Maize scandal: John Waluke defends controversial pay

Maize scandal: John Waluke defends controversial pay
  • Mr Waluke and businesswoman Grace Wakhungu are on defence for obtaining millions of money for maize they allegedly did not supply.
  • The two directors and their firm Erad Suppliers and General Contractors Ltd are accused of receiving money from the National Cereals and Produce Board after falsifying documents.

Sirisia MP John Waluke has defended the Sh200 million paid to his company by the National Cereals and Produce Board ten years ago, saying payout was lawful.

While defending himself against claims that his company, Erad Supplies and General Contractors Ltd, received the payment fraudulently from the government agency, Mr Waluke said the payment was pursuant to a court directive.

He said this was after an arbitrator ruled in favour of the company and they moved to court to enforce the award.

Mr Waluke said from the payout, he got Sh50 million, while his co-directors Jacob Juma and Grace Wakhungu, got Sh113 million and Sh40 million respectively.

The legislator said Mr Juma, who has since died, took advantage of their absence in the day-to-day running of the company, to pocket the largest share of the amount. Pressed further by his advocate, Mr Waluke said Juma could have been killed because of the case because “he rubbed shoulders with the big boys”.

The MP said the company sued NCPB over breach of contract after it failed to give them letters of credit, after securing maize from Ethiopia. He said their company won a contract to supply 400,000 metric tons of maize but the state terminated the deal due to lack of funds.

Then, in 2004/2005 drought hit the country and there was a shortage of over 6 million bags of maize. The Ministry of Agriculture then in a letter dated July 19, 2004 instructed NCPB to purchase 2 million bags of maize for famine relief and strategic grain reserve.

The prosecution accused the two of uttering false document and fraudulent acquisition of public funds. The charges against them state that being directors of Erad Suppliers & General Contractors Ltd, they presented a false invoice of USD1,146,000 (Sh115,072,725) on February 24, 2009 as evidence in the arbitration dispute between the company and NCPB.

They allegedly purported that the invoice was to support the cost of storage of 40,000 metric tonnes of white maize, which was allegedly incurred by Chelsea Freight. They allegedly obtained Sh297,386,505 on March 19, 2013 for loss of profit and interest allegedly incurred by Chelsea Freight.

In June 2013, they further obtained Sh13,364,671 purporting to be the storage for the maize. On the last count, they are accused of obtaining USD24,032 (Sh2,413,113).

But Mr Waluke said the company was not paid Sh13,364,671 as alleged or the USD 24,032 but it was paid to an advocate, who should instead have been pursued by the prosecution.

It was their argument that the dispute arising was determined by an arbiter, the High court and the Court of Appeal and the amount of money they are accused of fraudulently receiving was an arbitral award.

Chief Magistrate Elizabeth Juma placed the two on their defence after ruling that the prosecution had tabled evidence to warrant them to defend themselves.

The hearing continues Thursday.