Bungled anti-counterfeit raid could cost tax payers Sh2bn

A bungled raid by the Anti-Counterfeit Agency (ACA) in two Nairobi homes for contraband goods in June 2015 could cost the taxpayer up to Sh2 billion in compensation if a case filed in court is successful.

The Nation has learnt that the widely publicised seizure of goods worth Sh35 million from homes belonging to businessman James Kimani and his wife Anne Nyokabi in Nairobi was riddled with mistakes that have now come back to haunt the authorities in the fight against counterfeits.

A court ruling delivered two weeks ago describes a series of apparent mistakes in handling the seized goods, neglected procedures and a weak investigation, which caused the dismissal of a criminal case and paved way for a civil suit against the agency with a demand for compensation. 

Senior principal magistrate Theresa Nyangena in a 40-page ruling dismissed the case filed by ACA, citing procedural mistakes and glaring failures by the witnesses brought in court to testify against the accused and even declared the seizure of the goods illegal.

“The court finds the seizure illegal due to the failure by the officers who seized the goods to follow mandatory procedures sanctioned by the law. In this regard, the court finds that there was carelessness and negligence on the part of the inspector in the execution of the duty as provided by the Anti-Counterfeit Act,” the magistrate ruled.

FERRY GOODS

After the six-hour raid on the night of June 4, 2015, officers used two police lorries and two pick-ups to ferry the goods to an ACA depot in Kiang’ombe. This marked the first blunder since all the goods, instead of just samples, were taken for verification.

Journalists were then called to the depot where ACA Executive Director John Akoten announced the big seizure, saying the goods were suspected to be counterfeit and trademark owners had confirmed their suspicion.

The couple’s home in Loresho had been sealed by six Administration Police officers for two weeks. Police Spokesperson George Kinoti later claimed that officers had turned down a Sh10 million bribe in the operation.

Days later, surveillance camera footage showed police officers apparently looting personal effects from the house. Ms Nyokabi described losing jewellery and foreign currency.

It would also emerge that ACA officials could not account for the seized goods in their custody as the items were also moved from one godown to another without any inventories.

In court, ACA investigating officer Casper Oluoch said he could not remember how the exhibits moved from one godown to another. He did not tell the court why they were moved, whether it was an additional godown or they were moving everything to a completely new location.

Mr Kimani, the accused, was initially arrested then released before being charged three months later with four counts of having in his possession counterfeit goods contrary to section 32 (a) as read with section 35(1) (a) of the Anti-Counterfeit Act 2008.

The defence led by lawyer John Ogada then filed a “no case to answer” motion in a court battle that stretched more than a year.

CONDUCT RAID

Among the 10 witnesses brought by ACA included Administration Police officer Andrew Ndirangu who said he had been instructed by the Deputy Inspector-General Samuel Arachi to conduct the raid. Neither Mr Arachi nor the other police officers who conducted the raid were called as witnesses.

The officers did not write any statement on the operation and the alleged counterfeit goods they found. Mr Ndirangu said that the officers had written something on a piece of paper and gave a copy to ACA, but this was never presented to court. 

The goods taken from the suspect’s Avenue Park 2 house were never sealed or marked with any identification as required. 

The court also found the arrest of the businessman after police moved to his Loresho home unwarranted since he had not obstructed the investigations.

Some police officers even testified in court that during the two-week siege at the home, they found some items under police guard were tampered with.
Testimonies from the representatives of companies whose brands were allegedly counterfeited were also deemed weak.

A senior export assistant from Kapa Oil, who produced an analysis report in court, said she did not open the samples received from ACA with no marks or seal indicating their source nor had she seen the oil itself. She also said she was not the one who carried out the analysis.

“The court noted that they could not say who did the analysis and what the results were. It is this analysis report which was expected to assist the court to determine if the oil products were counterfeit or otherwise. The witness said the analysis was done under her supervision but could not say who analysed it and the analysis report did not have the name of the analyst,” the judge wrote.

CONFLICTING ACCOUNTS

The witness for Philips, another complainant whose trademarks were allegedly infringed, gave conflicting accounts on whether the bulbs in question were counterfeit. Further, his contract with Philips had expired by the time of giving evidence.

After the case was dismissed, the couple filed suit for compensation. 

The case seeking Sh600 million in special damages alone has listed ACA, the deputy Inspector-General in charge of Administration Police, inspector of police as well as the Attorney-General. Further costs include, among other things,  wrongful arrest and detention, loss of business income and profit as well as defamation.

Lawyer Ogada, who also said his clients were suing the companies involved in the case explained the total amount they were asking for could be as much as Sh2 billion.

On Saturday, Mr Akoten said the agency was holding various goods worth Sh880 million and was concerned that the case had collapsed. He said the agency is appealing.

“Our officers did work hard amid the challenges faced during the raid.  ACA is naturally concerned. However, ACA is appealing the Loresho case and it’s still uncertain what the final outcome will be,” Mr Akoten said.