Sirisia Member of Parliament John Waluke and business associate Grace Wakhungu have suffered a major blow after the Court of Appeal allowed the Ethics and Anti-Corruption Commission (EACC) to introduce new evidence demonstrating they used forged documents in attempt to defraud the National Cereals and Produce Board (NCPB) Sh564 million two decades ago.

In a ruling delivered by appellate Judges Hannah Okwenguh, John Mativo and Weldon Korir, the court allowed the EACC to introduce new evidence obtained from a South African company that Waluke and Wakhungu claimed they used to import 40,000 tonnes of maize 19 years ago, and on whose basis they submitted an invoice for payment of Sh297 million from NCPB.

The developmet means that EACC through its lead investigator Kipsang Sambai will file the new evidence obtained from Chelsea Freight through Mutual Legal Assistance (MLA) between Kenya and South Africa which was primarily relied on by the Anti-corruption court, demonstrating that Erad, Waluke and Wakhungu forged documents to prove that they purchased and stored 40,000 metric tons of white maize in a South African warehouse as part of a well-orchestrated scheme to justify the fraudulent claim at NCPB.

New evidence

“EACC is hereby allowed to adduce additional evidence by way of affidavit evidence. That the affidavit of one Kipsang Sambai together with the evidence received from South African authorities attached thereto is hereby deemed as duly filed and served upon all the parties to this appeal,” the three judges ruled while allowing the commission to produce the new evidence in Sh564 million case.

In the new evidence, EACC says documents used by Erad Supplies to obtain a first phase payment of Sh297 million from NCPB were forgeries and did not emanate from Chelsea Freight as argued by the two convicts.

“EACC obtained evidence from South African Authorities demonstrating that the documents, purportedly emanating from South African firms on the basis of a huge award of Sh564 million was made, were forgeries and did not emanate from the said firms,” says Sambai in his affidavit.

“For instance, one of the documents on the basis of which storage charges of US$ 1,146,000.00 was awarded to Erad Supplies is forged and did not emanate from the purported supplier/bailee, M/s Chelsea Freight, CK 2002/046548/23, of 14th Floor John Ross House, suite 406/407, Johnson Lane, Durban, 40001, South Africa. Consequently, the Director of Erad Supplies, one Grace Sarapayi Wakhungu, lied on oath and produced false evidence during the arbitration proceedings,” he adds.

Waluke and Wakhungu had secured an award of payment through an arbitration process approved by the High Court but contested by NCPB, in a case that has been pending at the Appellate court since 2012.

In the civil case pending at the Court of Appeal, NCPB with the support of EACC is seeking to set aside the Sh564 million award to Erad Supplies Ltd by an arbitrator and subsequently validated by the High Court requiring the State agency to pay fraudulent claims made by Erad Supplies.

Waluke and Wakhungu were found guilty of using the company to defraud the government in a botched tender to supply 40,000 metric tons of white maize to NCPB.

In seeking to adduce new evidence, EACC, in its application, told the Court of Appeal that the evidence was not available when the High Court considered the matter and upheld a Sh564 million award in favour of Erad Supplies Ltd and its directors Waluke and Wakhungu to the detriment of taxpayers.

Additional evidence

Judges Okwengu, Mativo and Korir in their ruling on Friday said Erad Supplies would not be disadvantaged by introduction of evidence by EACC since it would be accorded an opportunity to challenge it.

The judges ordered Erad supplies to respond to EACC’s additional evidence filed through an affidavit sworn by its investigator within 15 days.

Waluke and Wakhungu, who were ordered to pay more than Sh1 billion each in fines or serve lengthy jail terms, have been claiming in excess of Sh300 million from NCPB, insisting an arbitration order granted them Sh600 million as payment for supply of 40,000 tonnes of maize 19 years ago. The MP and Wakhungu have since appealed the sentence at the Court of Appeal and are out on cash bail of Sh10 million and Sh20 million respectively pending the hearing of the case.

Chief Magistrate Elizabeth Juma, in her June 2020 judgment, ordered Waluke and Wakhungu, as directors of Erad Supplies, to pay back the Sh297 million they had received. NCPB, in the pending appeal, is seeking an order barring Erad supplies from claiming Sh300 million and finding that documents used to secure the award were forgeries.

If the additional evidence aids the commission in firming up its case against Erad Supplies, then it will be a major loss for Waluke and Wakhungu, as they simultaneously fight to win back their liberty and save them from long periods in jail.