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EACC freezes Obado accounts over graft

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Migori governor Okoth Obado is on the spot for the third week running after it emerged yesterday that detectives are pursuing what is believed to be suspicious transfers of county funds to his children abroad.

The Star has also established that asset recovery agencies have frozen the bank accounts of Obado’s wife, Hellen Adhiambo Odie, five businessmen and three companies believed to be proxies or associated with the county boss.

In documents filed in court, EACC says major Migori county suppliers who are alleged to be Obado’s proxies made huge international transfers to, among others, Obado’s children in Australia, Hong Kong and China.

The proxies known to each other registered many companies that have been awarded what EACC terms as “inflated and fictitious contracts”.

Read: I didn’t kill Sharon, Obado tells police

Over Sh2.5 billion has been paid out to the dubious companies over the last five years.

“The preliminary investigations have raised reasonable suspicion that the embezzled public funds have been used by the governor, his wife and the said close proxies, the respondents herein, to accumulate property and illicit wealth,” EACC said.

Those named as the governor’s associates who have benefited from the alleged fraudulent deals and whose accounts have been frozen include Jared Peter Odoyo Oluoch Kwaga, Ernest Omondi Owino and Joram Opala Otieno.

Others are Patroba Ochanda Otieno, Beatrice Akinyi Ogutu, Kennedy Odhiambo Akello and Kennedy Onyango Adongo.

Opala, Kwaga, and Ochanda are blood brothers.

In the 2015-2016 financial year, for instance, the companies owned by the suspects were awarded tenders worth Sh239.7 million.

The probe is another nightmare that Obado and family have been grappling with besides the gruesome murder of Rongo University student Sharon Otieno.

Obado and his wife are among persons of interest that detectives are investigating in connection with the murder of the governor’s lover, Sharon.

The EACC is now considering seeking mutual legal assistance from the three countries to recover the cash according to court documents.

In the applications seeking to extend the freeze, the anti-corruption agency says it may apply for mutual legal assistance as provided under chapter 75a of the Laws of Kenya following discoveries of international money transfers to his children and others in Australia, Hong Kong and China.

Part of the cash paid to Kwaga was wired to the accounts of Scarlet Susan Okoth and Acholla Okoth.

“It is confirmed that Scarlet Susan is daughter of Zachariah Okoth Obado, the Migori county governor,” EACC stated.

Read: Detectives dust car in Sharon’s murder probe

INTRICATE WEB

EACC forensic investigator Ann Murigih said they have discovered an intricate web of bank transactions involving over 100 bank accounts. Murigih said they will record statements from various banks employees.

It has emerged that EACC discretely got a six-months freeze of six banks accounts and preservation of a massive 37 parcels of land on December 1, 2017.

Most parcels of land are situated in Migori town.

But the preservation order was again extended on June 21, 2018, for a further four months.

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EACC raided the home of suspects and retrieved sale agreements and title deeds of additional 40 parcels of land, bringing to 77 pieces of land whose acquisition is questionable.

Judge Ong’udi described the immoveable properties under investigation as “quite enormous”.

The anti-graft agency has also obtained bank details and statements of over 30 additional bank accounts, motor vehicle ownership documents; Local Supply Orders of more than Sh200 million and payment vouchers of more than Sh45 million.

EACC is now demanding an explanation on the sources of the monies in the bank accounts and the land parcels.

“The EACC intends to file a suit for recovery of assets under section 55 of the Anti-Corruption and Economic Crimes Act after the investigations,” Judge Ong’udi said in granting the extension.

TRANSFERS

An affidavit by EACC investigator Pius Maithya described how Kwaga transferred huge sums of money from his Co-operative Bank accounts to several accounts in China and Hong Kong on August 21, 2014, October 23, 2015, November 18, 2015 and August 23, 2016.

Kwaga is among Migori suppliers whose properties were preserved pending completion of investigations.

Other accounts frozen are for Janto Construction Limited (Sh4,000,317), Marowa Stores (Sh1,711,134) and Mbigo Enterprises (Sh2,067,058).

Also frozen are the accounts of Hellen Obado at Equity Bank, Awendo branch, which has Sh784,451 and an account identified as Kuku Ni Pesa, Equity Bank, Migori Branch with Sh700,660.

Owino is a director of two firms under probe, Janto Construction and Mbigu Enterprises.

When EACC searched his accounts in August last year, Owino had a cool Sh5.3 million in the bank.

Detectives have also established that the contractors are surrogates and share cash paid by the Migori county government.

“There was a trend whereby, in each of these companies, upon receipt of funds from Migori county transferred monies to Jared Peter Odoyo Oluoch Kwaga who in-turn transferred to Earnest Omondi Owino and also Joram Opala,” EACC told the High Court.

Mbingo Enterprises Ltd has been paid more than Sh700 million for several contracts.

PALATIAL HOME

EACC says Mbingo Enterprises constructed Obado’s palatial home in Uriri constituency but could not find records indicating that the governor paid the contractor.

EACC says part of the reason they are yet to nail any suspects is because the Migori government initially refused to avail critical documents then the county offices mysteriously caught fire.

