According to the investigators, a friend to the suspect in custody, was spotted driving Osinde's car from his Nakuru farm.
"We have confirmed that he (the suspect) was driving the vehicle at the time Osinde was being sought by the family and the police," said the source.
The source said police were by last evening formally recording the confession by the employee.
On Wednesday, police arrested two suspects, including Osinde's employee Julius Mogoi, who is being treated as a prime suspect in the murder.
The officers hinted they were trying to establish other suspects following crucial leads.
The two suspects, police said, will be held for 21 days. "The deceased was picked from his Ngata home on June 18, we suspect was killed the same day," said an officer.
Police suspect Osinde was intoxicated and hit with a blunt object. The body, according to detectives, was thrown into River Gucha in Kisii County and found floating in River Kuja, Migori County, a distance of 15km.
His car was recovered in Sigawa area in Narok. Police said they received information from the public about an abandoned vehicle on June 22. The vehicle had been vandalised.
Police said a local saw the body floating on June 22 and informed them. They then went to the scene, recovered, and moved it to the morgue.
Crime scene officers visited Nakuru home on Wednesday and spent hours interrogating workers. Several mobile phones from staff were also seized.
Police said the phones would be subjected to forensic analysis to establish if they collaborated with the kidnappers.
Efforts by detectives and journalists to enter the home yesterday proved futile as they were barred by family. The gate remained closed, and a voice of an unidentified man informed the officers the media was not required there.
Even after the media retreated, officers investigating the matter asked to go back.
Rongai Police Commander Wilberforce Sicharani and sub-County DCI officer Donatta Atieno led the team to the home.
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From a distance, Atieno could be seen knocking on the metallic gate and addressing an individual who could not be seen, and requesting they be allowed in, efforts which proved futile. "You would have allowed us into the homestead as this will assist us even when testifying in court," said Atieno, while addressing someone on the phone.