Lands official, wife to forfeit Sh426 million fortune over unexplained wealth

Lands official and wife ordered to forfeit Sh233.6m in assets over unexplained wealth. [File, Courtesy]

The Anti-Corruption High Court has ordered a Lands Ministry officer at Thika to forfeit more than Sh426 million in 18 properties and three high-end vehicles valued at Sh11 million to the government.

 In his judgment, Justice Bernard Musyoki ruled that Felix Mecha Nyakundi could not provide a plausible explanation for how he amassed his wealth, alongside money transacted and wealth registered to his wife, Stella Nyaboke Otwori and a hotel company under his daughter’s name, Corazon. 

The Judge observed that although the two had two separate companies, they could not tell the court why and how money flowed to their individual accounts despite claiming that they were in business.

He observed that Mecha had claimed that one of the accounts was used for timber farming proceeds.

However, the judge said that although he submitted permits and leases as proof of the source of the money, he never showed where the timber or trees were being sold and to whom.

Justice Musyoki said that the officer was too casual in telling his side of the story after the Ethics and Anti-Corruption Commission (EACC) argued that he had unexplained wealth. He was of the view that the Abdi Ahmed Mohamud-led commission had tainted the money in his account and that of his wife with illicit money.

“Trading permits, licences and lease agreements are not proof of payments or income from the relevant business. In addition to the above, I do not believe that a business involving the amounts of money involved in this matter would be done in such a casual manner and without proper documentation in the form of vouchers, invoices, orders or financial transaction documents,” ruled Musyoki.

He, however, excluded a property in Malindi that Mecha and Nyaboke had acquired before September 9, 2022, after finding that this was beyond the EACC’s interest.

“A person cannot be called upon to explain acquisition of wealth during a period outside that the plaintiff is interested in as the purport of the said Section is to give a person suspected to be having unexplained wealth sufficient notice and opportunity to explain specific and targeted properties,” he said.

“Anything outside the period indicated in the notice is of no relevance to the subsequent suit unless there is need to explain or set the context of the investigations or an issue arising in the suit.”

He observed that Mecha was a senior officer in an office responsible for resettling landless people, from which Nyaboke was allocated several plots despite not being in the list of the beneficiaries of the settlement scheme. For this, he ruled that Kilifi/Chakama phase II Scheme/1851, Kilifi/Chakama phase II Scheme/1072, Kilifi/Chakama phase II Scheme/1095, Kilifi/Chakama phase II Scheme/1259, Kilifi/Chakama phase II Scheme/30, Kilifi/Chakama phase II Scheme/491 and Mavueni B Settlement Scheme/2186 were unexplained assets.

He said that his salary and the amount placed in court by investigators could not add up.

Felix Mecha Nyakundi could not provide a plausible explanation for how he amassed his wealth.

"Based on the above and having gone through the affidavit of the plaintiff’s investigator and in comparison, with the 1st defendant’s known sources of income coupled with the fact that the amount 1st defendant was earning had a big apparent disparity with the value of the queried properties, I conclude that the plaintiff has established a prima fascie case justifying the requirement for the defendants to explain their wealth or assets,” the Judge added.

The EACC pursued Mecha and Nyaboke after an analysis of their bank and mobile money transactions. It revealed that they had transacted a total of Sh467 million through bank and M-Pesa accounts.

The money trail also led investigators to Bantu Hotel and Resort Company and Festemagra Investment Limited

It stated that it got Sh340,000 cash from Mecha in addition to Sh104 million in his two bank accounts and two mobile phones.

In his response, Mecha claimed that Sh50 million from one of his accounts was his salary, allowances and income from forest produce, logging, farming and his wife’s savings.

He also claimed that he received Sh310,000 from Nyaboke’s insurance dues.

However, EACC insisted that there was no such business, as he never declared the money in his tax returns.

It argued that he provided documents which dated back to 2010. According to the commission, there was no entry of Sh310,000 from an insurance company.

Justice Musyoka also found that he had not also explained how Sh16.3 million in a second bank account and another Sh37 million in two M-Pesa lines had been earned.

The judge also threw out his explanation that he had held some Sh340,000 for the hotel. According to the Judge, some Sh3.7 million was also seized from the same hotel, with an explanation that it was waiting to be deposited into the bank.

He queried how Mecha had money meant for the hotel in his house.

Nyaboke also claimed that she was engaged in farming, supplying sand and catering services. However, the Judge noted that she only gave a permit for logging. He noted that they could not show where the company was or any of their employees.

“A business that has transactions of as much as over Sh88 million would be expected to have records of its business including its operations office or location and employees. It cannot be a one person’s show.”

“In the circumstances, I am persuaded that the logging permits and the accompanying leases were a decoy to mislead and divert attention of an illegal business and unless the 2nd defendant gives a better explanation and strict proof of existence of the businesses, the transactions must be declared to be unexplained,” he continued.

He also ruled that she ought to have given an account of how investment in treasury and infrastructure bonds and bills gave them Sh10.3 million seed capital.

Justice Musyoka also dismissed Bantu Hotel’s explanation that it had ploughed back its Sh116.4 million for the development of four properties in Nairobi.

The Judge was of the view that the story given was not a true reflection of profits between 2017 and March 2024, and there was no evidence to show a transfer of Sh 69 million from Festemagra.

He also noted that although the hotel claimed that the properties were valued at Sh60 million, it never gave evidence to support this.

He noted that the hotel’s director was one Corazon, a daughter to the Mecha.

“The third defendant has not even attempted to demonstrate the source of the capital that promoted and financed its incorporation and establishment. The directors of the third defendant, who in no doubt were the promoters, are closely related to the first defendant,” he said.