The respondents and four others were charged in the trial court with seven main counts and one alternative count related to a contract between the Government of Kenya and an entity called Sound Day Corporation which was described as Supplier’s Credit Contract Agreement for the Modernisation of Police Security Equipment and Accessories. Chagres against three of the ten were withdrawn on grounds that they could not be reached while two died during the trial.
The charges the respondents faced were as follows;
Count 1- against all the respondents
Conspiracy to defraud contrary to Section 317 of the Penal Code Chapter 63 of the Laws of Kenya whose particulars were that between 30 th October 2003 and 14 th April 2004 in Nairobi within the Republic of Kenya conspired with others not before the court to engaged in a scheme to defraud the Government of Kenya of Euros 40,000,000 through a purported Supplier’s Credit Contract Agreement for Modernization of Police Security Equipment and Accessories for Kenya Police Department dated 17 th December 2003.
Count 2- against the 4 th and 5 th respondents
Fraudulent acquisition of public property contrary to Section 45(1)(a) as read with Section 48 of the Anti-Corruption & Economic Crimes Act, 2003 with particulars that on or about 14 th April 2004 in Nairobi within the Republic of Kenya jointly with others not before court and being beneficial owners of the assets in J. Henry Schroder’s Bank A.G, account No. 602 – 439 Switzerland in the name of Apex Finance Corporation Ltd and Apex Finance International Corporation Ltd fraudulently acquired public property, to wit, Euros 1.2 million from the Ministry of Finance of the Republic of Kenya by purporting to finance a project known as Modernization of Police Security Equipment and Accessories of Kenya Police Department.
The alternative count to this was dealing with suspect property contrary to Section 47(1) as read with Section 48 of the Anti-Corruption & Economic Crimes Act, 2003. The particulars were that, on various dates between 16 th April 2004 and 29 th August 2005 in Geneva Switzerland jointly with others not before court and being beneficial owners of the assets in J. Henry Schroder’s Bank A.G, account No. 602 – 439 Switzerland received Euros 1.2 million having reason to believe that the property was corruptly acquired from the Ministry of Finance of the Republic of Kenya.
Count 3- against the 1 st , 2 nd and 3 rd respondents
Engaging in a project without prior planning contrary to Section 45 (2) (c) as read with Section 48 of the Anti-Corruption & Economic Crimes Act, 2003. The particulars were that, between 30 th October 2003 and 14 th April 2004 in Nairobi within the Republic of Kenya while serving as the Permanent Secretary in charge of Provincial Administration in the Office of the President, Permanent Secretary, Ministry of Finance and Head Debt Management Department, Ministry of Finance, respectively being persons whose functions concerned the management of public revenue engaged in the project known as Modernisation of Police Security Equipment and Accessories of Kenya Police Department without prior planning.
Count 4- against the 1 st respondent
Willful failure to comply with the law relating to procurement contrary to Section 45(2)(b) as read with Section 48 of the Anti-Corruption & Economic Crimes Act, 2003 whose particulars were that, on or about 30 th October 2003 in Nairobi within the Republic of Kenya being the Permanent Secretary in charge of Provincial Administration in the Office of the President and a person whose functions concerned administration of public property, willfully failed to comply with the law relating to procurement, to wit, Regulation 6 (2) of the Exchequer and Audit (Public Procurement) Regulations 2001 by making a procurement decision on behalf of the Police Department in the Modernisation of Police Security Equipment and Accessories of Kenya Police Department project without consulting the said department.
Count 5- against the 1 st respondent
Abuse of office contrary to Section 46 as read with Section 48 of the Anti-Corruption & Economic Crimes Act, 2003. The particulars of offence were that, on or about 30 th October 2003 in Nairobi within the Republic of Kenya being a person employed in public service, to wit, Permanent Secretary in charge of Provincial Administration in the Office of the President in abuse of the said office improperly conferred a benefit to Sound Day Corporation by executing a Supplier’s Credit Contract Agreement for the Modernisation of Police Security Equipment and Accessories of Kenya Police Department thereby conferring contractual rights to Sound Day Corporation and created an obligation against the Government of Kenya to pay sum of Euros 40,000,000 without following the law relating to procurement.
Count 6 – against the 2 nd respondent
Abuse of office contrary to Section 46 as read with Section 48 of the Anti-Corruption & Economic Crimes Act, 2003 whose particulars were that, between 23 rd March 2004 and 14 th April 2004 in Nairobi within the Republic of Kenya being a person employed in public service, to wit, Permanent Secretary, Ministry of Finance used the said office to improperly confer a benefit of Euros 1.2 million by approving the payment of the said sum of Euros 1.2 million to Apex Finance Corporation without an approved budget.
Count 7 – against the 2 nd respondent
Abuse of office contrary to Section 46 as read with Section 48 of the Anti-Corruption & Economic Crimes Act, 2003 whose particulars were that, on or about 17 th December 2003 in Nairobi within the Republic of Kenya being a person employed in public service, to wit, Permanent Secretary, Ministry of Finance used the said office to improperly confer a benefit to Sound Day Corporation by executing a Supplier’s Credit Contract Agreement for the Modernisation of Police Security Equipment and Accessories of Kenya Police Department thereby conferring contractual rights to Sound Day Corporation and created an obligation against the Government of Kenya to pay sum of Euros 40,000,000 without following the law relating to procurement.
