Court suspends order to freeze tycoon Humphrey Kariuki's accounts

Business tycoon Humphrey Kariuki, who is being sought by police in a Sh41 billion tax evasion case, was reprieved on Thursday by a court's decision to suspend an order for his accounts to be frozen.

Milimani Resident Magistrate Muthoni Nzibe also directed police not to attach the aircrafts, ships, 45 cars, movable and immovable properties of Mr Kariuki and his two companies - African Spirits Limited (ASL) and Wow Beverages Limited (WBL).

This is until cases by Director of Public Prosecution Noordin Haji and WBL are determined.

The DPP named Mr Kariuki, ASL and WBL as the respondents in the case.

NO LIST

While issuing the ruling, Ms Nzibe noted that the DPP was on August 9 directed to file a list of the properties and bank accounts but had not done so by Thursday.

“[Seven days later], the DPP has not filed inventory to enable this court to [issue] proper directives. He did not comply with the orders of this court,” she said.

State prosecutor Catherine Mwaniki said Wilson Airport and Fairmont Mount Kenya Safari Club in Nanyuki, where Mr Kariuki's aircrafts are, had been served with the orders.

The investigating officer also said that the orders to free accounts had been served to Kenya Commercial Bank and National Bank Limited but had not been effected.

The officer said the list would be submitted to the court before close of business.

CONFLICTING ORDER

Ms Mwaniki had asked the magistrate to set aside a conflicting order granted to WBL by Senior Resident Magistrate Elector Riany on August 14, suspending the freeze order that Ms Nzibe granted on August 9.

She noted, "The orders for attaching the properties and freezing the accounts of Mr Kariuki can only be set aside by the High Court and not by a magistrate of equal jurisdiction. I pray you set it aside and allow police to execute your order of August 9."

The prosecutor said Ms Riany issued the order to WBL which was not represented in the criminal case pending before Chief Magistrate Francis Andayi.

She said ASL is represented by lawyer Manases Mwangi who said the board of directors will meet to agree on who will plead on its behalf.

Ms Mwaniki further disclosed that a suspect, Robert Thinji Murithi, swore an affidavit claiming he was the Managing Director of WBL while iTax records identify Mr Kariuki and runaway suspect Stuart Gerald Herd as the directors.

She also told the court that WBL served the DPP with its application to have orders suspending the property seizure and bank freeze extended some four minutes to 5pm on Wednesday.

The prosecutor sought time to respond and avail the list of properties and bank accounts.

DEFENCE

But defence lawyers Mack Ouma and Benjamin Musyoki sought extension of the order against the seizures, saying the DPP abused the court process to obtain them.

Mr Ouma also said the orders sought were meant for another company, not WBL, while Mr Musyoki said the orders the DPP sought were "overboard, general and with the effect of shutting down, crippling and thwarting" the business of WBL.

Mr Musyoki noted that WBL will suffer "grave, excessive, punitive and unjustified harm, loss, damage, prejudice and loss of business".

The lawyers further said the orders of August 9 were obtained in bad faith since it was not disclosed that Mr Kariuki did not take plea and was scheduled to appear in court on August 19.

They also accused the DPP of attempting to abuse his powers and the Constitution.

21 COUNTS

Mr Kariuki, Mr Herd and several others are facing a total of 21 counts of tax evasion and being in possession of counterfeit excise duty stamps.

Among the charges are failing to pay Sh17.7 billion to the commissioner of domestic taxes between February 1, 2016 and December 3, 2018.

The other accused parties are Peter Njenga Kuria, Murithi, Geoffrey Kaaria Kinoti Mbobua, Simon Maundu, Kepha Githu Gekaria, ASL and WBL.

Ms Nzibe directed the parties to exchange documents then appear for a hearing on August 21.