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How Kenya Seed MD diverted cash to his family

BUSINESS
By | June 1st 2010

By Wahome Thuku

A managing director diverted millions of shillings from a State corporation to his family, a court heard.

Kenya Seed Company lost more than Sh13.2 million after it was allegedly used to buy building material for the former Managing Director Nathaniel Tum’s private residence between 1997 and 2002.

Another Sh120,000 was allegedly used to buy him two heifers, Sh45,000 spent on two suits, while more than Sh1.5 million bought fertiliser and other farm chemicals for his private company.

Nairobi lawyer Kimamo Kuria told the Court of Appeal that following the revelation of massive misuse of public resources and abuse of office, the then Agriculture Minister Kipruto arap Kirwa fired Tum and other the KSC management in December 2003.

Former Kenya Seed Company Managing Director Nathaniel Tum

The figures were in a report by the Auditor-General after the minister requested an audit. Mr Kuria quoted the audit report to justify the MD’s sacking without giving him and his group a hearing.

The court heard that Sh3.6 million belonging to Kenya Seed bought the Tum family a car, which was later devalued.

Natural justice

Tum and five other former officials have appealed against a 2005 ruling in which High Court Judge Jeanne Gacheche dismissed an application challenging their dismissal.

They claim they were not given a hearing before Mr Kirwa sent them home, contrary to rules of natural justice.

They filed the suit in January 2003 and sued the minister and the Attorney-General. Kuria represents 16 parties with a stake in the company.

They include Kenya Farmers Association and the Agricultural Development Corporation, which owns more than 40 per cent of Kenya Seed Company.

They claim more funds were also used to buy Kenya Seed Company shares for the MD and his family.

But Tum, through lawyer Alfred Nyairo argues the State had admitted they were not given a hearing.

He submitted before Judges Emmanuel O’Kubasu, Erastus Githinji and Philip Waki that the documents detailing the alleged misuse of funds had only been prepared for the High Court case and there was no evidence.

"The minister never mentioned in his affidavit that he had the auditor’s report when he took the action," Mr Nyairo said, adding the minister did not explain why the group was not given a hearing.

Nyairo said Tum’s company and family bought shares in the ordinary market like other people.

He argues KSC was not a state corporation when his clients were dismissed hence the minister’s action was misplaced. The court will deliver the judgement on July 30.

The Kenya Seed Company was one of the State corporations marred in corruption when Narc took over power in 2002.

 

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