Other issues raised against EACC chairman

What you need to know:

  • Nakuru-based organisation filed a case alleging he was not suitable for appointment.
  • One allegation related to an affidavit Matemu swore and filed in a civil suit involving a company.

Other than the complaint to the President from his fellow commissioners, EACC chairman Mumo Matemu has faced integrity complaints from other quarters.

When he was nominated for appointment, a Nakuru-based civil organisation, Trusted Society of Human Rights Alliance, filed a case in the High Court alleging that he was unsuitable for appointment.

The suit claimed that while serving in senior positions at the Agricultural Finance Corporation, Mr Matemu swore an affidavit with false information on the amount of money that a company known as Rift Valley Agricultural Contractors Limited owed the corporation.

Second, they said, as the legal officer at the Agricultural Finance Corporation, he approved certain loans which had not been properly secured, and whose proceeds were paid out in fraudulent and unclear circumstances.

In court, two specific instances involving Rift Valley Contractors were highlighted to demonstrate that the allegations were both serious and plausible enough to warrant a proper inquiry. 

It was alleged that Mr Matemu was involved in approving a loan of Sh24 million to Rift Valley Contractors using a land title in Nakuru as collateral. 

However, a copy of the official search for that title revealed that no charge was ever registered against the title, raising suspicions about the integrity of the transaction.

Suspicions were further heightened by the fact that the loan advanced was never paid to the account of Rift Valley Contractors but was deposited in another bank account in what was claimed to be “dubious” circumstances.

A second allegation related to an affidavit Mr Matemu swore and filed in a civil suit involving Rift Valley Contractors.

The suit was filed by the firm and one of its directors, against another director of the same company. 

Down the line, Agricultural Finance Corporation became involved and in an affidavit filed in the suit, Mr Matemu, in his capacity as chief legal officer, swore that the corporation was owed upwards of Sh131 million by Rift Valley Contractors, and that all or most properties belonging to the firm were charged to Agricultural Finance Corporation which, then, enjoyed priority over any receiver who might otherwise be appointed over the property belonging to the contractors. 

FALSE STATEMENTS

The suit against Mr Matemu, however, claimed that the statements in his affidavit were untrue and amounted to perjury since he knew, or must have had reason to know, that most of the loans advanced to Rift Valley Contractors had been paid off. 

The petitioner attached loan statements in support of the argument that Mr Matemu committed perjury in swearing that affidavit, and that the perjury was in furtherance of a nefarious scheme to loot funds from Agricultural Finance Corporation.

Evidence was shown in court that an officer at the Criminal Investigations Department had stated that there was substance in some of the allegations and urged that more resources – including experts in forensic science and auditing and computer analysis — be dedicated to the case. That letter was written on June 7, 2011.

The court noted that the allegations against Mr Matemu were that, at worst, he was involved in several shady deals that resulted in losses by Agricultural Finance Corporation of millions of taxpayers’ money and that, at best, he was, at least, criminally negligent in failing to exercise due diligence to prevent fraud that resulted in losses at the corporation. 

The court noted that “it is not clear whether this issue was considered by the selection panel which placed Mr Matemu’s name among the three who were recommended for appointment as chairman of the commission”.

The court also expressed the view that was not clear whether the President and the Prime Minister, in picking Mr Matemu out of the three names submitted to them, gave any consideration to this information.

While the High Court nullified the decision of the National Assembly to appoint Mr Matemu to office, its decision was in turn nullified by the Court of Appeal.