Sirisia Member of Parliament John Waluke risks losing his seat after a court yesterday found him guilty of fraud involving Sh297 million in shady maize dealings with National Cereals and Produce Board (NCPB).
Waluke was remanded in police custody pending sentencing upon his conviction yesterday by Milimani Anti-Corruption Court Magistrate Elizabeth Juma.
Also indicted of the charges was Grace Wakhungu, who was a co-director with Waluke at Erad Supplies and General Contractors - the firm involved in the deal.
The magistrate found that the Director of Public Prosecutions had demonstrated that the duo had illegally obtained taxpayers’ money from NCPB.
If the court, on Thursday, sentences Waluke to more than six months in jail, he will automatically lose his seat and will no longer be eligible to vie for any leadership position.
“The court finds there was fraud and the accused acquired money by false pretences. The accused persons will be remanded at Kileleshwa Police Station pending their sentencing on June 25,” the court ruled.
The court, however, dismissed a claim that Waluke and Wakhungu uttered false documents.
The court heard that Waluke and Wakhungu made the contested invoice in support of costs allegedly incurred from storing 40,000 tonnes of maize.
In the case, the State alleged that as a director of Erad Supplies and General Contractors, Waluke made a false invoice worth Sh114,600,000 as evidence to support a maize storage claim by Chelsea Freights.
He was also charged with fraudulently acquiring Sh297 million from the public as the cost of storing the maize, which was to be supplied to NCPB.
“On or about March 19, 2013, in Nairobi City County, being the director of Erad Supplies and General Contractors, he jointly and fraudulently acquired Sh297,386,505 purporting to be the costs of storage of 40,000 tonnes of white maize, guilty or not guilty?“ the charges read.
Erad had been in a long-running battle with NCPB over a botched maize supply saga.
In 2003, NCPB floated 180,000 tonnes of maize supply tender. Five companies were picked.
Hala General Trading LLC, Euroworld Commodities Limited, and Erad were contracted to supply 40,000 tonnes each, while Purma Holdings and Freba Investments got 30,000 each.
After a fallout on the payments, NCPB and Erad opted to arbitrate the issue, which then escalated to the Court of Appeal. Arbitrator Evans Thiga ruled in favour of the firm and awarded it Sh564 million as compensation for losses and storage fees.
Aggrieved, the board moved to the High Court and again its case was dismissed by Justice Leonard Njagi. NCPB went to the Court of Appeal but equally lost.
According to NCPB, the firm which Erad had contracted to supply it with maize, Ropack CC International, did not deal with maize business.
In the deal, Erad was supposed to supply 40,000 tonnes of maize, but NCPB allegedly failed to issue letters of credit to enable it to import the maize.
After the ruling, Erad attached NCPB’s account held at Kenya Commercial Bank and some of its assets worth Sh297 million.
But Parliament’s Investment Committee declared that Erad should not be paid as the documents it had used were falsified and invalid. The report tabled before Parliament in 2013 read that Erad was not qualified to supply the maize.
The MP’s fate was sealed last week after High Court judge Mumbi Ngugi dismissed their case challenging prosecution.