Kidero Loses Court Battle Against CMA To Investigate His Bank Accounts 

By The Weekly Vision Team

Former Nairobi Governor Evans Kidero could face investigators from the Capital Markets Authority after the High Court in Nairobi rejected an appeal he had filed to stop investigations on his personal bank accounts. While dismissing Kidero’s appeal, where he prayed for a declaration that the purported investigations were illegal and unconstitutional as they violated his rights under Articles 27, 28, 31, and 47 of the Constitution, Judge H. Ong’udi, in a judgment dated October 31, 2023, ruled, “In my humble conclusion, I find that the petitioner herein failed to prove his case to the required standard. The upshot is that the petition dated July 27th, 2017 lacks merit and is accordingly dismissed with costs”.

Kidero, in an affidavit, claimed that sometime on October 23, 2015, the Capital Markets Authority wrote to him inviting him for an interview concerning its investigation of Mumias Sugar Company (MSC). The management of CMA, through the CEO Paul Muthaura, wrote to him again on November 3, 2015, seeking to interview him as the former Managing Director of MSC.

Paul Muthaura. Photo/Courtesy

He accepted the invitation and presented himself for the interview on November 12, 2015. The interview was conducted by Andrew Maclay, Yusuf Abdoollah, and Nikhil Desai of BDO LLP. He claims that the final report following this interview was forwarded to the CMA. He says that the interview did not raise any issue of fraudulent use of the company’s funds. Again, on January 12, 2017, the CMA invited him for another interview. The difference this time was that the CMA wanted him to provide information about his personal bank accounts in addition to information about his tenure as the managing director.

However, to Kidero’s shock, on July 20, 2017, the KMA made a unilateral decision to investigate all his personal bank accounts for the period between 2006 and 2016. To do so, it sought the assistance of the Directorate of Criminal Investigation and its Fraud Investigation Unit. He further asserts that this act was alleged to be carried out under Section 11(3) of the Capital Markets Act.

In his view, Kidero claimed that Paul Muthaura, KMA, DPP, Inspector General of Police, and the Attorney General’s act of investigating his personal bank accounts were illegal. The act constitutes a malicious fishing expedition, hence the abuse of office. Additionally, he claimed that the investigation was aimed at intimidating and harassing him, contrary to his right to dignity under Article 28 of the Constitution.

However, KMA, in a quick rejoinder through a replying affidavit dated September 5, 2017, through its Chief Executive Officer, Paul Muthaura, noted that Kidero had instituted this suit against him in his personal capacity. He makes known that he is safeguarded against such proceedings under Section 10 of the Capital Markets Act. In view of this and the fact that there is no allegation against him in the petition, he argues that the suit against him ought to be dismissed. The KMA also revealed that pursuant to Section 13A of the Capital Markets Act, it has the power to obtain warrants for search, entry, and obtaining documents held by a bank and to initiate investigations on embezzlement on its own motion or upon receipt of a complaint.

He further revealed that an application was filed in Nairobi Chief Magistrates Court pursuant to Sections 118 and 121(l) of the Criminal Procedure Code and Section 180 Evidence Act Cap 80 for warrants investigating the petitioner’s bank account while investigating the affairs of Mumias Sugar Company Ltd. The judge noted that Kidero stated that his right against discrimination under Article 27 of the Constitution was violated because he was the only one among the former Board of Directors that was investigated. Other than making this allegation, he did not show that he was the only one. The CMA revealed that Kidero and the other directors were all subjected to investigation.