The prosecution called a total of 37 witnesses upon which the trial court made a ruling acquitting the respondents under Section 210 of the Criminal Procedure Code Chapter 75 of the Laws of Kenya sparking this appeal. The appellant has raised the following three grounds of appeal;
THAT the learned Magistrate erred both in fact and law in acquitting the respondents under Section 210 of the Criminal Procedure Code, when the appellant had established a prima facie case.
THAT the learned Magistrate erred both in fact and law by failing to appropriately evaluate the evidence of the prosecution, thereby acquitting all accused persons in respect to all the counts for which they should have been placed on their defence.
THAT the learned Magistrate erred in law by failing to consider the weight of the evidence against the respondents, both direct and circumstantial.
Reading through the above grounds, it is my opinion that they oscillate around argument that the evidence produced by the appellant established a prima fascie case warranting the respondents being placed on their defence. The appeal was argued by way of written submissions. I have read the submissions of the appellant dated 29 th October 2024, those by the 1 st , 2 nd and 3 rd respondents dated 25 th March 2025 and those by the 4 th and 5 th respondents dated 31 st January 2025.
In its submissions, the appellant has made reference to the testimonies of PW1, PW2, PW3, PW4, PW6, PW7, PW8, PW10, PW15, PW16, PW25, PW32 and PW37 which it argued laid enough basis for a prima fascie case. On their part, the 1 st , 2 nd and 3 rd respondents took the strategy of responding to the appellant’s submissions and the petition of appeal without specific reference to the witnesses’ testimonies while the 4 th and 5 th respondents have fallen back to the testimonies of all the 37 witnesses.
This is a first appeal and as such the court should dig into the evidence of the witnesses and evaluate, interrogate and analyse the same and come to its own independent conclusion but bear in mind that it did not take the evidence of the witnesses first hand neither did it have the advantage of observing their demeanour. The court is also alive to the fact that this is an appeal against a ruling under Section 210 of the Criminal Procedure Code and in the event it succeeds, the matter would have to go back to the trial court for defence hearing and in that case, it should be careful in making holdings or observations which may prejudice or embarrass the mind of the trial court.
The standard of proof in criminal cases is beyond any reasonable doubt and that burden always lies with the prosecution throughout the proceedings including the defence stage. It never shifts to the accused persons. Honourable Justice J.M. Mativo, as he then was held in David Wahome Wanjohi v Republic (2015) KEHC 2334 (KLR), held that;
‘The legal burden of proof in criminal cases never leaves the prosecution’s backyard.…………….
The above quotation expresses the correct legal position, which is the legal burden of proof in criminal cases rests on the prosecution and this burden must be discharged at all material times.’
The courts have time and again defined what constitutes a case to answer in criminal cases. For an accused person to be put on their defence, there should be evidence on the basis of which a court of law exercising and applying its reasonable mind would find the accused person guilty if no evidence in defence was offered. In other words, the accused person should not be put on their defence as a matter of formality or procedure. There must be cogent evidence warranting the need for the accused person to adduce evidence to cast doubts in the evidence so far produced by the prosecution. In Ngetich v Republic (2023) KECA 451 (KLR), the Court of Appeal held that;
‘We, however, must point out that for a prima facie case to be deemed to have been established, the evidence tendered by the prosecution should be that which a reasonable tribunal, properly directing itself on it, without more, can convict. To achieve this, the evidence should be able to establish all elements of the offence charged. If this standard is not attained, the court must not place an accused person on his defence, for doing so defeats the overriding principle that the burden of proof always lies with the prosecution.’
All the respondents faced the first count which was conspiracy to defraud the government of Kenya. As it has been properly submitted by the counsel for the respondents and held by the trial court, for a charge of conspiracy to be sustained, there must be proof that there was a meeting of minds or agreement between two or more persons to commit an offence. In my view, for this charge to be sustained, the prosecution had to proof that there was an agreement between the parties or the respondents had a common cause of defrauding the government. The evidence must point to the element of fraud or deception. This could me in form of having the amount paid out with clear intention of not delivering what was contracted to be delivered. The meeting of minds or agreement does not have to be in a physical meeting but there must be clear demonstration of common intention and a planned scheme to defraud or employ an agreed course. In Rebecca Mwikali Nabutola, Duncan Muriuki Kaaguru & Ongong’a Achieng v Republic (2016) KEHC 7776 (KLR), it was held that;
‘In order to proof an offence of conspiracy to defraud, the elements to be proved are the existence of an agreement and the intention to defraud the public.’
There is no dispute that the agreement was executed as claimed by the prosecution. What is in dispute is whether the process leading to execution of the agreement was in accordance with procedure provided by the law. The contract was executed upon advice from the Attorney General and as rightly observed by the trial Magistrate, there were many players who were either not called to testify or were not charged. These include one Honourable Chris Murungaru who was the then minister for the user ministry and who purportedly approved the contract. Failure to get input from the said minister either as a witness or an accused person alongside the respondents gave an impression of selective prosecution and left a gap in the prosecution case as far as the charge of conspiracy is concerned. In my analysis, the evidence produced by the prosecution was not cogent enough to sustain a charge of conspiracy to defraud.
