Inside Samuel Gichuru’s Sh20bn Empire

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What started as a simple divorce case filed by former Kenya Power & Lighting Company boss Samuel Gichuru ended up fast-tracking his name to the list of wanted money launderers.

The Sunday Nation has established that British intelligence officers used some of the affidavits sworn in court during the divorce hearing to piece together bits of one of the most brazen cases of corruption during President Moi’s 24 years in office.

Last week the United Kingdom issued a warrant of arrest against Mr Gichuru and Nambale MP Chris Okemo over alleged corruption and money laundering.

Mr Gichuru is alleged to have received bribes and laundered money in excess of Sh1 billion through a company called Windward registered in Jersey, UK. (See separate story).

Sources familiar with the proceedings said Mr Gichuru may have won the divorce case, but his former wife, Salome Njeri, now deceased, dealt him a severe blow by lifting the lid on some of his best-kept secrets and questionable financial dealings.

In a certificate of urgency seeking an equal share of the matrimonial property filed in the Family Court in Nairobi on November 14, 2006, Njeri claimed Mr Gichuru controlled a multi-million-dollar estate, and that he was worth more than what was stated publicly.

She claimed that Mr Gichuru was operating foreign accounts, that some of the property had been acquired illegally and that he was planning to disinherit her by disposing her of the property and transferring some of it to his girlfriend.

“… during my marriage to the respondent, the respondent used to operate various bank accounts both locally and internationally and used to update me on our financial worth and investments,” she said, adding, “since the respondent has petitioned for divorce he has started to alienate, sale or transfer the matrimonial properties to the name of his girlfriend with the sole aim of disentitling me and cheating me of my rightful share of the matrimonial properties.”

Consequently, she asked the court to compel Mr Gichuru to “repatriate and transfer to the jurisdiction of this Honourable Court all the credit balances he holds in banks outside the country and especially the $10 million held with HSBC Bank Jersey Island, Sort Code 40-25-34, Account Number 42767791, P.O. Box 14 St. Helier, Jersey Channel Islands, within seven days of the court’s order”.

However, Mr Gichuru contested the claims, saying they were spurious and malicious.

“…if this was indeed a joint account as alleged nothing would be easier than for the applicant to exhibit bank statements or some other such evidence of the existence of the account or the amount held in the account,” he responded in an affidavit on December 19, 2006.

He also dismissed claims by Njeri in another affidavit sworn on November 22, 2006, that the sum in question and other property had been acquired through illegal means.

“Indeed, in a separate affidavit also sworn on November 22, 2006, the applicant has alleged that the money held in this account as well as other properties owned by me were improperly acquired and I am surprised that she should come to a court of law to lay a claim on what she alleges are ill gotten gains,” he said.

If Mr Gichuru had been taken aback by the former wife’s claims, he must have been chilled to the bone when British police sprung him a warrant of arrest for money laundering over suspicious financial dealings in Jersey Island.

It has also emerged that the money Mr Gichuru is accused of laundering is just a fraction of his vast business empire and fortune.

Friends and former associates interviewed put his worth at a conservative Sh20 billion, though others claimed he has assets in excess of Sh50 billion.

Lawyer Ahmednasir Abdullahi, who represented Ms Njeri in the divorce case in 2006, said she estimated their matrimonial property at between Sh70 billion and Sh100 billion.

In practical terms, Sh100 billion is enough to pay and fund the operations of the military, the police, the Provincial Administration and the Administration Police for a year.

To support her claims, Njeri listed 71 prime properties comprising land and buildings in Nairobi, Mombasa, Nakuru, Kitale, Kiambu, Naivasha, Nyahururu, Kitengela and Mavoko municipality.

They include land in the posh Karen area (five acres) and Mombasa Road, Dolphins Palms in Mombasa, three town houses in Kileleshwa (each worth about Sh30 million) and two flats in Hurlingham.

Other properties are in Kyuna Estate, the middle class Dam Estate in Nairobi and the high-end Spring Valley neighbourhood.

She also named tracts of agricultural land and prime plots in a number of counties, shares in top-notch companies, accounts in six top local banks and rent proceeds from houses in leafy city suburbs.

She further tabulated seven bank accounts locally and abroad and 23 companies in which she claimed Mr Gichuru had shares. These include his former parastatal KPLC, KenGen, Kenya Bus Services Ltd and Kenya Seed Company. Mr Gichuru was also said to own shares in Sasini Tea and Coffee Ltd, Yana Trading, Iberafrica Power and the prestigious Lord Errol – a restaurant in Nairobi’s posh Runda suburb.

One of the overseas accounts listed in the suit papers was in Jersey in the English Channel that held $10 million (over Sh860 million) at the time.

“The properties, shares and bank accounts I disclose herein are a fraction of the properties,” Ms Njeri told the court. “The properties I know and which I list in this case (are) in my humble view less than 10 per cent of what we acquired.”

