Hearing of Sh51 million fraud case involving Senator Mungatana begins

The hearing of a fraud case involving Tana River Senator Danson Buya Mungatana and 17 other defendants commenced on Wednesday, July 10, in a Malindi court.

Mungatana and the other suspects were accused of defrauding the County Government of Kilifi of Sh51 million.

A former Integrated Financial Management Information System (IFMIS) liaison officer with the County Government, Gabriel Mkare, was the first witness to testify, describing how six companies allegedly linked to Mungatana syphoned the funds from the devolved unit's accounts at the Central Bank of Kenya through fraudulent means.

Mkare narrated to Malindi Chief Magistrate Elizabeth Usui that the fraud was uncovered when an invoice for paying temporary employees, who had gone on strike demanding their salaries, was rejected by the IFMIS system. The system indicated insufficient funds in the relevant vote head, raising suspicions that led to the discovery of irregular transactions.

Under the examination by Senior Prosecuting Counsel Vivien Kambaga, Mkare explained that the companies involved had not gone through the standard identification, validation, procurement, and approval processes of the county government. Consequently, some funds were already withdrawn by the payees before the irregularities were detected.

Mkare detailed the step-by-step payment system, which involved both manual and electronic procedures, highlighting numerous flaws in the approval process of the fraudulent transactions. He provided specific examples of how funds were misappropriated.

Tana River Senator Danson Mungatana. (Photo: Senate)

He mentioned that a company known as Daima One Enterprises received a full payment of Sh7,230,940, but a second transaction of Sh4,100,200 was recalled by the Central Bank of Kenya before withdrawal.

Mkare added that Leadership Edge Associates received Sh7,840,910 and Kilingi Investments Company received Sh6,700,952, but a subsequent transaction of Sh3,109,132 was detected and stopped at the internet banking platform.

Zohali Services Limited withdrew Sh5,390,520, but only Sh125,125 remained, leaving a balance of Sh7,715,000, which was reversed to the county government's account.

Makega Suppliers Limited managed to withdraw Sh3,063,057.20 and Sh6,785,951.20 from transactions worth Sh3,243,958 and Sh7,119,220, respectively, leaving a balance of Sh623,787.60, while Jahazi Investments Company Limited was paid Sh6,012,950 and withdrew almost all, leaving only Sh180,548.80.

Senator Mungatana and six others, including four Kilifi County Government officials and two businesspeople, were arrested by Ethics and Anti-Corruption (EACC) officers on April 11, 2019. The other 11 suspects were apprehended later as EACC collected more evidence to build on the case.

However, the case has faced numerous delays over the past five years as the prosecution sought witnesses.