Sirisia MP John Waluke and his business associate Grace Wakhungu yesterday started fighting their combined 139 years jail sentence for a fraudulent maize supply deal at the National Cereals and Produce Board (NCPB) in 2004.

In the case before the Anti-Corruption High Court, the pair is also fighting a fine of Sh2 billion imposed by the trial court two years ago.  

Waluke’s advocates were the first to prosecute their appeal in a bid to rescue him from the 69-year imprisonment term imposed by the trial court. 

The MP’s lawyers led by Elisha Ongoya submitted that the trial magistrate Elizabeth Juma erred in law when she convicted Waluke of three counts of fraudulently acquiring a total of Sh313 million in the absence of any evidence that he had received any of the money specified in those counts.

“There was an error on the part of the trial magistrate when she concluded without evidence that the approximately Sh313 million that was subject matter of counts 3,4,5 of the charge sheet out of the accumulated claims of Sh600 million was on account of storage charges and not lost profits, interest, and cost of litigation which were distinct separate and impugned awards from the arbitration proceedings,” Ongoya told the court.

The magistrate found guilty the two who are shareholders of Erad Supplies and General Contracts Limited of pocketing Sh313 million without supplying a single grain of maize.

While urging the court to quash the entire conviction and sentence, the lawyer submitted that the monies paid to the two and their firm was done following the due process of the law.

Ongoya told Justice Esther Maina the Sh313 million payout was lawful after an arbitrator ruled in favour of their company — Erad Supplies Ltd.

Arbitration award

“The monies were paid out of court orders. The money was paid following the due process of the law. The payment was made pursuant to an arbitration award,” said Ongoya.

The court heard that NCPB had breached a contract for the supply of maize, which resulted in the arbitrator making an award of Sh313 million on account of loss of profit, and storage costs due to Erad.

The decision was challenged at the High Court but no order was granted to set aside the award. The matter is now currently pending at the Court of appeal.

The court heard that the monies were lawfully paid to Waluke, Wakhungu and the firm following an award from the arbitration proceedings and a High Court order seeking to have NCPB pay Erad damages namely loss of profit, cost of storage, cost of litigation and incurred interest totaling to $3,160,000.

“It is unimaginable that such a payment made pursuant to such arbitration award against which allegations of fraud were made and dismissed by the high court on lower standard of on balance o probabilities can now turn around proved on a high standard of reasonable ground on a court inferior to the high court,” said the lawyer. 

Erad sued NCPB arguing that by the time the tender was cancelled, it had already procured the maize from Ethiopia and that it was being stored by Chelsea Freight, a South African firm, in Djibouti.

They claimed that the maize was stored by the South African firm in Djibouti for a period of 123 days for which they were charged $1,146,000.00 and that they anticipated profit amounting to $1,960,000. In total the accused demanded compensation of $ 3,106,000.00 as loss of profit and storage charges.