From left: Rashmi Kamani, Deepak Kamani, David Onyonka and Dave Mwangi in a Milimani court, Nairobi. They were acquitted of Anglo-Leasing charges.
| Dennis Onsongo | Nation Media GroupNews
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The two-decade hunt for Anglo Leasing scandal ghosts that became a circus
When Kamlesh Pattni was freed over the Sh5.6 billion Goldenberg scandal in October 2016, all attention shifted to the outcome of the Sh3.6 billion Anglo Leasing court case. Focus was on whether prosecutors would present water-tight evidence to win the case. They did not. Unravelling the phantoms of Anglo Leasing has become a tricky affair.
Some of the key Anglo Leasing suspects were set free after an eight-year trial on Friday.
Anglo Leasing Finance was a company associated with businessman Deepak Kamani. It was reportedly used as a conduit to siphon billions of shillings from the National Treasury through overpriced security-related projects and use of foreign-registered briefcase firms. Anglo Leasing payments were for services ranging from “forgery-proof passports”, naval ships, forensic laboratories and other security-related projects.
The matter came to light 19 years ago when Ntonyiri MP Maoka Maore (Kanu) tabled the first documents in Parliament claiming a Sh3.4 billion scandal in the Ministry of Home Affairs, then under Moody Awori.
It now appears that Anglo Leasing payments join Goldenberg in the list of unresolved scandals, barring for one case that is still ongoing.
In 2005, the government, through Justice Minister Kiraitu Murungi, dismissed the Anglo Leasing Affair as “the scandal that never was” – meaning there was no goodwill to investigate the matter.
The National Rainbow Coalition (Narc) administration instead heaped blame on John Githongo, the Permanent Secretary for Ethics, for whistle-blowing on the secret payments. Githongo had told President Mwai Kibaki that Anglo Leasing payments would embarrass the government, which had won the election by promising to fight corruption and prosecute individuals involved in scandals.
Corruption
Githongo said he had briefed Kibaki on what was to be the “biggest corruption in our administration”. When the issue was debated in Parliament, then-opposition leader, Uhuru Kenyatta – who would later succeed Kibaki as president – said the Anglo-Leasing-related projects “represent impunity, negligence, and recklessness”.
“Those who are corrupt have hidden behind their political parties and tribes to evade action,” he said.
But government officials close to President Kibaki had attempted to stop, nay intimidate, Githongo from investigating the scandal in which money had been wired to shadowy firms contracted for various over-priced projects at the tail-end of the Daniel arap Moi presidency and the early years of the Kibaki regime. Githongo resigned and fled into exile.
Apart from Sylvester Mwaliko, a former Home Affairs Permanent Secretary, no other person has been found guilty over the scandal. Mwaliko was in September 2012 found guilty and fined Sh3 million with the alternative of a three-year prison term.
He became one of few senior government officials ever to get convicted over a mega-scandal.
To access the global finance markets, Kenya has been forced to make payments to Anglo Leasing-related companies after it failed to defend some claims filed abroad.
At the centre of the Anglo Leasing investigations were Finance Minister David Mwiraria, businessmen Depaak Kamani and Rashmi Kamani, and civil servants Joseph Magari, David Onyonka and Dave Mwangi, who were set free on Friday when Nairobi Chief Magistrate, Martha Mutuku, said the prosecution had failed to prove its case.
“A disappointing but unsurprising outcome. We know and believe that ultimately justice delayed is justice denied. After 20 years, even justice gets exhausted. Public debt remains a governance challenge for Kenya. I don’t think that is going to change,” Mr Githongo told the Sunday Nation in reaction to the decision.
The key companies that participated in the Anglo-Leasing type of contracts were Schroeder Finance, Midland Bank, Universal Setspace, Anglo Leasing Finance Company, Silverson Establishment, First Merchantile, Ciara Systems, Midland Finance and Apex Finance.
The Anglo Leasing case left ruined careers, unresolved questions and taxpayers shouldering hefty bills. Others died before they had proved their innocence. Mwiraria died in April 2017 while awaiting trial. He had hit the headlines after he was charged in 2015 and had to take a plea from Karen Hospital where he was undergoing chemotherapy for cancer.
Some people vouched for his innocence, saying Anglo Leasing destroyed Mwiraria’s civil service and political career.
From the start, then-Attorney General Amos Wako was criticised for the way he handled the investigations. In 2009, Wako was censured by the British Serious Fraud Office (SFO) for failing to provide evidence to the entity to help investigate the British firms involved.
Carrying out investigations
Kenyan authorities had also blocked SFO from carrying out investigations. It was Wako’s office that permitted promissory notes to Sound Day Corporation for the supply of security kits.
In the current case, the court was told that Sound Day Corporation was well known in government circles and had participated in security tenders since 1993. But whether the contracts were above board was unclear.
Sound Day was one of the firms flagged in the Panama Papers, revealing the network of offshore firms associated with the Kamani family. The Panama Papers, leaked in 2016, included a collection of 11 million secret financial documents illustrating how some of the world’s wealthiest people hide their money.
Sound Day was shown to be a shell company with offices in London. It was registered by Mossack Fonseca, a Panamanian law firm and corporate service provider helping the super-rich hide their wealth.
It was the prosecution’s case that though Sound Day was to provide credit and supply equipment to the government, the same deal provided that no gadgets would be delivered before Kenya made the first payment.
Sound Day was to charge interest of three per cent for the financing. But critics of this arrangement argued that it was Treasury originating the first payments and not Sound Day – meaning the government would pay interest on credit it had advanced to an entity with no money. This arrangement was described as a “classic case of reverse financing”.
The documents revealed that the Kamanis had incorporated the company in September 1989 to finance Info Talent’s supply of police equipment. Sound Day was to charge interest of three per cent in the arrangement. Whether this was attempted fraud will now never be apparent.
As the magistrate said, the prosecution failed to show evidence of a scheme to defraud the government. A 20-year hunt for Anglo Leasing ghosts has become a circus.
