The hearing of Ksh51 million fraud case involving Tana River Senator Danson Mungatana and 17 others accused of defrauding the County Government of Kilifi of Sh51 million got underway in a Malindi court Wednesday.
A former Integrated Financial Management Information System (IFMIS) liaison officer with the County Government, Mr. Gabriel Mkare, narrated how six companies associated with the law maker syphoned the money from the devolved unit accounts at the Central Bank of Kenya by fraudulent means.
He told Malindi Chief Magistrate Elizabeth Usui that the fraud was discovered after an invoice raised to pay temporary employees of the devolved government who had gone on strike demanding their salaries was rejected by the IFMIS which indicated that there was no money in the vote head.
Mr. Mkare, who was led in his examination in chief by Senior Prosecuting Counsel Vivien Kambaga, said the IFMIS rejection raised suspicion that led to the discovery of transactions that had not followed due process.
He said the companies that had been paid were not known to the county government as they did not go through the identification, validation, procurement and approval processes, but it was too late as some of the payees had already withdrawn the monies wired to their accounts.
He took the court through a step-by-step payment system, which involved both manual and electronic systems, and how the approval process of the fraudulent transactions had numerous flaws as they did not follow the normal procedure.
According to him, Daima One Enterprises received a full payment of Sh7,230,940, but its second transaction of Sh4,100,200 was recalled by the Central Bank of Kenya before it was withdrawn.
He said Leadership Edge Associates received Sh7,840,910 while Kilingi Investments Company received Sh6,700,952 but its transaction of Sh3,109,132 was detected at the internet banking platform and the payment stopped.
Mr. Mkare said Zohali Services Limited withdrew Sh5,390,520 from the county government’s CBK account but withdews only Sh125,125, leaving a balance of 7,715,000, which was reversed to the county government’s account.
Makega Suppliers Limited, which had two transactions worth Ksh3,243,958 and Ksh7,119,220 managed to withdraw Ksh3,063,057.20 and Ksh6,785,951.20 respectively, leaving a total balance of a paltry Kshh623,787.60, he said.
He said Jahazi Investments Company Limited was paid Ksh6,012,950 and withdrew everything except Ksh180,548.80.
Mungatana was dramatically arrested by Ethics and Anti-Corruption (EACC) officers alongside six other people, among them four Kilifi County Government officials and two business people on Thursday April 11, 2019 while the other 11 were arrested later.
The case has been dragging on for the last five years as the prosecution looked for witnesses, which it now says it has obtained.
The hearing of the case started on Monday and is expected to continue uninterrupted until all the witnesses have given their evidence.