The agency says the incident is suspicious and could have been a tactical move to wipe out evidence.

“When he [Migori county secretary] finally complied, it was just a few documents that were availed on 25 September 2017. Come 26 September 2017 the Migori county offices which stored various documents including what was being sought were razed down by a fire. It cannot be denied that this had a negative impact on the investigations,” Justice Ongudi said.

Despite the ongoing probe, Mbigo again got two lucrative contracts worth Sh16.8 million as recently as April this year. After completion of work, county officials wired the money to the firm’s frozen account.

The money becomes part of the millions that the troubled firm cannot access.

The firm, through its director Ernest Omondi, is now seeking High Court orders to be allowed to access the latest deposit.

More: DPP Haji: Obado is not above the law

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Sordid tale of the bank ‘that would bribe God’

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Bank of Credit and Commerce International. August 1991. [File, Standard]

“This bank would bribe God.” These words of a former employee of the disgraced Bank of Credit and Commerce International (BCCI) sum up one of the most rotten global financial institutions.
BCCI pitched itself as a top bank for the Third World, but its spectacular collapse would reveal a web of transnational corruption and a playground for dictators, drug lords and terrorists.
It was one of the largest banks cutting across 69 countries and its aftermath would cause despair to innocent depositors, including Kenyans.
BCCI, which had $20 billion (Sh2.1 trillion in today’s exchange rate) assets globally, was revealed to have lost more than its entire capital.
The bank was founded in 1972 by the crafty Pakistani banker Agha Hasan Abedi.
He was loved in his homeland for his charitable acts but would go on to break every rule known to God and man.
In 1991, the Bank of England (BoE) froze its assets, citing large-scale fraud running for several years. This would see the bank cease operations in multiple countries. The Luxembourg-based BCCI was 77 per cent owned by the Gulf Emirate of Abu Dhabi.  
BoE investigations had unearthed laundering of drugs money, terrorism financing and the bank boasted of having high-profile customers such as Panama’s former strongman Manual Noriega as customers.
The Standard, quoting “highly placed” sources reported that Abu Dhabi ruler Sheikh Zayed Sultan would act as guarantor to protect the savings of Kenyan depositors.
The bank had five branches countrywide and panic had gripped depositors on the state of their money.
Central Bank of Kenya (CBK) would then move to appoint a manager to oversee the operations of the BCCI operations in Kenya.
It sent statements assuring depositors that their money was safe.
The Standard reported that the Sheikh would be approaching the Kenyan and other regional subsidiaries of the bank to urge them to maintain operations and assure them of his personal support.
It was said that contact between CBK and Abu Dhabi was “likely.”
This came as the British Ambassador to the UAE Graham Burton implored the gulf state to help compensate Britons, and the Indian government also took similar steps.
The collapse of BCCI was, however, not expect to badly hit the Kenyan banking system. This was during the sleazy 1990s when Kenya’s banking system was badly tested. It was the era of high graft and “political banks,” where the institutions fraudulently lent to firms belonging or connected to politicians, who were sometimes also shareholders.
And even though the impact was expected to be minimal, it was projected that a significant number of depositors would transfer funds from Asian and Arab banks to other local institutions.
“Confidence in Arab banking has taken a serious knock,” the “highly placed” source told The Standard.
BCCI didn’t go down without a fight. It accused the British government of a conspiracy to bring down the Pakistani-run bank.  The Sheikh was said to be furious and would later engage in a protracted legal battle with the British.
“It looks to us like a Western plot to eliminate a successful Muslim-run Third World Bank. We know that it often acted unethically. But that is no excuse for putting it out of business, especially as the Sultan of Abu Dhabi had agreed to a restructuring plan,” said a spokesperson for British Asians.
A CBK statement signed by then-Deputy Governor Wanjohi Murithi said it was keenly monitoring affairs of the mother bank and would go to lengths to protect Kenyan depositors.
“In this respect, the CBK has sought and obtained the assurance of the branch’s management that the interests of depositors are not put at risk by the difficulties facing the parent company and that the bank will meet any withdrawal instructions by depositors in the normal course of business,” said Mr Murithi.
CBK added that it had maintained surveillance of the local branch and was satisfied with its solvency and liquidity.
This was meant to stop Kenyans from making panic withdrawals.
For instance, armed policemen would be deployed at the bank’s Nairobi branch on Koinange Street after the bank had announced it would shut its Kenyan operations.
In Britain, thousands of businesses owned by British Asians were on the verge of financial ruin following the closure of BCCI.
Their firms held almost half of the 120,000 bank accounts registered with BCCI in Britain. 
The African Development Bank was also not spared from this mess, with the bulk of its funds deposited and BCCI and stood to lose every coin.
Criminal culture
In Britain, local authorities from Scotland to the Channel Islands are said to have lost over £100 million (Sh15.2 billion in today’s exchange rate).
The biggest puzzle remained how BCCI was allowed by BoE and other monetary regulation authorities globally to reach such levels of fraudulence.
This was despite the bank being under tight watch owing to the conviction of some of its executives on narcotics laundering charges in the US.
Coast politician, the late Shariff Nassir, would claim that five primary schools in Mombasa lost nearly Sh1 million and appealed to then Education Minister George Saitoti to help recover the savings. Then BoE Governor Robin Leigh-Pemberton condemned it as so deeply immersed in fraud that rescue or recovery – at least in Britain – was out of the question.
“The culture of the bank is criminal,” he said. The bank was revealed to have targeted the Third World and had created several “institutional devices” to promote its operations in developing countries.
These included the Third World Foundation for Social and Economic Studies, a British-registered charity.
“It allowed it to cultivate high-level contacts among international statesmen,” reported The Observer, a British newspaper.
BCCI also arranged an annual Third World lecture and a Third World prize endowment fund of about $10 million (Sh1 billion in today’s exchange rate).
Winners of the annual prize had included Nelson Mandela (1985), sir Bob Geldof (1986) and Archbishop Desmond Tutu (1989).
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Monitor water pumps remotely via your phone

