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Reprieve for Lake Basin Mall suspects after court suspends trial

By Paul Ogemba | May 21st 2021
Stalled multi- million Lake Basin Mall in Kisumu. (Collins Oduor, Standard)

Several accused persons in the Sh4.1 billion Lake Basin Development Authority (LBDA) Mall scandal got a reprieve after the High Court temporarily stopped their prosecution.

Justice James Wakiaga ruled that directors of Erdemann Properties Ltd which was contracted to construct the LBDA Mall in Kisumu had made a strong case against their prosecution to warrant the orders suspending the trial.

“I find that the applicants have established grounds for grant of the order to stop the trial based on the evidence they have submitted. The court will be failing in its constitutional mandate of protecting the rights of the applicants if it does not stop the prosecution,” ruled Wakiaga.

Although the orders were issued following an application by Erdemann Properties Ltd and its directors Zeyun Yang and Zhang Jing, it will also apply to their 17 co-accused whose trial will also be suspended.

The accused include Bobasi MP Innocent Momanyi, former Kisumu County Assembly Speaker Onyango Oloo and former LBDA Managing Director Peter Abok.

Others are LBDA Board of Directors George Odawa, Anthony Kiprono, David Oyosi, John Mango, John Onyango, Boniface Simba, William Omoding, Jimmy Nabwera, Alex Mukabwa, Mary Micheka, Kennedy Musebe, Michael Obora, Joash Odhiambo, Dennis Mulaa and Josiah Okumu.

Justice Wakiaga ruled that the company’s directors had proved that their prosecution is illegal given that their involvement in the LBDA Mall was a contractual agreement approved by the Attorney General that should not warrant criminal prosecution.

“The issue at the end of the day would be as to whether they are being prosecuted as a result of their demand for settlement of their dues and whether the government is using the prosecution to frustrate them from seeking the contractual amount,” Wakiaga said.

Zeyun and Zhang challenged the prosecution arguing that the charges were illegal and meant to intimidate and stop them from pursuing their balance owed.

Through lawyer Wilfred Lusi, they argued that they had delivered the complete Mall which had already been put to commercial use and were surprised when the prosecution recommended the charges when they demanded the payments.

“The charges against the directors were actuated by the desire to punish them for pursuing what they had worked for. They were legally awarded the tender after a successful bid, and nothing in the contract suggests they were engaged in corruption,” said Lusi.

According to Lusi, the issues which formed the basis of charging the company directors should have been referred to arbitration as was provided in the contract.

He added that the AG had also rendered a legal opinion on the validity of the contract which authorised the payment of the sums and prove that there was no fraud involved.

Justice Wakiaga agreed with the submissions, ruling that it will be unfair to continue with the trial when the directors had raised valid questions about their prosecution which should be determined first before the corruption case proceeds.

The directors alongside the other suspects were last year charged with several counts of conspiracy, with the prosecution’s case being that they conspired to defraud public funds by inflating the cost of constructing the mall from Sh2.4 billion to Sh4.1 billion. 


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