Ethics & Anti-Corruption Commission v Njehia & another (Anti-corruption and Economic Crimes Miscellaneous E008 of 2022)  KEHC 16386 (KLR) (Anti-Corruption and Economic Crimes) (15 December 2022) (Ruling)
Neutral citation:  KEHC 16386 (KLR)
Republic of Kenya
Anti-corruption and Economic Crimes Miscellaneous E008 of 2022
EN Maina, J
December 15, 2022
Ethics And Anti-Corruption Commission
Peter Maina Njehia
Julie Hellen Matu
1.The Ethics and Anti-Corruption Commission, the applicant herein has filed a notice of motion application under a certificate of urgency dated September 16, 2022. The application is supported by the affidavit of Shadrack Mwenda, an investigator with the applicant, sworn on September 19, 2022.
2.The application is brought under section 56 of the Anti-Corruption and Economic Crimes Act and seeks the following orders:1)Thatthis application be certified as urgent and service thereof upon the respondents be dispensed with in the first instance.2.Thatpending the hearing and determination of this application this honourable court be pleased to extend the preservation order issued on March 3, 2022 prohibiting the respondents, by themselves or through their agents or servants from selling, transferring, granting as security, offering as collateral, disposing, withdrawing, wasting of or any other dealings (howsoever described) with all the shares, deposits and accumulated dividends held At Stima Sacco Society Limited Under membership number xxxx and account number xxxx & xxxx All In the name Of Julie Hellen Matu for a further period of 3 months.3.Thatthe preservation order issued on March 3, 2022 prohibiting the respondents, by themselves or through their agents or servants from selling, transferring, granting as security, offering as collateral, disposing, withdrawing, wasting of or any other dealings (howsoever described) with all the shares, deposits and accumulated dividends held at Stima Sacco Society Limited under membership number xxxx and account number xxxxx & xxxx all in the name of Julie Hellen Matu be extended for a further period of 3 months.4.That there be no orders as to costs.”
3.The application is made on the following grounds stated on the face of it and in the supporting affidavit:1)The Ethics and Anti-Corruption Commission, the applicant herein, is a body corporate established under the Ethics and Anti-Corruption Commission Act, No 22 of 2011(herein after the EACC act) with the mandate to undertake investigation to establish the extent of liability for the loss of or damage to public property and in appropriate cases to institute civil proceedings against any person for the recovery/restitution of such property or for compensation.2.That preliminary investigations revealed that contractors or suppliers to the Kenya Electricity Transmission Company were bribing senior officials including the respondent to facilitate payment to the said suppliers or contractors.3.That it is suspected that some of the bribes and/or funds were used to acquire shares under membership number xxxx and open deposit accounts numbers xxxx, xxxx & xxxx at Stima Sacco Society Limited all in the name of Julie Hellen Matu (2nd respondent) who is the spouse to the 1st respondent.4.That further information received by the applicant reveals that the acquisition of the said shares and deposit accounts may have been used to conceal the nature, source, disposition or movement of funds which the 1st respondent knowingly or reasonably ought to have known forms part of the proceeds of crime.5.That pursuant to section 56 of the Anti-corruption and Economic Crimes Act, No 3 of 2003 and in order to safeguard all the funds held in the listed SACCO accounts and suspected to have been proceeds of corruption the applicant applied to the honourable court for preservation orders which orders were granted and issued on March 3, 2022 for a period of six (6) months.6.The applicant has completed investigations establishing that in the period between January 2010 to March 2021, which period the 1st respondent was suspected of corruption, he acquired assets (in his name and that of associates) in land, motor vehicles, bank deposits, Mpesa credits, investments in Stima Sacco and Unaitas Sacco valued at approximately kshs 278, 049, 855.99 against his known legitimate source of income in salary, travel & subsistence allowances of kshs 40,242,855.99 leaving a disproportion of kshs 237, 806, 769.40 175.7.The commission pursuant to section 26 & 55 (2) of ACECA on April 25, 2022 issued a notice to the 1st respondent to explain the disproportion in his assets with his known legitimate sources) of income.8.The commission received response from the 1st respondent vide a letter dated May 17, 2022 which response was considered and after analysis a cumulative assets of value of kshs 21,432,587.46 was found to have been satisfactorily explained leaving out an unexplained disproportion of kshs 216,374, 181.94.9.The commission on September 14, 2022 issued a demand notice to the 1st respondent to remit the above unexplained wealth of kshs 216,374,181.94.10.The commission pursuant to section 55(2) of ACECA is at the final stage of instituting a suit seeking forfeiture of the above-stated assets of kshs 216,374,181.94 which were acquired at a time the 1st respondent was reasonably suspected of corruption or economic crimes and which assets are in his name and those of his associates.11.The preservation orders expired on September 4, 2022 as the applicant was finalizing the institution of forfeiture suit and the applicant is reasonably apprehensive that the respondent, their agents, servants and/or any other persons may in the intervening period before the forfeiture suit is registered the respondents may withdraw, transfer, dispose or deal with the preserved funds in order to defeat the course of justice, before the applicant commence recovery proceedings, unless the orders sought are granted.12.That it is therefore necessary to prohibit any dealings with the above shares and deposit accounts to obviate a situation whereby the intended recovery / restitution proceedings are compounded or rendered nugatory altogether.13.This honourable court has jurisdiction to issue the orders sought under section 56 of Anti-Corruption and Economic Crimes Act, No 3 of 2003 and the respondents are unlikely to suffer any or any significant prejudice as a result of the “preservation order”
4.The applicant relied further on its written submissions dated October 3, 2022.