I now turn to the other counts. It is common ground that the law applicable to public procurement then was the Exchequer and Audit (Public Procurement) Regulations 2001. Having gone through the ruling of the Honourable Magistrate, I discern that he leveraged his decision on the meaning and extent of regulation he referred to as regulation 3 although the charge sheet talks of regulation 6(2). The regulation provided as follows;
These Regulations shall apply to all public procurement by public entities.
These Regulations shall not apply where the Minister shall, in consultation with the head of the procurement entity, decide that it is in the interest of national security or national defence to use a different procedure, in which case the Minister shall define the method of procurement to be followed in order to secure the interest of the economy and efficiency.
The Honourable Magistrate held that once the Minister in charge of the relevant ministry applied regulation 6(2), all the other regulations became inapplicable. To that extent, I entirely agree. However, careful reading of the regulation reveals two components which are core to this case. The first one is that after the application of the same, the Minister was bound to define the method of procurement to ensure that the interest of the economy and efficiency were secured. The second component was that the Minister did not have a blanket discretion to apply the regulation as he was under an obligation to consult with the head of the procuring entity. Analysis of these two components and whether they were adhered to would determine whether the prosecution established a prima fascie case against the 1 st , 2 nd and 3 rd respondents on counts 3, 4, 5, 6 and 7.
It is clear that the user department and which in my view was the procuring entity in this matter was the Kenya Police. The head of that entity was the Commissioner of Police as the title was by then. The prosecution called one Ali Mohammed Hussein who was the head of the police from 2004 to 2009 meaning that he was not the head of the police at the time of the procurement. He testified that he did not come to know of the contract and he was emphatic that the contract was already executed by the time he was conducted by the 1 st respondent.
The respondents have submitted that having not been in the police service, Mr. Ali was not competent to testify on whether or not the head of the police was consulted. I find that argument lacking merits. The position of Commissioner of Police was a public office which did not go with exit of the occupant. If there were any consultations, they would be, like any other communication between government departments in writing and accessible to the successors in office. The only communication I have seen between the 1 st respondent and the then Commissioner of Police one Edwin Nyaseda before the contract in question was executed are letters dated 11-07-2003 and 16-07-2003 which talk of technical proposal for E. Cops Security Law and Order System for the Kenya police department which appears to me to be in respect of one of the other related 17 contracts which came to be commonly known as Anglo Leasing related contracts.
The 1 st respondent sought approval for single sourcing and authorisation to execute agreement from the 2 nd respondent by a letter dated 5-12-2003. This was the same day he received a legal opinion from the Attorney General which was authored by Dorcas Achapa, a Deputy Solicitor General who testified as PW10 in her letter dated 5-12-2003. The two letters were produced as exhibits 19 and 20. The Attorney General was replying to the 1 st respondent’s request for opinion dated 3-12-2003.
The opinion by the Attorney General gave some proposals on amendment of the draft agreement which had been sent by Sound Day Corporation vide letter dated 20-11-2003 (exhibit 16) which is an indication that the 1 st respondent had started the process of negotiations. This position is given more credence by the fact that the 1 st respondent had by letter dated 30-10-2003 (exhibit 15) enquired from Sound Day Corporation whether it had capacity to execute the contract. The 2 nd respondent by letter dated 10-12-2003 (exhibit 21) asked the 1 st respondent to review issue of interest rate and repayment period. The contract was eventually signed on 17-12-2003 between the 1 st and 2 nd respondents representing the government and the Sound Day Corporation. This was definitely before the approval from the Minister came and without involvement or consultation with the police department. This sequence of events does not show involvement of the police department at any stage.
There was a letter dated 5-07-2004 which was produced as exhibit 4 authored by the 1 st respondent which the prosecution alleged was the first contact with the police department about the contract. The letter came several months after the contract had been executed. This is an area the court cannot close its eyes to without calling on the author of the letter to explain the circumstances under which the letter was written. The same goes for the fact that the contract was executed on 17-12-2003 yet the approval was given on 23-12-2003.
From the above evidence, it is clear to me that there needed to have been an explanation whether the police department was involved in the consultation and the only persons who could do that were the 1 st , 2 nd and 3 rd respondents. Based on this, I hold that the 1 st , 2 nd and 3 rd respondents should have been placed on their defence for the court to test whether or not there was consultation with the procuring entity and whether there was a defined method of procurement and if so whether the same took into consideration the interest of the economy and efficiency.
The way the Honourable Magistrate did the analysis on the issue of consultation was, in my view, not within his purview and he seems to have allowed himself to wander into the field of the respondents. The comments he made in regard to the issue amounted to an explanation of the circumstances under which the contract was signed which should be done by the 1 st , 2 nd and 3 rd respondents.
The 1 st , 2 nd and 3 rd respondents were said to have executed the agreement when there was no budgetary provision of the project. On the issue of budget, one need to look at the evidence of PW8 and PW21. I have looked at exhibits 10, 11 and 35 which were relevant to the issue of the budget. The 3 rd respondent authored exhibit 24 and again he is the only one who could give explanation of the import, purpose and the consequences of the contents therein. The 2 nd respondent wrote letter dated 9-09-2003 to the 1 st respondent which stated in paragraph three that there was no budget provision for the particular project. There is also letter dated 3-12-2003 in which the 1 st respondent at paragraph 3 suggested that there was no budget for the project and was seeking to utilise suppliers credit arrangements which, in my opinion meant that there was no allocation for the credit financing for the financial year.
