Appeal Court dismisses Mwau’s petition in Charterhouse case

The Court of Appeal has thrown out a petition filed by former politician Harun Mwau in which he distanced himself from the collapse of Charterhouse Bank.

In the petition filed seven years ago against the banking regulator, finance minister and the clerk of the National Assembly, Mwau told the court that the report on tax evasion and the collapse of the financial lender injured his character.

The former anti-graft boss also told the court that the defendants led by former Central Bank of Kenya (CBK Governor Andrew Mullei acted against the law to introduce his name as the law did not give them powers to investigate tax evasion crimes.

But Court of Appeal judges GBM Kariuki, Asike Makhandia and Otieno Odek in their 24-page judgment did not agree with him.

Dismissing his appeal, the three judges noted that he (Mwau) failed to demonstrate to the court how the CBK, the former Governor, finance minister and Parliament broke the law in their investigation of the collapsed bank.

“Failure by the appellant to demonstrate that the respondents action was not authorized by the foregoing statutory provisions leave us with no hesitation but to affirm the finding and holding by the trial court that the appellant failed to show how each of the respondents acted in excess of or without jurisdiction,” the Court of Appeal found.

The court also found that the National Assembly proceedings that touched on Charterhouse Bank were covered by the parliamentary privileges.

The judges also rejected prayers to force the former CBK governor to provide investigation reports, which accompanied a letter dated March 20, 2006 to the court noting that they were received in secrecy.

The judges argued that he (Mwau) did not give the court any evidence that respondents breached the rule on confidentiality.

“We have considered the provisions of section 32(2) of the banking Act on confidential nature of all information obtained in the course of inspection.

Confidential information is privileged information and only shared by a few people for furthering certain purposes,” the judges pointed out, adding that the Banking Act protects the respondents from any liability arising from confidential communication in the discharge of their functions.

The letter was drafted by Dr Mullei to the then Finance Minister Amos Kimunya recommending that Charter House Bank’s license should be revoked over claims of money laundering and tax evasion.

In his letter, the former Governor reckoned that his conviction for closure of the bank was as a result of investigations that revealed illegal activities in the financial lenders’ dealings.

Charterhouse Bank was placed under statutory management in June 2006 by the then Finance Minister Amos Kimunya following a request by the Central Bank after it was suspected of carrying out suspicious transactions.