Rafiki Microfinance Bid to Save DP Gachaguas Sh200m Fails

An appeal from Rafiki Microfinance Bank to block the forfeiture of Sh202 million belonging to Deputy President Rigathi Gachagua to the government, pending appeal has been dismissed. The Court of Appeal dismissed the lender’s application, saying the application was unnecessary because there are safeguards in law for the preservation of the money before an appeal is determined.

Mr Gachagua was instructed to forfeit the funds by High Court judge Esther Maina in July after ruling that the Deputy President failed to explain how he made the money. The lender wanted a temporary order blocking the Assets Recovery Agency (ARA) from seizing the money pending the conclusion of the appeal.

“In view of the foregoing, we reach the inescapable conclusion that the applicant’s motion is unwarranted, having been made in disregard of section 92(6) of the Act which, in our view, provides statutory safeguards pending appeal,” said Justices Kathurima M’Inoti, Imaana Laibuta, and Mwaniki Gachoka.

The bank in an affidavit of the legal manager Helen Nyaboke said the money is a security that guaranteed several loans by third parties.

She added that ARA has been demanding the amount to be remitted and even threatened to institute contempt proceedings against the bank in case the money is not released. But the judges said the application is a plea to the court to order the State agency to obey the law.

The funds are held in four accounts with one holding Sh165 million, a second account holding Sh35 million, and the other holding Sh773,228.

All three are registered in Mr Gachagua’s name while a fourth account, holding Sh1,138,142, is registered in the name of Jenne Enterprises.

“I have carefully considered the evidence on record including affidavits, annexures and submissions by all parties and I am satisfied that the funds are liable for forfeiture to the government,” the judge said.

Justice Maina said the ARA had proved that the MP and his companies benefitted from funds yet did not deliver any goods or provided any services to the ministries or agencies, which gave tenders to him.

The court also dissolved claims by Mr Gachagua that he put the money in fixed deposit accounts and loaned to some of his companies to earn interest. The former Mathira MP claimed said he moved the funds between his savings and fixed deposit account and vice versa, to earn interest.