Written By Cyrus Kimanga 📝
Graft convict Grace Sarapay Wakhungu has defended the payment of Sh297 million she received from the National Cereals and Produce Board, terming it legal and legitimate.
Ms Wakhungu yesterday told the High Court in Milimani that the money was not obtained fraudulently as alleged by the State.
Through lawyer Paul Muite, Senior Counsel, Ms Wakhungu said the payment was justified as she explained that it stemmed from breach of contract by the NCPB to supply 40,000 metric tonnes of maize.
The contract had been awarded in 2004 to Erad Supplies Ltd, a company she co-wons with Sirisa MP John Waluke.
While prosecuting an appeal against magistrate court’s decision to sentence Ms Wakhungu to 67 years in jail over fraud, Mr Muite said the conviction was not only erroneous but also the trial lacked legal foundation.
“The payment of the money received by the appellant were pursuant to a High Court decree issued approving and adopting an arbitration award. Payments such as this cannot, in law and fact, form basis of a criminal charge of obtaining money fraudulently. Any system of law that would allow payments made by the High Court to be basis of criminal charges can only bring disrepute in the eyes of international justice,” said Mr Muite.
He stated that the payments, which the magistrate court found to be proceeds of fraud, had also been endorsed by the High Court.
The lawyer narrated that a trading company owned by Ms Wakhungu and Mr Waluke, Erad Supplies Ltd, had been contracted by the government in 2004 to supply maize after drought hit the country.
However, NCPB breached the contract by failing to give the company letters of credit upon securing maize abroad and preparing the consignment for shipment.
Mr Muite said the NCPB claimed that the national treasury failed to allocate adequate funds for importation of maize.
Erad sued the State Corporation at an arbitration tribunal, for the breach of contract, and it was awarded damages.
The award was on two different heads, loss of profit where it was awarded US Dollars 1,960,000 and storage charges where it was awarded US Dollars 1,146,000.
While appearing before Justice Esther Maina, the lawyer said the company later proceeded to the High Court for adoption of the arbitral awards.
He said the court ruled in favour of the company and attempts by the NCPB to review the rulings were rejected by three judges, paving way for execution of the judgment and the payments in dispute in year 2013.
The lawyer said the payments formed basis of the corruption case which culminated to conviction and sentence of both Ms Wakhungu and Mr Waluke for theft of Sh297 million from the public.
In the judgment passed in July 2020 the magistrate court sentenced them to a combined 136 years in jail and in the alternative a combined fine of Sh2 billion.
