LSK boss links Konza focus to new rail deal

Money Markets

LSK chairman Eric Mutua: Deal was approved by the Attorney-General. Photo/FILE 

By GALGALO FAYO

In Summary

• Eric Mutua says the deal between the government and the Malili Ranch Ltd, which he acted for, was approved by the Office of the Attorney-General and maintained the transaction was above board.
• Mr Mutua refuted CID claims that he was unable to account for Sh14.5 million in his account, arguing the cash is client money.
• Mr Mutua claimed police are being used to silence him through the charges. 

Law Society of Kenya chairman Eric Mutua has claimed the release of a letter implicating him in the alleged Malili scandal is meant to derail LSK’s plan to challenge the multi-billion standard gauge rail deal in court.

Mr Mutua says the deal between the government and the Malili Ranch Ltd, which he acted for, was approved by the Office of the Attorney-General and maintained the transaction was above board.

Last week it emerged that Directorate of Criminal Investigation (DCI) had written to the Director of Public Prosecutions seeking prosecution of Machakos Senator Johnstone Muthama, former Information PS Bitange Ndemo and Mr Mutua over a 5,000-acre piece of land transaction that cost the taxpayer Sh1 billion.

“It (recommendation) has mischief in the way it was released. As LSK we are considering to file the suit this week to stop standard gauge railway. Maybe it was meant to derail our plan,” said Mr Mutua at a press conference at the LSK offices on Tuesday.

The DCI said there was a conspiracy to defraud more than 6,000 shareholders of the Malili ranch in a deal where the Government bought the land for Konza Technopolis allegedly without conducting due diligence.

Also recommended for prosecution are former Commissioner of Lands Zablon Mabea, James Waweru, who was at the AG’s office, and three directors of the company.

Mr Muthama is accused of conspiring with Mr Mutua to process fake minutes of an AGM in which the resolutions to sell the land were reached.

Three of the seven directors of the company Julius Kilonzo, Peter Kanyi and Josiah Manuki are to face charges of being core players in the alleged conspiracy and benefiting from the proceeds of the sale according to the letter.

Mr Mutua refuted CID claims that he was unable to account for Sh14.5 million in his account, arguing the cash is client money.

He further produced a court ruling delivered in 2011, in which two directors who are being recommended for fresh prosecution — Mr Kilonzo and Kanyi — were acquitted of alleged criminal offence in the transaction.

In the ruling, the court observed that the “precious judicial time had been wasted on the hearing of trumped up charges against the accused persons to satisfy the whims of some persons superior to the investigating officer”.

The LSK chair testified in the case as a witness.

Mr Mutua claimed police are being used to silence him through the charges.  He produced an affidavit allegedly sworn by Malili treasurer Leonard Kitua, who claims that a CID officer forced him and other company directors to change their earlier statement to implicate him and Mr Muthama.

Mr Kitua, in the affidavit, says that together with other directors of the ranch they accepted to change the statement to disown some minutes and board resolution relating to transaction.

Meanwhile, Mr Mutua, on behalf of LSK, says if the government paid Sh125 billion to two Anglo Leasing companies, they would initiate private prosecution against individuals who committed the country to such payments.