A clique of lawyers could have defrauded struggling South Nyanza Sugar Company (Sony Sugar) of millions of shillings by filing fake compensation cases against the firm, documents in our possession show.
Sony Sugar, located in Awendo, Migori County, is battling more than 5,000 cases in various courts in Migori, Kisii and Kehancha towns.
The cases are mainly over non-payment for cane deliveries or compensation for the miller’s failure to harvest farmers’ cane on time, leaving it to rot.
Due to the sheer volume of the cases, coupled with limited legal resources and investigative capacity, the miller is unable to robustly fight the cases or even ascertain their veracity.
Working in cahoots with unscrupulous Sony Sugar staff, the crafty lawyers have taken advantage of the situation to institute thousands of bogus cases against the miller from which they have reaped millions of shillings.
“The ligation issue is a scandal of scary proportions,” Mr Bernard Otieno, the company’s managing director, says. “It’s messy, murky and convoluted, but we will get to the bottom of it.”
According to the documents in our possession, the scam principally involves forging documents of purported claimants, which the lawyers use to file suits against the sugar firm. In some cases, the lawyers re-file old and settled cases in different law courts or even in the same court that handled the original suit, but under a different judge or magistrate.
Apparently, their pursuit of money knows no bounds. The most macabre aspect of the scam is whereby the lawyers file cases in the names of dead persons and without the knowledge of their families.
For example, Samson Ontiri, a sugarcane farmer from Nyabera Village in Gucha Sub-county, died at Tabaka Mission Hospital aged 80 on September 3, 2013. The death certificate indicates that he died from a heart disease.
However, on December 2017 the dead man purportedly filed a civil suit in Rongo against the sugar firm claiming compensation for an unpaid cane delivery.
In the case, filed by Matwetwe & Company Advocates, Ontiri alleges that he lost 63 tonnes of cane after Sony Sugar failed to honour an agreement to buy his produce upon maturity.
The law firm claimed compensation for the two unharvested cycles, interest, and the cost of the suit. To reinforce the law firm’s position, Ontiri allegedly swore a verifying affidavit on the same day the suit was filed, which was also deposited in court.
His eldest son, Mr Moses Ontiri, 63, a retired secondary school teacher, said his family was mortified to learn that his father was involved in a civil suit four years after his death.
In a statement he recorded at Awendo Police Station on May 5, 2018, Mr Ontiri denied ever meeting any lawyer from the law firm or ever instructing anyone to file a claim on behalf of his father.
“I wish to state that the said suit CMCC 687/17 Rongo… is a fraud since my father is deceased. I on behalf of the family won’t like to be associated with the suit.”
The fact that impostors swore affidavits, which were admitted in court, raises the possibility that the scam is being perpetrated in collusion with members of the Judiciary.
A similar case involves Elija Mberesio Onyambu of Kawere IIB, Migori County, who died of tetanus on December 27, 2013, aged 74, the death certificate confirms. However, on July 12, 2018 Odingo & Company Advocates filed a case at a Migori court against Sony Sugar on behalf of the dead man.
Onyambu allegedly recorded a personal statement at the law firm on May 17, 2018, which was filed in court, stating that his plot could produce 32 tonnes of cane which the miller was to buy at Sh3,500 per tonne.
Onyambu then went on to demand Sh112,000 compensation from the cash strapped miller. The sums involved in these cases might seem small but when multiplied over thousands of cases, the fake claims run into millions.
In an attempt to understand why so many of their outgrowers farmers had sued them in the first place, Sony contracted a private investigator to establish the authenticity of some of the cases, beginning with a sample of 100.
“What we found is an intricate embezzlement done via pretence, filing fictitious documents and forgery in over 90 per cent of the cases,” said Mr Kimani Njuki, the CEO of Advanced Forensic Ltd, which is investigating the cases.
Mr Otieno said that before 2014, there were three law firms filing cases against the miller on behalf of aggrieved farmers, but the number has since shot up to more than 40, raising suspicion of possible fraud.
A sample of 50 cases that were given to the private investigator to review put the total claim against Sony Sugar at Sh569,243,808, most of them filed between 2015 and 2016.
The highest claim is for Sh113 million. An MP from Kuria claims to have delivered Sh10 million cane but with no tonnage shown.