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Raila, CBK boss feud on Eurobond billions ignites court battle

By Kipchumba Some | January 24th 2016

Efforts to reconcile former Prime Minister Raila Odinga and Central Bank of Kenya (CBK) Chairman Mohammed Nyaoga over the Eurobond saga have collapsed and they now seem headed to the court.

A week ago, Raila named Mr Nyaoga as among top state officers whom he claimed were responsible for the loss of billions of shillings from the Eurobond.

Nyaoga threatened to institute legal proceedings against the former PM unless he (Raila) offers him a full apology.

Raila declined to apologise and the case is headed to court tomorrow when Nyaoga’s lawyer Kennedy Ogeto files the defamation suit papers against Raila.

“Owing to the fact that we have not received any substantiation/retraction and apology as demanded in our letter... We are instructed to advise you that unless we hear from you substantively, and receive your client’s substantiation/retraction and apology by 2pm, Wednesday January 20, 2016, we shall proceed to file the intended suit against your client without any further reference to you,” reads part of a demand letter written by Mr Ogeto to Raila’s lawyer Paul Mwangi.

However, Raila stuck to his guns and rebuffed Nyaoga’s demands, thus setting the stage for what is promising to be a tantalising legal tussle.

“In our client’s view, so long as your client remains as the Chairman of the Board of Directors of Central Bank of Kenya and so long as the Constitution of Kenya, the Public Officer Ethics Act and the Central Bank of Kenya Act continue to read as they do currently, and until when your client exercises his authority and discharges his duties as such chairperson in compliance to the aforesaid legal instruments, your client will be and will remain a “person of interest” in The Eurobond Saga,” read part of a reply letter written on Wednesday by Mr Mwangi to Mr Ogeto.

Persons of interest

On Thursday, Raila appeared to distance Nyaoga and Controller of Budget Agnes Odhiambo from his claims that the two state officers were responsible for the alleged theft of the Eurobond money.

“There seems to be a misunderstanding about the ‘Persons of Interest’. There a few specific people who should be investigated and prosecuted. But others I just mentioned by virtue of their offices. You see, people like the Controller of Budget, her report is already out...we just put her name there by virtue of her position. The same thing with the chairman of the Central Bank. What we are saying is that he has a public duty to convene a meeting with the board and discuss this issue and guide the country. We never said that he was involved in a anyway in a negative manner,” said Raila.

He was speaking on Thursday in his office in his office.

Nyaoga and Ms Odhiambo were among 10 State officers whom Raila said were responsible for the loss of $1.99 billion (Sh173 billion) from Eurobond which was floated by the government in the international markets in 2014.

Raila called them “Persons of Interest” in the ongoing saga.

For months now, the CORD leader has waged a sustained campaign to have the government disclose how the money was spend and has accused top state officers of colluding to hide the truth from Kenyans.

In a press conference on January 14, Raila began his address by saying: “I meet you today with a heavier agenda than the ones we have shared in recent years. I am here to discuss the grand robbery of Kenya by agents of the State through the much talked about Eurobond.”

Others mentioned by Raila as having a role in the alleged disappearance of the funds include Head of Public Service Joseph Kinyua, Finance Cabinet Secretary Henry Rotich and his Principal Secretary Kamau Thugge.

He also mentioned former CBK Governor Njuguna Ndungu, director of financial markets at CBK Mr John Birech and Mr Moses Muthui, the manager financial markets at CBK.

Others are leader were Bernard Muiruri Ndungu, the chief accountant at Treasury and his colleague Julius Kilinda who is the head of the accounting unit at Treasury.

“The scheme is so elaborate, so thick and so reckless that we believe these officers acted for or on instructions from bosses higher up the Executive ladder,” said Raila.

A number of the people mentioned threatened to sue Raila, but it seems so far, Mr Nyaoga is the only one keen on making good his threat.

Nyaoga was appointed by President Uhuru Kenyatta to chair the CBK board in June last year and has maintained that he had no dealings with the Eurobond saga.

Leader of Majority in the National Assembly Aden Duale had urged the officers mentioned by Raila not to sue, saying it will give him undue political mileage.

However, Nyaoga, one of the well-established lawyers in the country, has insisted time and again that he will sue the CORD leader to protect his reputation.

Additional information

This is just another twist in the Eurobond saga which has generated a lot of heat in the political circles. The Opposition insists that the money was swindled by a few top government operatives to fund Jubilee’s 2017 election campaigns.

The Ethics and Anti-Corruption Commission (EACC) investigated the issue and said there was no evidence that money had been embezzled or misappropriated.

However, on Friday the Director of Public Prosecutions Keriako Tobiko returned the Eurobond report to EACC saying there were gaps in it that needed to be filled.

“The ODPP team noted some crucial areas that require clarification and or additional information before a definite decision can be made on this matter. The EACC/DCI team will address these areas and provide the requested clarification and or additional information requested and resubmit file within 14 working days,” he said.

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