Thread by @mmnjug

A deputy director at @KeRRA_Ke bought the bulk of 35 apartments in the four months to September 2019 when Kenya withdrew the old Sh1,000 banknote to tackle illicit financial flows. - @BD_Africa

The Assets Recovery Agency (ARA) has raised the red flag that the apartments worth Sh374.5 million and Sh94 million in bank accounts linked to Margaret Wanja Muthui were the products of illicit deals, including kickbacks from road contractors.

The ARA successfully applied to court for freeze of the assets with the aim of forfeiting them to the State, arguing that her salary cannot support the purchase of the multimillion-shilling properties within weeks.

In a petition certified as urgent, the State agency says Ms Muthui bought 11 apartments in Kileleshwa for Sh264M in cash between July and September 24, 2019.

She acquired another 12 units in a Ruaka flat in June 2019 for Sh15M, days after @CBKKenya set September 30, 2019 deadline for converting the old Sh1,000 note into new ones after it became the banknote of choice for criminals in the country.

Those exchanging large amounts were required to explain how they acquired the cash.The move was designed to stop the flow of proceeds of crime such as corruption and counterfeiting of banknotes through the financial sector.

Ms Muthui is said to have bought 23 apartments worth Sh279M during the four months when the old bank notes were being retired and she paid cash for the properties, court filings show.

The cash deals were meant to conceal the money from the CBK, which said notes worth Sh7.4B were not exchanged, rendering the cash invalid and hitting the suspected corrupt owners hard.

ARA says Ms Muthui allegedly purchased the apartments herself or through proxies and a company whose directors were mostly her relatives or proxies.

Documents filed in court showed that she had earlier in March 2019 acquired a flat with 12 units in Ruaka for Sh15M. Ms Muthui later acquired a house in Nairobi and land in Riruta, Dagoretti and registered them in the names of other persons to conceal the source of the funds.

On Tuesday, Justice James Wakiaga also allowed the freezing of Sh94M held in several accounts at Co-operative Bank and registered under different persons, pending the determination of the petition.

Justice Wakiaga also ordered the chief lands registrar to register caveats against each of the Sh374.5M apartments and home in a move aimed at stopping their transfer or sale.

The judge also ordered a preservation of rental income from all the apartments and the houses. The rental income will be deposited at a @KCBGroup account belonging to the ARA, pending the determination of the case.

Ms Muthui, who is a deputy director in charge of supply chain management at @KeRRA_Ke was transferred to the department of Infrastructure early this year. She resisted the move and petitioned the High Court, which reversed the transfer, leaving her at the cash-rich KeRRA.

The ARA has named Ms Esther Wagio Njunge, Ms Muthui, Ms Grace Nyambura Ndiritu, Ms Mercy Wambui Nyambura and Cynthia Wanjiku Nyambura as well as Light House Trading Company Ltd as respondents in the case. The directors of the company are Ms Wagio and Ms Wacuka.

The funds frozen include Sh74.7M held in fixed account at Co-op Bank in the name of Ms Wagio, Sh13.9 million in the name of Ms Muthui and Sh4.8M at Co-op Bank in the name of Light House Trading Company.

Also frozen is a residential house in Nairobi, known as Collingham Gardens, which was purchased for Sh55M on August 1, 2016.

Documents filed in court showed that the land in Dagoretti was purchased by Ms Wagio on December 18, 2020 for Sh25M from Ms Rosemary Wanjiku Gathuku.

The agency said it was tipped that the respondents have acquired funds and assets through money laundering, and which is believed to be proceeds of crime.

The ARA then moved to court and was allowed to investigate the accounts. The 11 apartments in Kileleshwa were purchased in cash from Ceytun East Africa Ltd and registered in the names of the company, Ms Wagio, Ms Ndiritu and Ms Wanjiku.

The seller is a limited company incorporated in Turkey, known as Ceytun Insaat Sanayi Ve Ticaret and the developer of the property was Ceytun East Africa Ltd.

It was revealed that on July 28, 2019, Ms Muthui, accompanied by her lawyer, went to Ceytun East Africa offices at Signature Apartments in Kileleshwa and paid Necmi Karatas, the in-charge of the sales at the company, Sh20.5M in cash for one apartment.

The apartment draws a monthly income of Sh116,000.
She purchased a second apartment on August 21, 2019 for Sh22M and according to the ARA, the house draws a monthly income of Sh170,000.

Ms Wacuka purchased another apartment for Sh25M on September 24, 2019 and she gets a monthly rent of Sh250,000.

The petition said Ms Wagio, the company, Ms Ndiritu and Ms Wanjiku were used as conduits of money laundering by Ms Muthui, for purposes of concealing the source of the funds and beneficial ownership of the properties in question.

The ARA said the funds in the three accounts were deposited on diverse dates between 2015 and 2021 and the period of maturity is April 16, 2022. The first deposit was made on April 13, 2015 when Ms Muthui transferred through RTGS Sh39M from her account to Ms Wagio’s account.

On June 4, 2015, Ms Wagio transferred through RTGS Sh39M from her account at Equity Bank to her account at Co-op Bank. The same account was to receive Sh3M on June 8, the same year.

On July 26, 2017, the funds had accumulated interest and stood at Sh49.8M and it is alleged that Ms Wagio transferred the money to another account in the same bank in a fixed deposit account.

On April 12, this year, Ms Muthui allegedly deposited Sh13M in a fixed deposit account.

How a civil servant, a deputy director at @KeRRA_Ke bought houses worth Kes279M in cash bit.ly/3gZlfPR via @BD_Africa