Ex-Kenya Re boss fined Sh15m for fraud

Wednesday April 10 2019

Johnson Githaka

Johnson Githaka. FILE PHOTO | NMG 

SAM KIPLAGAT
By SAM KIPLAGAT
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The anti-corruption court has slapped a former director of Kenya Reinsurance Corporation (Kenya Re) with a fine of Sh15.2 million for receiving a Sh7.26 million kickback.

Senior Principal Magistrate Felix Kombo said Johnson Githaka will serve a two-year jail term in case he fails to pay the fine, making his one of the few big-ticket convictions for corruption.

The court found that Mr Githaka fraudulently obtained Sh7.26 million paid by United Insurance Company to Kenya Re as an illegal commission for a multi-million shilling property sale.

According to investigations by the Ethics and Anti-Corruption Commission (EACC), Mr Githaka’s corrupt dealings started when United Insurance Company was placed under statutory management by the Commissioner of Insurance on July 15, 2005.

He demanded a commission of three percent of the Sh242 million sale or Sh7.26 million for an office block belonging to United Insurance.

The Commissioner of Insurance had appointed Kenya Re as the statutory manager of United Insurance. On September 23, 2005, United Insurance invited bids from interested buyers for United Insurance Towers, its headquarters, on Westlands Museum Hill Road.

The building was eventually bought by PTA Reinsurance Company for Sh242 million in a deal that was completed in January 4, 2006

On January 27, 2006, Mr Githaka, then Kenya Re managing director and also the statutory manager of United Insurance, wrote to Muriu Mungai and Co. Advocates instructing them to release the commission of three percent of the sale price to an unspecified agent.

The EACC investigations established that there were no agents in the sale of United Insurance Towers as the process was through competitive bidding.

For his part, Mr Githaka said that since he was a board member of PTA Reinsurance, which purchased United Insurance Towers, he was entitled to the three percent commission, which he later used to buy personal property in Loresho, Nairobi.

The Director of Public Prosecutions in 2009 gave consent to charge Mr Githaka with various offences, including fraudulent acquisition of public property.