The respondents have made submissions on the issue of lack of budget in reliance to what the prosecution witnesses said in cross examination and put emphasis on their position that the 1 st to 4 th respondents would be within the law to reallocate funds from one vote to another. Whereas the said respondents may have had the discretion to reallocate, I do belief that the items of the budget set to benefit from the reallocation should have been part of the budget or plan. I do not want to go into deeper analysis of this as I may risk getting into the defence case. I however find and hold that, the trial court did not adequately in my view analyse this aspect. It is this court’s holding that the prosecution had established a prima fascie case that there was no budget or prior planning for the project.
I am left with the count 2 and its alternative which is against the 4 th and 5 th respondents. The counts are hinged on the fact that the respondents dealt or utilized funds sent by the government of Kenya to account number 602-409 held at Schroeder’s & Co. Bank AG Zurich, Switzerland. For this charge to stand, there must be demonstration that the said respondents knew or had reasons to believe that the funds were proceeds of corruption and went ahead and received it.
The appellant maintains that the 4 th and 5 th respondents knew that the money was paid to the accounts corruptly. It was demonstrated by the prosecution that the company which was paid 1.2 million euros was linked to the 4 th and 5 th respondents as beneficial owners. The contract in question was signed on behalf of the supplier by one Brian Mills who was removed from the proceedings. The 4 th and 5 th respondents were not players in procurement of the contract. The money was not paid to the supplier but to Apex Finance Corporation (hereinafter referred to as Apex’).
Apex was not a party to the contract although the contract at clause 8(b) provided that the money was to be paid to its account. The payment slips confirms that the money was paid to the said company’s accounts. Apex not having been a party to the contract, there must be a justification of why they got the money and dealt with it if they were not part of the conversation. The 4 th and 5 th respondents who were signatories to the Apex account cannot claim ignorance of the contract having received such an amount of money. I do not accept that a genuine company would just receive such funds and deal with it without bothering to know the source of the same.
Apex did not on the face of evidence provide any services and receipt of the said money must be explained especially when it comes from government funds. No person is better placed to answer those issues than the 4 th and 5 th respondents. They should convince the court that they were not aware and did not have reasons to believe that the money was corruptly transferred to the account to which they were signatories.
There is evidence that the 4 th and 5 th respondents were directors of the company when it was incorporated in Mauritius on 8 th January 1998 and when it opened the account to which the money was sent. There are also declarations of trust dated 17 th October 2001 by shareholders of Apex showing that they held the share therein as nominees of the 4 th , 5 th and the 6 th (deceased) respondents. Client profile for Apex dated 31-10-2006 show the same respondents as beneficial owners of the account.
The prosecution claimed that the 4 th and 5 th respondents were signatories to the account when the money was received. The 4 th and 5 th respondents have submitted that they had resigned from the company by the time the money was received but the prosecution maintains, and there is evidence to that effect, that the 4 th and 5 th respondents remained signatories to the account. By remaining as signatories to the account, the 4 th and 5 th respondents must in absence of evidence to the contrary, have remained as beneficial owners of the account. In my view, the evidence to the contrary cannot be adduced through submissions. The said respondents should take the stand and produce evidence to that effect.
Finally, there is a dispute on whether the contracted goods were supplied. The respondents insist that since there was lack of an appendix to exhibit 2, there could not be certainty as to what was to be actually delivered. The prosecution on the other hand maintains that the goods shown to have been delivered were not associated with the contract in question. If indeed the lack of the appendix made the contract incomplete, then what would have been the basis for payment of the 1.2 million euros? If indeed there were deliveries, the supplier is expected to have copies and the respondents should be expected to explain this in their defence.
Whereas this court appreciates the position that the burden of proof lies with the prosecution, there are instances where the accused persons must be called upon to explain their roles and positions in the claimed state of affairs which can only be done during the defence hearing.
The upshot of the above is that this court finds that the prosecution had established a prima fascie case against the 1 st , 2 nd and 3 rd respondents in respect of counts 3, 4, 5, 6, and 7 as respectively charged and against the 4 th and 5 th respondents in respect of count two and its alternative and I hereby set aside the trial court’s ruling dated 19 th January 2024 and order in place thereof that the respondent are hereby put on their defence in respect of the mentioned counts. The acquittal in respect of count 1 is hereby upheld.
The respondents shall appear before the Chief Magistrate at Milimani Anti-Corruption Court on a date to be fixed after this judgment for further directions on the defence hearing.
As I conclude, it should be understood that nothing in this judgment should be construed as a direction to the trial court to conduct the defence hearing in a certain manner neither is there conclusion to the authenticity and strength of the evidence so far produced. The matter and the final decision thereof shall be in the discretion and control of the trial court.
Dated signed and delivered at Nairobi this 31 st day of July 2025.
B.M. MUSYOKI
JUDGE OF THE HIGH COURT.