Tracking and monitoring motor vehicles is not new to Kenyans. Competition to install affordable tracking devices is fierce but essential for fleet managers who receive reports online and track vehicles from the comfort of their desk.

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Agricultural Development Corporation Chief Accountant Gerald Karuga on the Spot Over Fraud –

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Gerald Karuga, the acting chief accountant at the Agricultural Development Corporation (ADC), is on the spot over fraud in land dealings.

ADC was established in 1965 through an Act of Parliament Cap 346 to facilitate the land transfer programme from European settlers to locals after Kenya gained independence.

Karuga is under fire for allegedly aiding a former powerful permanent secretary in the KANU era Benjamin Kipkulei to deprive ADC beneficiaries of their land in Naivasha.

Kahawa Tungu understands that the aggrieved parties continue to protest the injustice and are now asking the Ethics and Anti-corruption Commission (EACC) and the Directorate of Criminal Investigations (DCI) to probe Karuga.

A source who spoke to Weekly Citizen publication revealed that Managing Director Mohammed Dulle is also involved in the mess at ADC.

Read: Ministry of Agriculture Apologizes After Sending Out Tweets Portraying the President in bad light

Dulle is accused of sidelining a section of staffers in the parastatal.

The sources at ADC intimated that Karuga has been placed strategically at ADC to safeguard interests of many people who acquired the corporations’ land as “donations” from former President Daniel Arap Moi.

Despite working at ADC for many years Karuga has never been transferred, a trend that has raised eyebrows.

“Karuga has worked here for more than 30 years and unlike other senior officers in other parastatals who are transferred after promotion or moved to different ministries, for him, he has stuck here for all these years and we highly suspect that he is aiding people who were dished out with big chunks of land belonging to the corporation in different parts of the country,” said the source.

In the case of Karuga safeguarding Kipkulei’s interests, workers at the parastatals and the victims who claim to have lost their land in Naivasha revealed that during the Moi regime some senior officials used dubious means to register people as beneficiaries of land without their knowledge and later on colluded with rogue land officials at the Ministry of Lands to acquire title deeds in their names instead of those of the benefactors.

Read Also: Galana Kulalu Irrigation Scheme To Undergo Viability Test Before Being Privatised

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“We have information that Karuga has benefitted much from Kipkulei through helping him and this can be proved by the fact that since the matter of the Naivasha land began, he has been seen changing and buying high-end vehicles that many people of his rank in government can’t afford to buy or maintain,” the source added.

“He is even building a big apartment for rent in Ruiru town.”

The wealthy officer is valued at over Sh1.5 billion in prime properties and real estate.

Last month, more than 100 squatters caused scenes in Naivasha after raiding a private firm owned by Kipkulei.

The squatters, who claimed to have lived on the land for more than 40 years, were protesting take over of the land by a private developer who had allegedly bought the land from the former PS.

They pulled down a three-kilometre fence that the private developed had erected.

The squatters claimed that the former PS had not informed them that he had sold the land and that the developer was spraying harmful chemicals on the grass affecting their livestock and homes built on a section of the land.

Read Also: DP Ruto Wants NCPB And Other Agricultural Bodies Merged For Efficiency

Naivasha Deputy County Commissioner Kisilu Mutua later issued a statement warning the squatters against encroaching on Kipkuleir’s land.

“They are illegally invading private land. We shall not allow the rule of the jungle to take root,” warned Mutua.

Meanwhile, a parliamentary committee recently demanded to know identities of 10 faceless people who grabbed 30,350 acres of land belonging to the parastatal, exposing the rot at the corporation.

ADC Chairman Nick Salat, who doubles up as the KANU party Secretary-General, denied knowledge of the individuals and has asked DCI to probe the matter.

Email your news TIPS to [email protected] or WhatsApp +254708677607. You can also find us on Telegram through www.t.me/kahawatungu

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William Ruto eyes Raila Odinga Nyanza backyard

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Deputy President William Ruto will next month take his ‘hustler nation’ campaigns to his main rival, ODM leader Raila Odinga’s Nyanza backyard, in an escalation of the 2022 General Election competition.

Acrimonious fall-out

Development agenda

Won’t bear fruit

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