Court rules Shem Ochuodho has a case to answer in Sh827m Kenya Pipeline fraud case

A Nairobi court has ruled that former Kenya Pipeline Company (KPC) Managing Director Dr Shem Ochuodho has a case to answer over allegations of conspiring to defraud the company of more than Sh827 million.

Milimani Anti-Corruption Court principal magistrate Zipporah Gichana put Ochuodho on his defence alongside his co-accused person, namely Janice Theresia Wanjiku Kiarie alias Terry Wijenje.

In the case, Ochuodho and former director of a debt-refinancing company, Terry Wijenje of Triple A Capital Ltd, are accused of conspiracy to defraud KPC of Sh827 million.

The two were put on their defence after over 20 prosecution witnesses completed their testimonies in the case, which has been pending in court since 2010, with numerous applications from both defence and prosecution.

The magistrate directed the case to be mentioned on July 3, to fix defence hearing dates.

Earlier during the hearing, one of the witnesses, who is a former Kenya Pipeline Company board Member, told the court that KPC board did not approve the borrowing of Sh 2 billion from Triple A Capital Limited in a case in which former pipeline director Shem Ochuodho is charged with conspiracy to defraud over Sh800 million.

Caleb Olall said this while testifying in a case where Ochuodho is charged with conspiring to defraud the company over shs 827 million.

In his evidence in chief, Olall said the company board did not direct the management to put aside funds for payment of the same.

"I have been shown a certified copy of the said minutes, but wish to state that they are not a reflection of our discussions. It is in my view that the said minutes could have been doctored, "said the witness.

He also said that the KPC management did not follow the proper procedure in securing the said loan since they were communicating and seeking approval from the Ministries of Energy and Finance before exhausting the board process and before getting the full board approval.

He said during the entire period when discussion on Triple " A" Capital Limited funding was ongoing, there was a lot of acrimony, bullying of Board Members by the board chairman and the managing director. This would sometimes extend to threats of sacking.

"He told the court that, if you disagreed with the appointing authority, you could be sacked anytime". Said Olall.

He further said that no further presentation from KPC management or discussion was arranged for the board regarding the borrowing arrangement until the Permanent Secretary of Energy called a special board meeting to discuss the same.

" The board was never given the terms of the proposed borrowing or any bids/evaluation report to adjudicate. This is despite several requests by the board members of KPC management ", he said.

However, he said the Board made a blanket approval for the funding on strength of the approvals already obtained from the minister for finance and minister for energy, the fact that the contract documents had already been okayed by the attorney general's office and further that other documents like cash flow had been submitted to ministry of energy.

Other Topics To Read

• National
• Kenya pipeline company
• KPC
• Dr Shem Ochuodho
• Shem Ochuodho fraud case
• Court rules Shem Ochuodho has a case to answer in Sh827m Kenya Pipeline fraud case
• Headlines

Caleb told the court that, due to a lack of a proper board at KPC for some time, he personally addressed the note to the Inspector of State Corporations on the matter.

The prosecution alleged that between May 2003 and July 2004, Ochuodho and other board members conspired to defraud KPC of Sh827 million through a refinancing deal that required KPC to pay Triple A Capital Ltd credit charges, despite the company lacking funds to settle KPC’s international debts.

Ochuodho is accused of fraudulently instructing Standard Chartered Bank to pay Triple A Capital Ltd over Sh1.25 billion from KPC’s account, claiming it was a refund for a payment to Export Development Canada, despite no such payment being made.