The Asset Recovery Agency (ARA) has moved to freeze bank accounts of contractors who supplied goods and services to CMC di Ravenna, the Italian firm at the centre of the Sh21 billion Kimwarer and Arror dams scandal.
Fast Service Solutions, one of CMC di Ravenna’s suppliers, is seeking the court’s intervention after its account at Equity Bank was frozen following an application by the ARA.
ARA has linked the money to proceeds of crime, arguing that the funds in the bank are part of the fraudulent cash obtained by CMC di Ravenna.
The State agency has named in court papers nearly ten other companies that also received funds from CMC di Ravenna.
The Italian contractor is being investigated by the Directorate of Criminal Investigations (DCI), which has claimed that it was paid Sh21 billion for construction of the two dams; Arror and Kimwarer in Elgeyo Marakwet County, but which are non-existent on the ground.
Director of Public Prosecutions Noordin Haji and his DCI counterpart, George Kinoti, are currently in Italy piecing together evidence to back up the fraud case.
Through lawyer Paul Mwangi, Fast Service Solutions, however says that it is not aware of the alleged fraud committed by CMC di Ravenna and that it only supplied business cards, and note pads to the company.
It says it has not been served with the orders freezing its bank accounts and that its director, Shelmith Njeri Mwangi, only learnt of the freeze after Equity Bank denied her access to the account. The company has, however, not disclosed how much money is held in the frozen account.
The firm asserts that ARA’s application at the Anti-Corruption Court, which resulted in the order being granted, was based on speculation and misappropriation of readily explainable transactions conducted in the regular course of Fast Service Solutions’ business.
"Fast Service Solutions was not enjoined in the case before the Anti-Corruption Court, and the duration of the orders is six months thereby leaving the firm without a fair opportunity to address the emerging challenges and allegations," lawyer Mwangi says in court papers.
The firm argues that the bank account in dispute is not holding any funds relating to any of the matters stated to be under investigation.
"The movement of the funds can and ought to have been concluded on the basis of readily available statements and records already availed to ARA," states the lawyer.
The freeze orders are to remain in force for six months.
The orders have also created an atmosphere of uncertainty as to which of Fast Service Solutions’ bank accounts or assets or those of third parties and clients shall be frozen.
In May this year, the Italian firm obtained a temporary order barring any of the 251 companies it owes money in Kenya from pursuing it in local courts. The orders were issued by the High Court after the company applied to have the bankruptcy case it has filed in Italy recognised as the main proceedings against it.
CMC di Ravenna filed the application in a suit Barclays Bank filed against it, seeking to repossess 98 vehicles and equipment. The bank wants to auction the vehicles and equipment to recover a Sh595 million loan.
Fast Service Solutions has been directed to serve ARA, and Equity Bank with the court papers. The case will be heard on July 18.