Judgment delivered in presence of;
Mr. Mongare for the appellant;
Mr. Oonge for the 1 st and 2 nd respondents;
Mr. Ngatia SC for the 3 rd respondent and
Miss Mulwa holding brief for Ahmednassir SC for the 4 th and 5 th respondents.
The charges the respondents faced were as follows;
Count 1- against all the respondents
Conspiracy to defraud contrary to Section 317 of the Penal Code Chapter 63 of the Laws of Kenya whose particulars were that between 30 th October 2003 and 14 th April 2004 in Nairobi within the Republic of Kenya conspired with others not before the court to engaged in a scheme to defraud the Government of Kenya of Euros 40,000,000 through a purported Supplier’s Credit Contract Agreement for Modernization of Police Security Equipment and Accessories for Kenya Police Department dated 17 th December 2003.
Count 2- against the 4 th and 5 th respondents
Fraudulent acquisition of public property contrary to Section 45(1)(a) as read with Section 48 of the Anti-Corruption & Economic Crimes Act, 2003 with particulars that on or about 14 th April 2004 in Nairobi within the Republic of Kenya jointly with others not before court and being beneficial owners of the assets in J. Henry Schroder’s Bank A.G, account No. 602 – 439 Switzerland in the name of Apex Finance Corporation Ltd and Apex Finance International Corporation Ltd fraudulently acquired public property, to wit, Euros 1.2 million from the Ministry of Finance of the Republic of Kenya by purporting to finance a project known as Modernization of Police Security Equipment and Accessories of Kenya Police Department.
The alternative count to this was dealing with suspect property contrary to Section 47(1) as read with Section 48 of the Anti-Corruption & Economic Crimes Act, 2003. The particulars were that, on various dates between 16 th April 2004 and 29 th August 2005 in Geneva Switzerland jointly with others not before court and being beneficial owners of the assets in J. Henry Schroder’s Bank A.G, account No. 602 – 439 Switzerland received Euros 1.2 million having reason to believe that the property was corruptly acquired from the Ministry of Finance of the Republic of Kenya.
Count 3- against the 1 st , 2 nd and 3 rd respondents
Engaging in a project without prior planning contrary to Section 45 (2) (c) as read with Section 48 of the Anti-Corruption & Economic Crimes Act, 2003. The particulars were that, between 30 th October 2003 and 14 th April 2004 in Nairobi within the Republic of Kenya while serving as the Permanent Secretary in charge of Provincial Administration in the Office of the President, Permanent Secretary, Ministry of Finance and Head Debt Management Department, Ministry of Finance, respectively being persons whose functions concerned the management of public revenue engaged in the project known as Modernisation of Police Security Equipment and Accessories of Kenya Police Department without prior planning.
Count 4- against the 1 st respondent
Willful failure to comply with the law relating to procurement contrary to Section 45(2)(b) as read with Section 48 of the Anti-Corruption & Economic Crimes Act, 2003 whose particulars were that, on or about 30 th October 2003 in Nairobi within the Republic of Kenya being the Permanent Secretary in charge of Provincial Administration in the Office of the President and a person whose functions concerned administration of public property, willfully failed to comply with the law relating to procurement, to wit, Regulation 6 (2) of the Exchequer and Audit (Public Procurement) Regulations 2001 by making a procurement decision on behalf of the Police Department in the Modernisation of Police Security Equipment and Accessories of Kenya Police Department project without consulting the said department.
Count 5- against the 1 st respondent
Abuse of office contrary to Section 46 as read with Section 48 of the Anti-Corruption & Economic Crimes Act, 2003. The particulars of offence were that, on or about 30 th October 2003 in Nairobi within the Republic of Kenya being a person employed in public service, to wit, Permanent Secretary in charge of Provincial Administration in the Office of the President in abuse of the said office improperly conferred a benefit to Sound Day Corporation by executing a Supplier’s Credit Contract Agreement for the Modernisation of Police Security Equipment and Accessories of Kenya Police Department thereby conferring contractual rights to Sound Day Corporation and created an obligation against the Government of Kenya to pay sum of Euros 40,000,000 without following the law relating to procurement.
Count 6 – against the 2 nd respondent
Abuse of office contrary to Section 46 as read with Section 48 of the Anti-Corruption & Economic Crimes Act, 2003 whose particulars were that, between 23 rd March 2004 and 14 th April 2004 in Nairobi within the Republic of Kenya being a person employed in public service, to wit, Permanent Secretary, Ministry of Finance used the said office to improperly confer a benefit of Euros 1.2 million by approving the payment of the said sum of Euros 1.2 million to Apex Finance Corporation without an approved budget.
Count 7 – against the 2 nd respondent
Abuse of office contrary to Section 46 as read with Section 48 of the Anti-Corruption & Economic Crimes Act, 2003 whose particulars were that, on or about 17 th December 2003 in Nairobi within the Republic of Kenya being a person employed in public service, to wit, Permanent Secretary, Ministry of Finance used the said office to improperly confer a benefit to Sound Day Corporation by executing a Supplier’s Credit Contract Agreement for the Modernisation of Police Security Equipment and Accessories of Kenya Police Department thereby conferring contractual rights to Sound Day Corporation and created an obligation against the Government of Kenya to pay sum of Euros 40,000,000 without following the law relating to procurement.