5.The application is opposed by the respondent vide grounds of opposition dated October 14, 2022 and List and Bundle of Authorities dated October 14, 2022.
6.The respondent raises 13 grounds of opposition : that the application is incompetent, bad in law in law, misconceived and an abuse of the court process; the applicant has had more than sufficient time to conduct its investigations over the matter and therefore there is no justification to continue freezing the respondents' property; the reasonability test necessary for grant and extension of preservation orders is no longer tenable since the applicant has had enough time to dispel its suspicions; the applicant has failed establish a causal link between the property in question and any alleged corrupt conduct or any illegitimate means of acquisition; the applicant has failed to meet the legal threshold of reasonable suspicion to necessitate extension of the preservation orders; in spite of previous extensions, the applicant has not provided any proof to show that it has made significant progress in the investigation of the matter; he who relies on the existence of facts which he asserts must prove that those facts exist; whereas preservation orders are necessary for the applicant to carry on with its statutory obligation to continue investigate the allegation of corruption, investigations are a part of a fair hearing and should be attended to with fairness and expedition; preservation orders cannot be extended in perpetuity; the freezing orders are now bordering on an infringement on the respondents' right to property and the respondent continues to be economically devastated on unconscionable suspicions that the applicant has failed to prove; the application as drawn and instituted is draconian since the preservation orders sought to be extended have exposed and will continue to expose the respondent to untold and undue suffering and hardship that outweigh having the funds in the respondents bank accounts transferred or concealed; the application for extension of the preservation orders is unjust, oppressive and unjustified and is an attempt to condemn the 1st respondent before a verdict of guilt is passed by this court; the said application is being used to stifle legitimately acquired investments to the peril of the respondents; the application lacks merit and as such an abuse of this honourable court's process and should be dismissed summarily with costs to the respondents.
Analysis and Determination
7.I have considered the application, the grounds thereof, the supporting affidavit, the grounds of opposition, the submissions and authorities filed by the applicant and respondent and the law.
8.The singular issue arising for determination is:
9.The law on extension of preservation orders is stated under section 56(3) of the Anti-Corruption and Economic Crimes Act as follows:
10.The applicant’s position is that they instituted forfeiture proceedings in HCACECS E033/2022 EACC v Peter Maina Njehia and Anthony Njehia on September 23, 2022; That although the suit was filed contemporaneously with an application for an injunction, the assets subject of this application were inadvertently left out and are therefore not conserved in the interim. They seek therefore that the preservation order of this court issued on March 3, 2022 in respect of the assets be extended for a period of 3 months.
11.From the supporting affidavit of Shadrack Mwenda dated September 19, 2022, it is apparent that the applicant had as at that date made great strides in the completion of investigations. Indeed, in their written submissions, the applicant had by September 3, 2022 filed a forfeiture application in which the assets subject of this application are directly and substantially in issue. There is a high risk therefore, that should the orders sought be denied, the assets could be sold, transferred, used as collateral or wasted prior to the determination of the forfeiture proceedings hence rendering the proceedings nurgatory.
12.This court is alive to the respondent’s concerns that prolonged preservation of their assets may occasion injustice. However, the right to fair trial is a double edged sword and the respondent’s rights must be balanced against the public interest. Should the shares be transferred, encumbered, sold or wasted pending the determination of the forfeiture proceedings, the same would be rendered a mere academic exercise. The court refers to the decision of the court in the case of Ethics & Anti-Corruption Commission (EACC) v Lydia Ngini Lentinina  eKLR
13.In my view, the applicant having instituted the substantive forfeiture suit in HCACECS E033/2022 EACC v Peter Maina Njehia and Anthony Njehia as of the date of this Ruling, this is sufficient ground to support a finding in their favour. Accordingly, I would allow the application and extend the orders for a period of three (3) months as prayed. Costs shall be in the cause.
SIGNED, DATED AND DELIVERED VIRTUALLY THIS 15TH DAY OF DECEMBER 2022.E. N. MAINAJUDGE