Premium
Court upholds Sh900 million fine for businessman that 'chewed' Youth Fund cash
Mukuria Ngamau, a director of Quarandum Ltd.
The High Court has upheld a penalty of Sh900 million imposed on corruption convict, businessman Mukuria Ngamau, over theft of Sh180 million from the Youth Enterprise Development Fund in 2015.
Ngamau will pay a fine of Sh721 million in form of court fines and Sh180 million as compensation to the government for the stolen funds.
At the same time, the court granted the convict a reprieve after quashing a mandatory seven-year imprisonment imposed by a magistrate without an option of a fine for defrauding Kenyan taxpayers through illicit payments siphoned from a national fund intended to finance businesses by the youth.
This means the wealthy businessman, part of whose wealth was forfeited to the state five years ago, could now spend 20 years in jail. He had been handed 27 years by the magistrate.
He was found guilty of five corruption-related charges but filed an appeal contesting both sentence and conviction.
According to a judgment rendered by Justice Esther Maina yesterday on the appeal, the businessman will have to pay Sh721,459,156.
In addition, the High Court upheld the magistrate’s decision to order Ngamau and his trading company, Quorandum Ltd, to compensate the government a sum of Sh180,364,789 they illegally acquired from the Youth Enterprise Development Fund.
Ngamau had been handed the seven-year mandatory sentence on September 30, 2021, by Anti-Corruption Court Chief Magistrate Douglas Ogoti for conspiracy to commit an economic crime.
However, Justice Maina overturned the conviction and sentence yesterday after finding that the Prosecution had withdrawn the charges against Ngamau’s four other suspected co-conspirators.
The judge added that Ngamau's wife Doreen Waithira, a co-accused, was acquitted from the same charge following a finding that she was not involved in the fraud.
As a result, Justice Maina held that the prosecution’s case concerning a conspiracy could not be sustained against Ngamau.
“The court finds that the appeal succeeds but only on the first count of conspiracy. The conviction is not safe because the state withdrew charges against four alleged conspirators and another person was acquitted over the same,” said the judge when ruling on the convict’s appeal.
Ngamau had been charged alongside the Youth Enterprise Development Fund’s former top officials Catherine Namuye (CEO) and Bruce Odhiambo (board chairman).
The two died during the trial and the prosecution withdrew charges against them, leaving the businessman to face the music alone.
Justice Maina upheld the sentencing and conviction of Ngamau for the other offences of unlawful acquisition of public property and making false documents. He was sentenced on September 30, 2021.
For the offence unlawful acquisition of public property, he faced two counts of illegally acquiring Sh115,710,000 and Sh64,654,789 from the Youth Fund.
He was fined Sh442,840,000 and Sh258,629,156 respectively by the magistrate. In default, he was sentenced to serve seven years in prison for each count.
For the offence of making a false document, he faced two counts and was sentenced to three years each. The court did not explain whether the last sentences are mandatory or carry the option of a fine. The prosecution presented 32 witnesses during the trial.
Ngamau committed the offences on diverse dates between November 17, 2014, and May 4, 2015, within Nairobi County.
Evidence showed that Ngamau and his trading company received the money without rendering any services and after forging contract documents for provision of ICT consultancy services.
The businessman colluded with Namuye, and transferred the money to Quorandum Ltd, through the fund's main account held at Chase Bank.
The sentence came three years after the property that Ngamau bought using the money was seized by the Assets Recovery Agency after having been flagged as proceeds of crime.
The properties include a luxurious five-bedroom house at Duchess Park apartments on Hatheru Road, Lavington, Nairobi.
The court said the prosecution proved how the illegal transactions took place based on letters authored by Namuye, as well as invoices and contract agreements.
According to evidence tabled in court, the magistrate observed that Ngamau pitched the idea of an ICT consultancy tender to the CEO and they later discussed how to implement it.
While convicting the businessman, Mr Ogoti noted that procurement rules and procedures, as stipulated in the Public Procurement and Disposal Act were not adhered to.