The prosecution called a total of 37 witnesses upon which the trial court made a ruling acquitting the respondents under Section 210 of the Criminal Procedure Code Chapter 75 of the Laws of Kenya sparking this appeal. The appellant has raised the following three grounds of appeal;
THAT the learned Magistrate erred both in fact and law in acquitting the respondents under Section 210 of the Criminal Procedure Code, when the appellant had established a prima facie case.
THAT the learned Magistrate erred both in fact and law by failing to appropriately evaluate the evidence of the prosecution, thereby acquitting all accused persons in respect to all the counts for which they should have been placed on their defence.
THAT the learned Magistrate erred in law by failing to consider the weight of the evidence against the respondents, both direct and circumstantial.
Reading through the above grounds, it is my opinion that they oscillate around argument that the evidence produced by the appellant established a prima fascie case warranting the respondents being placed on their defence. The appeal was argued by way of written submissions. I have read the submissions of the appellant dated 29 th October 2024, those by the 1 st , 2 nd and 3 rd respondents dated 25 th March 2025 and those by the 4 th and 5 th respondents dated 31 st January 2025.
In its submissions, the appellant has made reference to the testimonies of PW1, PW2, PW3, PW4, PW6, PW7, PW8, PW10, PW15, PW16, PW25, PW32 and PW37 which it argued laid enough basis for a prima fascie case. On their part, the 1 st , 2 nd and 3 rd respondents took the strategy of responding to the appellant’s submissions and the petition of appeal without specific reference to the witnesses’ testimonies while the 4 th and 5 th respondents have fallen back to the testimonies of all the 37 witnesses.
This is a first appeal and as such the court should dig into the evidence of the witnesses and evaluate, interrogate and analyse the same and come to its own independent conclusion but bear in mind that it did not take the evidence of the witnesses first hand neither did it have the advantage of observing their demeanour. The court is also alive to the fact that this is an appeal against a ruling under Section 210 of the Criminal Procedure Code and in the event it succeeds, the matter would have to go back to the trial court for defence hearing and in that case, it should be careful in making holdings or observations which may prejudice or embarrass the mind of the trial court.
The standard of proof in criminal cases is beyond any reasonable doubt and that burden always lies with the prosecution throughout the proceedings including the defence stage. It never shifts to the accused persons. Honourable Justice J.M. Mativo, as he then was held in David Wahome Wanjohi v Republic (2015) KEHC 2334 (KLR), held that;
‘The legal burden of proof in criminal cases never leaves the prosecution’s backyard.…………….
The above quotation expresses the correct legal position, which is the legal burden of proof in criminal cases rests on the prosecution and this burden must be discharged at all material times.’
The courts have time and again defined what constitutes a case to answer in criminal cases. For an accused person to be put on their defence, there should be evidence on the basis of which a court of law exercising and applying its reasonable mind would find the accused person guilty if no evidence in defence was offered. In other words, the accused person should not be put on their defence as a matter of formality or procedure. There must be cogent evidence warranting the need for the accused person to adduce evidence to cast doubts in the evidence so far produced by the prosecution. In Ngetich v Republic (2023) KECA 451 (KLR), the Court of Appeal held that;
‘We, however, must point out that for a prima facie case to be deemed to have been established, the evidence tendered by the prosecution should be that which a reasonable tribunal, properly directing itself on it, without more, can convict. To achieve this, the evidence should be able to establish all elements of the offence charged. If this standard is not attained, the court must not place an accused person on his defence, for doing so defeats the overriding principle that the burden of proof always lies with the prosecution.’
All the respondents faced the first count which was conspiracy to defraud the government of Kenya. As it has been properly submitted by the counsel for the respondents and held by the trial court, for a charge of conspiracy to be sustained, there must be proof that there was a meeting of minds or agreement between two or more persons to commit an offence. In my view, for this charge to be sustained, the prosecution had to proof that there was an agreement between the parties or the respondents had a common cause of defrauding the government. The evidence must point to the element of fraud or deception. This could me in form of having the amount paid out with clear intention of not delivering what was contracted to be delivered. The meeting of minds or agreement does not have to be in a physical meeting but there must be clear demonstration of common intention and a planned scheme to defraud or employ an agreed course. In Rebecca Mwikali Nabutola, Duncan Muriuki Kaaguru & Ongong’a Achieng v Republic (2016) KEHC 7776 (KLR), it was held that;
‘In order to proof an offence of conspiracy to defraud, the elements to be proved are the existence of an agreement and the intention to defraud the public.’
There is no dispute that the agreement was executed as claimed by the prosecution. What is in dispute is whether the process leading to execution of the agreement was in accordance with procedure provided by the law. The contract was executed upon advice from the Attorney General and as rightly observed by the trial Magistrate, there were many players who were either not called to testify or were not charged. These include one Honourable Chris Murungaru who was the then minister for the user ministry and who purportedly approved the contract. Failure to get input from the said minister either as a witness or an accused person alongside the respondents gave an impression of selective prosecution and left a gap in the prosecution case as far as the charge of conspiracy is concerned. In my analysis, the evidence produced by the prosecution was not cogent enough to sustain a charge of conspiracy to defraud.
