The Anti-Counterfeit Authority (ACA) risks losing more than Sh600 million over a botched operation it conducted seven years ago, new disclosures by Auditor-General Nancy Gathungu showed.
The contingent liability stems from a raid on a group of traders who were arrested and arraigned and their wares which included electric bulbs confiscated.
The court later cleared the traders of any wrongdoing triggering a compensation suit against the ACA for unlawful arrest and malicious prosecution. The traders also want reparation for some of their wares that were damaged following the seizure by the State agency.
“The accused persons and others instituted a civil case at Milimani Law Courts in 2016 seeking special damages of Sh603,500,000 from the authority for unlawful arrest, malicious prosecution, and destruction of property,” the Auditor-General said.
“Although the authority released part of the goods seized to accused persons in 2015, they complained that the remaining goods had been destroyed and they could not take destroyed or damaged goods,” she added as part of a note on ACA’s audit findings for the financial year to June 2022.
The watchdog acknowledges that the traders rejected some of the goods it had seized from them on concerns over their state, but maintains it has kept them in “safe custody”.
“The Authority did notify the accused persons to avail themselves for the release of the goods as ordered by the court. They availed themselves in the presence of their lawyer on July 13, 2015. The Authority released part of the goods seized to the accused persons on this date.
“They however complained that the remaining goods have been destroyed and that they could not take destroyed and/or damaged goods,” ACA’s Director of Legal Services Johnson Adera said.
“Consistent with the discharge of this burden, the authority is going to pursue a counterclaim in the civil suit for the accused persons (now plaintiffs in the civil case) to pay to the Authority storage fees from the date they rejected the goods,” Mr Adera says.
The report did not disclose the nature of damages and destruction that caused the traders to reject the goods, but should their case prevail, ACA will cough up over Sh600 million.
