Mathira MP Rigathi Gachagua had purported to finance the youth to do business but instead used their companies to win tenders from county governments.

One of the proxy companies was awarded tenders Sh113 million by two counties out of which he transferred Sh112 million to his personal account.

In one of the tenders by the Bungoma County in September 2014, Gachagua instructed Encartar Diagnostics Limited to quote Sh120 million, up from the initial Sh65 million it had quoted, promising to have the higher amount paid out.

 “Under his instructions we filled in a new price schedule of Sh123.92 million.

After we were awarded the tender and we informed him, he communicated with Rafiki Deposit Taking Microfinance (DTM) to give us a loan,” Jimacarter Njagi said.

Detectives revealed that accounts held at the Rafiki DTM had been used to get loans.

However, these “loans” were used to cover-up for funds received from government departments or inter-company transfers in a bid to conceal the ultimate beneficiaries of the funds, detectives believe.

Njagi told investigators that he was introduced to Gachagua by a friend who told him the MP “wanted to finance some youth to do business”. Gachagua told them that they would share payments on a 50-50 basis.

“We also agreed to open an account with Rafiki Micro Finance Bank where all the payments would be channeled,” he said.

The first tender was to supply the Nyeri County Government, then headed by the Mathira MP’s late brother Nderitu Gachagua, with dental materials.

During the same period, they got a tender to supply an incinerator housing to Msambweni District Hospital in Kwale County valued at Sh12 million. They were, however, paid Sh9.6 million.

The total payments from both counties was Sh113 million. “Out of the Sh113 million, Gachagua transferred about Sh112 million to his personal account,” Njagi said. 

As a result, Njagi did not pay the supplier nor clear the bank loan. Gachagua would sometimes instruct him to sign blank bank slips and leave them with his personal secretary who was Njagi’s co-signatory, according to detectives investigating the case.

Kwale County got a raw deal as the youth could not complete the work as Gachagua had taken all the money.

The MP also used phoney companies by salonists Julia Muthoni Mwangi and Anne Mukenya Kimemia.

Muthoni was Gachagua’s employee at his Ellison Hair dressing based at the Anniversary Towers in Nairobi’s Central Business District, according to information obtained by the police.She registered a cleaning company, Klinshine Limited, that used to clean Gachagua’s office.

She is also the owner of Asoma Enterprises which obtained tenders from the Nyeri county government for upgrading Thungari dispensary bridge road, Karafani-Gatome road, installation of culverts at Charity-Manooro road, among many others.

She was also awarded a tender for household irrigation water storage in Olomurang ward, Laikipia County, for Sh19,920,953 in May 2018.

On August 17, 2018, she transferred a total of Sh17.4 million to Wamunyoro Investments Ltd, owned by Gachagua and his wife, claiming she had hired their equipment.

Mukenya told detectives that she had done business worth Sh16.8 million with Nyeri County government between 2014 and 2015, the Ministry of Lands (Sh75.8 million) and State Departments for Higher Education, Interior and Public Service and Youth Affairs.

On April 3, 2017, she transferred Sh4.8 million to Klinshine Ltd which she claimed was to fund a deal.

Investigations revealed that they had no known office space, staff and employees and instead operated from Gachagua’s office at Liaison House.

An Mpesa agent, Julianne Jahenda Makaa, registered a company, Skytop Agencies, which was awarded tenders to upgrade roads within Nyeri County, and other tenders in Bungoma County, then headed by current Senate Speaker Kenneth Lusaka.

She also won tenders with the National Irrigation Board (NIB) for household irrigation water storage in Gakawa, Nyeri, (Sh19.79 million) and Naromoru (Sh19.98 million)

Joint account

David Nyangi Nguru, the owner of Rapid Medical Supplies Ltd, on his part, told detectives that he met Gachagua who agreed to finance him.

The MP later introduced him to Ann Nduta Ruo, a senior staff member at Rafiki to facilitate a joint account opening together with Makaa.

Gachagua helped them get a tender for supplying dialysis machines to Nyeri County.

On December 29, 2014, they were paid a total of Sh27.49 million and he transferred Sh6 million to Gachagua’s account.

“I withdrew Sh5.4 million which was to settle the bills and share with Jimcarter Muriungi,” he said.

He later got a tender to install laboratory unit equipment at Karatina sub-county hospital worth Sh7.8 million. Gachagua organised a loan from Rafiki bank for the tender.

They were also awarded another tender and on January 15, 2015, were paid Sh12.1 million by the Nyeri County government.

He immediately transferred Sh3 million to Gachagua and another Sh11.19 million to the MP’s secretary.

“We were to agree on how to share the profit from two projects as initially agreed but Gachagua asked me to transfer Sh11 million to Skytop Agencies,” he said.

Gachagua also helped them get a tender to supply five ambulances to the Kisii County government worth Sh45 million.

They, however, disagreed with the MP on how to share the payment. As a result, the Sh16 million loan he took from Rafiki is yet to be paid.

Transactions through the Rafiki DTM were used to conceal beneficiaries, according to findings of the investigations.

On July 2, 2015, for instance, Crystal Kenya Ltd account at Rafiki DTM transferred Sh50 million to the Chase Bank account belonging to Nderitu- then Nyeri Governor. The cash transfer was part of payment for purchase of two plots in Mombasa. 

On November 12, the same year, Technical Supplies received a payment of Sh66.3 million from the Ministry of Lands. Encartar Diagnostics Ltd account at Rafiki DTM received funds majorly from Bungoma and Kwale county governments.

A total of Sh113, 009, 913 was received from the  two counties, out of which Sh112,404,711 was transferred to Gachagua.

Out of this, Sh77,404,711 was indicated as funds from loans into the Encartar Diagnostics account.

“Despite there having funds in the account from loans and inter-company transfers, the total transfers to Gachagua indicate he was the ultimate beneficiary of the funds received from Bungoma and Kwale counties,” reads the investigations report.

The loans and inter-account transfers were used to conceal funds from counties, according to detectives.

There were also cases of conflict of interest where some companies received payments from Tana Athi River Development Authority (Tarda) and entities that were funded by Mathira CDF.

Former Cabinet Secretary Mwangi Kiunjuri, for example, was paid Sh5.8 million from a company associated with the Mathira CDF chairman who is said to have imported several track shovels the CS wanted to buy.

The High Court had frozen two of Gachagua’s accounts with more than Sh200 million at Rafiki DTM.

A probe revealed that withdrawals totalling Sh7.3 billion were made through the bank, leaving only Sh200 million.