I now turn to the other counts. It is common ground that the law applicable to public procurement then was the Exchequer and Audit (Public Procurement) Regulations 2001. Having gone through the ruling of the Honourable Magistrate, I discern that he leveraged his decision on the meaning and extent of regulation he referred to as regulation 3 although the charge sheet talks of regulation 6(2). The regulation provided as follows;
These Regulations shall apply to all public procurement by public entities.
These Regulations shall not apply where the Minister shall, in consultation with the head of the procurement entity, decide that it is in the interest of national security or national defence to use a different procedure, in which case the Minister shall define the method of procurement to be followed in order to secure the interest of the economy and efficiency.
The Honourable Magistrate held that once the Minister in charge of the relevant ministry applied regulation 6(2), all the other regulations became inapplicable. To that extent, I entirely agree. However, careful reading of the regulation reveals two components which are core to this case. The first one is that after the application of the same, the Minister was bound to define the method of procurement to ensure that the interest of the economy and efficiency were secured. The second component was that the Minister did not have a blanket discretion to apply the regulation as he was under an obligation to consult with the head of the procuring entity. Analysis of these two components and whether they were adhered to would determine whether the prosecution established a prima fascie case against the 1 st , 2 nd and 3 rd respondents on counts 3, 4, 5, 6 and 7.
It is clear that the user department and which in my view was the procuring entity in this matter was the Kenya Police. The head of that entity was the Commissioner of Police as the title was by then. The prosecution called one Ali Mohammed Hussein who was the head of the police from 2004 to 2009 meaning that he was not the head of the police at the time of the procurement. He testified that he did not come to know of the contract and he was emphatic that the contract was already executed by the time he was conducted by the 1 st respondent.
The respondents have submitted that having not been in the police service, Mr. Ali was not competent to testify on whether or not the head of the police was consulted. I find that argument lacking merits. The position of Commissioner of Police was a public office which did not go with exit of the occupant. If there were any consultations, they would be, like any other communication between government departments in writing and accessible to the successors in office. The only communication I have seen between the 1 st respondent and the then Commissioner of Police one Edwin Nyaseda before the contract in question was executed are letters dated 11-07-2003 and 16-07-2003 which talk of technical proposal for E. Cops Security Law and Order System for the Kenya police department which appears to me to be in respect of one of the other related 17 contracts which came to be commonly known as Anglo Leasing related contracts.
The 1 st respondent sought approval for single sourcing and authorisation to execute agreement from the 2 nd respondent by a letter dated 5-12-2003. This was the same day he received a legal opinion from the Attorney General which was authored by Dorcas Achapa, a Deputy Solicitor General who testified as PW10 in her letter dated 5-12-2003. The two letters were produced as exhibits 19 and 20. The Attorney General was replying to the 1 st respondent’s request for opinion dated 3-12-2003.
The opinion by the Attorney General gave some proposals on amendment of the draft agreement which had been sent by Sound Day Corporation vide letter dated 20-11-2003 (exhibit 16) which is an indication that the 1 st respondent had started the process of negotiations. This position is given more credence by the fact that the 1 st respondent had by letter dated 30-10-2003 (exhibit 15) enquired from Sound Day Corporation whether it had capacity to execute the contract. The 2 nd respondent by letter dated 10-12-2003 (exhibit 21) asked the 1 st respondent to review issue of interest rate and repayment period. The contract was eventually signed on 17-12-2003 between the 1 st and 2 nd respondents representing the government and the Sound Day Corporation. This was definitely before the approval from the Minister came and without involvement or consultation with the police department. This sequence of events does not show involvement of the police department at any stage.
There was a letter dated 5-07-2004 which was produced as exhibit 4 authored by the 1 st respondent which the prosecution alleged was the first contact with the police department about the contract. The letter came several months after the contract had been executed. This is an area the court cannot close its eyes to without calling on the author of the letter to explain the circumstances under which the letter was written. The same goes for the fact that the contract was executed on 17-12-2003 yet the approval was given on 23-12-2003.
From the above evidence, it is clear to me that there needed to have been an explanation whether the police department was involved in the consultation and the only persons who could do that were the 1 st , 2 nd and 3 rd respondents. Based on this, I hold that the 1 st , 2 nd and 3 rd respondents should have been placed on their defence for the court to test whether or not there was consultation with the procuring entity and whether there was a defined method of procurement and if so whether the same took into consideration the interest of the economy and efficiency.
The way the Honourable Magistrate did the analysis on the issue of consultation was, in my view, not within his purview and he seems to have allowed himself to wander into the field of the respondents. The comments he made in regard to the issue amounted to an explanation of the circumstances under which the contract was signed which should be done by the 1 st , 2 nd and 3 rd respondents.
The 1 st , 2 nd and 3 rd respondents were said to have executed the agreement when there was no budgetary provision of the project. On the issue of budget, one need to look at the evidence of PW8 and PW21. I have looked at exhibits 10, 11 and 35 which were relevant to the issue of the budget. The 3 rd respondent authored exhibit 24 and again he is the only one who could give explanation of the import, purpose and the consequences of the contents therein. The 2 nd respondent wrote letter dated 9-09-2003 to the 1 st respondent which stated in paragraph three that there was no budget provision for the particular project. There is also letter dated 3-12-2003 in which the 1 st respondent at paragraph 3 suggested that there was no budget for the project and was seeking to utilise suppliers credit arrangements which, in my opinion meant that there was no allocation for the credit financing for the financial year.
