Ex-Kemri boss sued for over Sh500m

By JUDY OGUTU

The Kenya Anti-Corruption Commission (KACC) is seeking more than Sh500 million from former chief executive Kenya Medical Research Institute (Kemri), Davy Koech and a Mr Dunstan Magu Ngumo.

The anti-graft agency has filed a civil case at the High Court in Nairobi seeking to recover millions from Koech and Ngumo who is a former trustee and signatory of Kemri’s Retirement Benefit Scheme bank accounts.

KACC claims the two used their positions as trustees and signatories between 2000 and 2007 to fraudulently misappropriate Sh509,002,643 belonging to the retirement scheme.

According to documents filed in court, the retirement scheme lost the money. The commission claims the two dishonestly drew and signed cheques on account of the scheme to for their own use when they knew they were not entitled to the funds.

The cheques were allegedly drawn in favour of a secret bank account held at Standard Chartered Bank, Yaya Centre, Nairobi and a private entity known as African Medical Trust Services (Amset) in which Koech is a trustee.

"The defendants knew or ought to have known they were not legally entitled to draw the funds or transfer the funds in question from the accounts of the Retirement Scheme," KACC says.

Through its advocate, Mr Francis Gikonyo Muthuku, the anti-graft agency is accusing the two of failing to act honestly or diligently or run affairs of Kemri’s retirement benefit scheme in the best interest of the fund, its members, sponsors and legitimate beneficiaries.

Further, it claims the two unjustly enriched themselves at the expense and detriment of the scheme.

They also failed to exercise care and diligence before signing or countersigning cheques for payment of funds out of the scheme’s account, KACC claims.

The commission argues Koech signed cheques in favour of Amset where he was a trustee whereas he ought to have known the payment was not due to Amset.

"The plaintiff’s (KACC’s) claim against the defendants is therefore for restitution of the sum of Sh509, 002,643 the total amount of money wrongfully and fraudulently lost as a result of their actions pleaded hereinbefore," says Muthuku.

The commission has also filed another suit against Koech where it is seeking Sh18.5 million.

Through its advocate, Mr Yuvinalis Angima, KACC claims that between August and December 2006, Koech irregularly instructed Standard Charted Bank, Yaya Centre Branch to transfer Sh19.3 million from Kemri account to that of Africa Medical Services Trust (Amset).

KACC alleges Koech transferred the funds without authority or consent of board of Kemri.

According to the commission, Amset is a private trust in which Koech is founder and trustee and it is not in any way related to Kemri neither is there co-operation or collaboration agreement between the two.

KACC alleges the transfer and conversion of the said funds by Koech was done fraudulently with intentions of depriving Kemri of the said funds.

Koech, the commission says, has made several promises and attempts to "restore" the converted funds and has only managed to restore Sh800, 000.

To date, Sh18.5million remains unpaid and that is what the commission is seeking from him.