertion that the funds… are proceeds of crime,” Justice Sifuna ruled.
The court noted that Sonko had offered explanations for the source of the funds, including income from businesses such as matatu operations, nightclubs, restaurants, cyber cafés and real estate.
He also stated that some of the money came from property sales in Kwale and Kajiado.
Justice Sifuna further faulted ARA for failing to verify Sonko’s claims, including property ownership, sale agreements and the identities of buyers. He emphasised that investigators have a duty to present both incriminating and exculpatory evidence.