The respondents have made submissions on the issue of lack of budget in reliance to what the prosecution witnesses said in cross examination and put emphasis on their position that the 1 st to 4 th respondents would be within the law to reallocate funds from one vote to another. Whereas the said respondents may have had the discretion to reallocate, I do belief that the items of the budget set to benefit from the reallocation should have been part of the budget or plan. I do not want to go into deeper analysis of this as I may risk getting into the defence case. I however find and hold that, the trial court did not adequately in my view analyse this aspect. It is this court’s holding that the prosecution had established a prima fascie case that there was no budget or prior planning for the project.
I am left with the count 2 and its alternative which is against the 4 th and 5 th respondents. The counts are hinged on the fact that the respondents dealt or utilized funds sent by the government of Kenya to account number 602-409 held at Schroeder’s & Co. Bank AG Zurich, Switzerland. For this charge to stand, there must be demonstration that the said respondents knew or had reasons to believe that the funds were proceeds of corruption and went ahead and received it.
The appellant maintains that the 4 th and 5 th respondents knew that the money was paid to the accounts corruptly. It was demonstrated by the prosecution that the company which was paid 1.2 million euros was linked to the 4 th and 5 th respondents as beneficial owners. The contract in question was signed on behalf of the supplier by one Brian Mills who was removed from the proceedings. The 4 th and 5 th respondents were not players in procurement of the contract. The money was not paid to the supplier but to Apex Finance Corporation (hereinafter referred to as Apex’).
Apex was not a party to the contract although the contract at clause 8(b) provided that the money was to be paid to its account. The payment slips confirms that the money was paid to the said company’s accounts. Apex not having been a party to the contract, there must be a justification of why they got the money and dealt with it if they were not part of the conversation. The 4 th and 5 th respondents who were signatories to the Apex account cannot claim ignorance of the contract having received such an amount of money. I do not accept that a genuine company would just receive such funds and deal with it without bothering to know the source of the same.
Apex did not on the face of evidence provide any services and receipt of the said money must be explained especially when it comes from government funds. No person is better placed to answer those issues than the 4 th and 5 th respondents. They should convince the court that they were not aware and did not have reasons to believe that the money was corruptly transferred to the account to which they were signatories.
There is evidence that the 4 th and 5 th respondents were directors of the company when it was incorporated in Mauritius on 8 th January 1998 and when it opened the account to which the money was sent. There are also declarations of trust dated 17 th October 2001 by shareholders of Apex showing that they held the share therein as nominees of the 4 th , 5 th and the 6 th (deceased) respondents. Client profile for Apex dated 31-10-2006 show the same respondents as beneficial owners of the account.
The prosecution claimed that the 4 th and 5 th respondents were signatories to the account when the money was received. The 4 th and 5 th respondents have submitted that they had resigned from the company by the time the money was received but the prosecution maintains, and there is evidence to that effect, that the 4 th and 5 th respondents remained signatories to the account. By remaining as signatories to the account, the 4 th and 5 th respondents must in absence of evidence to the contrary, have remained as beneficial owners of the account. In my view, the evidence to the contrary cannot be adduced through submissions. The said respondents should take the stand and produce evidence to that effect.
Finally, there is a dispute on whether the contracted goods were supplied. The respondents insist that since there was lack of an appendix to exhibit 2, there could not be certainty as to what was to be actually delivered. The prosecution on the other hand maintains that the goods shown to have been delivered were not associated with the contract in question. If indeed the lack of the appendix made the contract incomplete, then what would have been the basis for payment of the 1.2 million euros? If indeed there were deliveries, the supplier is expected to have copies and the respondents should be expected to explain this in their defence.
Whereas this court appreciates the position that the burden of proof lies with the prosecution, there are instances where the accused persons must be called upon to explain their roles and positions in the claimed state of affairs which can only be done during the defence hearing.
The upshot of the above is that this court finds that the prosecution had established a prima fascie case against the 1 st , 2 nd and 3 rd respondents in respect of counts 3, 4, 5, 6, and 7 as respectively charged and against the 4 th and 5 th respondents in respect of count two and its alternative and I hereby set aside the trial court’s ruling dated 19 th January 2024 and order in place thereof that the respondent are hereby put on their defence in respect of the mentioned counts. The acquittal in respect of count 1 is hereby upheld.
The respondents shall appear before the Chief Magistrate at Milimani Anti-Corruption Court on a date to be fixed after this judgment for further directions on the defence hearing.
As I conclude, it should be understood that nothing in this judgment should be construed as a direction to the trial court to conduct the defence hearing in a certain manner neither is there conclusion to the authenticity and strength of the evidence so far produced. The matter and the final decision thereof shall be in the discretion and control of the trial court.
Dated signed and delivered at Nairobi this 31 st day of July 2025.
B.M. MUSYOKI
JUDGE OF THE HIGH COURT.
Judgment delivered in presence of;
Mr. Mongare for the appellant;
Mr. Oonge for the 1 st and 2 nd respondents;
Mr. Ngatia SC for the 3 rd respondent and
Miss Mulwa holding brief for Ahmednassir SC for the 4 th and 5 th respondents.