Jailed Kenya Re ex-boss 'guilty' in fraudulent house sale deal

A former Kenya Reinsurance Corporation finance director, John Faustin Kinyua, currently serving a three-year prison term, was on Thursday found guilty of fraud in the sale of the company's house in Karen, Nairobi.

Kenya Re executives sold the house to Rockhound Properties close to 14 years ago.

Mr Kinyua had been charged alongside Johnson Jackson Githaka (managing director), Jane Florence Otieno (company secretary) and Rockhound director Mary Njeri Ng’ang’a Kimingi.

Ms Kimingi was found guilty of fraudulently acquiring the house, having signed the sale agreements for it on behalf of her company.

FRAUD SCHEME

The Ethics and Anti-Corruption Commission (EACC) investigated the allegation that the property on Ndege Road in Karen had been fraudulently sold to Rockhound.

The officials hatched a scheme in which Rockhound did not pay Kenya Re for the house as monies presented to the reinsurer had been premiums collected from two insurance firms.

According to court findings, the Kenya Re bosses claimed that Sh12,132,504 was deposited from the sale of the house but in reality the money had come from Alexander Forbes (now Eagle Africa Insurance Brokers Limited) and United Insurance Company in form of premiums.

The court heard that Alexander Forbes had sent a cheque of Sh1,070,043, while United Insurance Company had sent one of Sh11,062,461.

ALLEGATIONS

Senior Principal Magistrate Felix Kombo noted that the Kenya Re board was kept in the dark by Mr Githaka, who authorised the sale, and Ms Otieno, who prepared the agreement and engaged a law firm to execute it.

However, Mr Githaka, who is also serving a term in prison over another scandal, and Ms Otieno were let off the hook because the charge sheet was faulty.

On Thursday, Mr Kombo said there was no reason why the officials withheld the information from the board and that the only conclusion he could make was that they were complicit.

“It is my finding that the accused persons jointly contributed to the fraud,” he said.

SECOND OFFENCE

Mr Kinyua and Mr Kimingi were also convicted of claiming Sh132,504 from Kenya Re, alleged to be an overpayment in the purchase of the house.

The court noted, however, that the money was still being held by the law firm which drafted the agreement.

The two will be sentenced on Friday.

Mr Kinyua is currently serving a three-year jail term, handed to him more than a month ago after he was found guilty of tricking taxpayers into buying a house at Embakasi’s Villa Franca Estate.

He was jailed alongside Charles Gichane, a former Heritage Insurance manager. They had been given the alternative of paying fines of Sh7.3 million each.

He is also involved in a pending court dispute over another deal for the sale of the same house.

One Dr Joseph arap Ngok had wanted to buy it at Sh12 million but was only able to pay Kenya Re Sh9 million.