ARA loses bid to recover Sh27.4 million from Burundian firm

The High Court has dismissed the Assets and Recovery Agency (ARA) application to compel East Africa Group Limited, a Burundi construction firm, to forfeit Sh.27.4 million.

ARA accused East Africa Group Limited of obtaining Sh.27,433,690 held at I&M Bank through illegitimate activities of money laundering.

ARA investigations officer Alfred Musalia said that the company received Sh35 million (USD 350,000) from Burundi (foreign jurisdiction) as part of a money laundering scheme.

Musalia said that after receipt of the funds, the company withdrew the same in cash and transacted it to multiple destinations in a suspicious manner.

However, East Africa Group Limited director Nduwimana Aimable said that the funds were payment from the World Bank (WB) for the construction works in Burundi.

Justice Benjamin Musyoki of Milimani Court said the investigation by ARA was based on suspicions and discloses nothing.

The Judge found that ARA failed to establish a prima facie case that the money was proceeds of crime.

He said ARA did nothing more than receiving the information, opening an inquiry file, obtaining investigation warrants and freezing orders, getting the bank statements and analysing them, obtaining the preservation orders and finally filing the forfeiture motion.

“It should be detestable for the applicant (ARA) to conduct what I would call desk investigations and expect to fight the menace of money laundering and prevention of use of proceeds of crimes in the country. It must wake up and do more and help this country enhance the country’s capacity and trigger the potential of legitimate commerce,” said Justice Musyoki.

He faulted ARA for failure to contact the Burundi embassy and WB to ascertain the said tender and transfer of the funds.

The Judge said East Africa Group Limited chose a bank in Kenya for its transaction, but its money has unfortunately been held captive for more than a year.

Justice Musyoki said ARA seems to have a standard affidavit which they copy, paste and edit because the investigations officer’s supporting affidavit still spoke of preservation orders despite dealing with the final forfeiture.

He found that ARA failed to show a single entry showing any cash withdrawal by the East Africa Group Limited.

The Judge ruled that the transfer of the money in large amounts may be a red flag for the detection of money laundering, but that alone does not make the money illegitimate.

Justice Musyoki said that even if the funds were to be proved as proceeds of crimes, the company was entitled to be taken through a reasonably justifiable process of genuine
investigations but not deprivation of use of his property through mere suspicions.

“It has become a custom, at least for the matters I have handled, that the applicant (ARA) tells the court that it has investigated and investigations reveal that the money or property it seeks to forfeit are proceeds of crime or money laundering without giving details. This matter is no different,” he said Justice.

In their defence, Aimable said the company is registered in Kenya and is an affiliate of EIS Company SPRL, Burundi, which was registered in the Republic of Burundi on March 17, 2011, as a provider of engineering services, including road, bridge and construction.

The director told court that the company won a tender for construction works and installations at the Kavimvira Border Post in the South Kivu province of Burundi that serves the border between Burundi and the Democratic Republic of Congo (DRC) at a total cost of sh. 503,357,600 (USD 5,033,576.15).

He said that WB released Sh100, 660,500 (USD 1,006,605) to EIS Company SPRL Burundi through its USD bank account at FIN Bank for the purchase of equipment for use in the Uvira site on the side of the DRC.

Aimable told court that the company transferred USD 350,000 from a Burundi to a Kenya account for the purpose of purchasing the equipment, vehicles and items it needed for the Uvira site.

He said that the company faced challenges in procuring the equipment and vehicles for the project due to international transfer regulations in Burundi that require that the transfer of more than sh.500,000 (USD 5000) must be justified by an import licence confirming that goods imported under the licence are intended for local consumption in Burundi.

Aimable said that company was advised by the bank to open an account with I&M Bank in Kenya to enable them to transfer funds to Kenya.