Ex-NYS director Evans Kundu fails to retake control of unexplained millions

A former National Youth Service (NYS) official has lost a bid to block a State agency from taking over his properties, which were declared as proceeds of crime almost three years ago.

The Court of Appeal dismissed the application by Mr Evans Wafula Kundu, seeking to stop Assets Recovery Agency (ARA) from managing the said properties, pending the determination of his appeal.

The properties he was ordered to forfeit to the State include flats in Kasarani worth Sh16 million, which he acquired in April 2014, 40 acres of land in Kitale which he bought in 2013, a plot in Kitale, a house in Runda worth Sh73 million, a house in Kiamunyi in Nakuru and a lorry.

Others are a four-storey residential building in Njoro, another piece of land in Nairobi valued at Sh6 million, and his palatial home in Trans Nzoia, which was allegedly constructed using proceeds of crime. The properties were acquired between 2013 and 2018.

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Mr Kundu submitted that the assets were likely to waste away if the agency took over their management since ARA does not have the structure to manage the properties.

Justices Fatuma Sichale, Francis Tuiyott, and Fred Ochieng rejected the application wondering why it took Mr Kundu over two years to file the application.

“Such lengthy and unexplained delay is perhaps evidence that the application is simply an afterthought and the fear that the appeal will be rendered nugatory if not protected by a stay is not well founded,” said the judges.

The judges added that Mr Kundu failed to explain why he had doubts about the capacity of the agency to manage the properties now, yet he did not raise it when the order took effect in 2022.

During the trial, Mr Kundu had defended his wealth, saying his sources of income included maize farming both for commercial purposes and seed production on properties that his second wife inherited from her family.

He was employed by the NYS as a serviceman in 1980 and rose through the ranks to become the acting deputy director and officer in charge of the Mechanical and Transport Branch.

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Mr Kundu has faulted trial judge Esther Maina for allegedly excluding critical evidence that demonstrated legitimate sources of income used to acquire the assets.

The former NYS boss also faulted the judge for relying on his noncompliance with tax returns as a basis for finding illegitimacy in the acquisition of the assets when tax legislation has a raft of measures in sanctioning a person who does not declare taxes.

He has further faulted the court for ignoring the legitimate interest of third parties as owners of some of the properties.

Evidence produced in court showed that Mr Kundu’s earnings between 2013 and 2017 only amounted to Sh259,550 and there was no evidence to support an allegation that he earned Sh200 million from maize farming.

The agency further said the audited records and bank accounts could not account for Sh65 million and Sh175 million, allegedly earned from the sale of maize.

ARA said Mr Kundu did not file his annual returns or tax returns for his business.

The judges, however, ruled that his appeal raised substantial questions.

“While the learned trial judge interrogated the evidence before her and reached a conclusion that the interested parties were proxies of the applicant, whether that conclusion is in tandem with the evidence is a matter worthy of further scrutiny by an appellate court,” the court said.

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