She asked the court to direct the respondent to produce a full list of the property he owns.

“… pending the hearing and final determination of the suit therein, the court do compel the respondent to disclose and deliver a schedule of the properties, shares in companies and bank accounts registered in his name or his benefit that are unknown to the applicant whether the same is located in the jurisdiction of this court or located in Great Britain, South Africa, United Arab Emirates, Canada and Spain or any other jurisdiction,” she pleaded.

The teacher-turned businesswoman was married to Mr Gichuru for 39 years; they had four children. They were married on December 9, 1967 at the PCEA Dr Arthur Memorial Church in Nakuru, the same year he joined the then Central Rift County Council as an administrative officer.

He joined KPLC in 1974 as an assistant company secretary. He rose through the ranks to become managing director in 1983, lasting at the helm until February 2003.

Njeri claimed that she had contributed substantially to the family property owned either jointly or solely by the respondent.

“During my marriage to the respondent since both of us were gainfully employed we jointly contributed to buy properties either in our joint names, through companies in which we were joint shareholders, in the sole name of the respondent or through companies whose shares are solely held by the respondent …. That even though I am just seeking equal shares of the matrimonial property a careful appraisal of our incomes which was as a result of his salary and my earning initial from my employment and later through the schools I ran will show that I contributed more than the respondent,” she claimed.

Njeri initially worked for the City Council of Nairobi as a teacher for 10 years from 1974 before she left to “concentrate on family business.” In the divorce proceedings, Mr Gichuru testified that their marriage broke down when Njeri moved to Nakuru in 1987.

He said she stopped coming to their city home after three years, and would only show up for social functions like weddings of their children.

Mr Gichuru told the court that she would come as a visitor, arriving in the morning and leaving in the evening. She attended those functions as a mother and not as a wife.

He also stated that during initial periods he would visit her at the Nakuru farm to check on its activities. He specified that since around 1987 they had had no conjugal relations. According to him, her actions affected him mentally and socially.

He testified that he had to shoulder responsibilities of both parents while the children were in school. He further said that as the chief executive of KPLC he was invited to several social and official functions, but was compelled to attend those functions on his own, causing him embarrassment “on continuous basis”.

He further told Justice Kalpana Rawal that Njeri denied him the emotional and social support he required to be successful. The former Mrs Gichuru had charged in her petition that her husband was in an adulterous relationship with Bilha Wanjiku Gachoki.

But Mr Gichuru denied the allegations of cruelty and adultery levelled against him. He testified that Ms Gachoki was his friend and business partner. He told the court that he did not have any adulterous relation with her or with any other woman.

Njeri was unable to prove her allegations beyond reasonable doubt. The bitter court proceedings finally came to a close in November 2006 when Justice Rawal granted the divorce. By the time Njeri died in April last year the property case had not been determined.

Mr Gichuru has since married Ms Gachoki. Our efforts yesterday to get a comment from him failed.Prior to the domestic battles, Mr Gichuru had been in the limelight in 2003 when then Energy minister Ochilo Ayacko appointed a team to audit KPLC.

The appointment of the team, chaired by former Limuru MP George Nyanja, came as the new Narc government took power on the promise of zero tolerance of corruption

The Nyanja team accused Mr Gichuru of stealing millions of shillings from KPLC for nearly two decades, the charge now repeated by Jersey prosecutors. Mr Gichuru also created an artificial power shortages, said the report.

The committee called for the seizure of Mr Gichuru’s property and his subsequent prosecution, recommendations that were never followed through.

“(We found) mismanagement, total abuse of office, because even ethics and morality require that you don’t do certain things,” Mr Nyanja said at the time.

Mr Gichuru refused to comply with a request to appear before the committee, and Mr Ayacko later sent him on compulsory leave. Mr Gichuru later complained in court that the committee did not afford him a fair hearing.

The court found that the Energy minister did not have powers under the law to appoint an audit team.

“Such an act (the appointment of a probe team) is downright illegal and is therefore null and void,” said justices Onesmus Mutungi and Matthew Emukule.

The judges also agreed with Mr Gichuru that the committee that set out to probe KPLC would have been biased since about half of the members were former employees of the corporation and had worked under him.

The court, however, found that Mr Gichuru had refused to appear before the committee to tell his side of the story through what the judges called “posturing”.

But the judges refused to prohibit future use of the report or the documents that were attached on the basis that it would gag investigation undertaken by a body properly authorised by law.

With the recent allegations emerging from Jersey, another chapter of revelations on Mr Gichuru’s wealth may be opening.

It remains to be seen whether Chief Public Prosecutor Keriako Tobiko will hand Mr Gichuru and Mr Okemo over to British authorities for trial abroad.

http://www.nation.co.ke/News/Inside+Gichurus+Sh20bn+empire+/-/1056/1171160/-/xrj1mfz/-/index.html

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