Prices of the 18 security projects linked to the Anglo Leasing scandal were grossly inflated, a court heard yesterday.
In his opening statement, State Counsel Mungai Warui said the prosecution would adduce evidence to demonstrate that as a consequence of actions by senior government officials, the Postal Corporation of Kenya entered into a questionable contract in which the Government lost huge sums of money.
Mr Warui said a special audit conducted by former Auditor General Evanson Mwai between 2004 and 2006, and concerning the financing, procurement and implementation of security-related projects showed they were done without Parliament's approval.
"It is evident the prices of the equipment were grossly inflated compared to market prices at the time," Warui told the court.
Those charged in the case include Kisii County Senator Chris Obure, former Postmaster General Francis Chahonyo and former permanent secretaries Dave Mwangi and Sammy Kyungu. Former Finance Secretary Samuel Bundotich was charged with abuse of office and conspiracy to defraud the Government.
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Yesterday, Warui told Trial Magistrate Alice Mwangi that Mr Chahonyo met with one Micheal Allan, an employee of Spacenet Incorporated, who promised to supply VSAT equipment. The equipment was supposed to deliver Internet services to remote areas.
"The prosecution has evidence to show that after the meeting, Chahonyo entered into correspondence with Mr Allan in which he accepted the proposal. We shall also be able to demonstrate that instead of taking the proposal to the board of directors for discussion on whether to accept or reject it, he did not," Warui told the court.
He said no due diligence was conducted to establish the legal capacity of Spacenet and its professional and technical competence was not considered.
Mwai, who was the first prosecution witness to testify, took the court through an audit report giving details of all the 18 projects.
The hearing continues today as lawyers cross-examine Evanson Mwai.