Sirisia MP John Waluke has been ordered to pay a fine of Sh727 million or serve a 10-year jail sentence in default after he was found guilty of defrauding the National Cereals and Produce Board (NCPB) Sh313 million.
Waluke’s co-accused Grace Wakhungu was fined Sh707 million by Magistrate Elizabeth Juma on Thursday. She will also serve a jail term of 10 years if she fails to pay the fine.
The two were accused of irregularly receiving Sh313 million from NCPB in 2004 through Erad Suppliers Ltd. The court was told that the accused persons received the funds after winning a tender to supply 40,000 tons of white maize to NCPB.
While convicting the three, Magistrate Juma noted that evidence showed the accused forged an invoice to demand payment of the money charged as storage fees for the maize allegedly imported from Ethiopia.
The tender awarded to them was canceled after Erad Supplies failed to prove it had sufficient funds to supply the maize.
Despite not supplying even a single grain of maize to NCPB, the accused ended up pocketing Sh313 million after they sued the State agency, arguing that by the time the contract was canceled, they had already procured the maize from Ethiopia and that it had been stored by South African company Chelsea Freight in Djibouti for 123 days.
They said they were charged $1,146,000 for storage and were anticipating profit amounting to $1,960,000. The court, therefore, awarded the accused compensation totaling $3,106,000 as loss of profit and storage charges.