Kidero fails to block CMA probe over Mumias accounts in court

According to the Judge, CMA had told the court that it was probing all former Mumias directors.

"It is clear that the petitioner did not properly and with the required precision demonstrate how these rights were infringed by the second respondent (CMA) herein. He simply quoted the provisions of the Constitution but did not precisely or sufficiently demonstrate by way of evidence how those rights were infringed by the second respondent," said Justice Ong'udi.

In the case, Kidero had sued former CMA boss Paul Muthaura, the regulator, Director of Public Prosecution, Inspector General of Police and Attorney General. He stated that on October 23, 2015, CMA wrote to him, requiring that he appear for interview concerning his tenure as Mumias managing director.

The former Nairobi governor told court the interview with CMA auditors did not yield any issue of fraud concerning use of Mumias' money.

Fast forward to 2017, CMA wrote to Kidero again, informing him that it was to probe his personal bank accounts from 2006 to 2016.

The investigation was to be conducted by the Directorate of Criminal Investigations.

Kidero argued that section Section 11(3) of the Capital Markets Act is unconstitutional for giving the regulator sweeping powers to investigate any person without giving them prior notice.

He asserted that the investigation was a fishing expedition and an abuse of office as CMA had allegedly singled him out of the other board of directors.

The former governor claimed the probe was only meant to harass and intimidate him. Muthaura and CMA urged the court to dismiss the case.

In his affidavit, Muthaura said while interrogating the company's bank statements for the period from March 2010 to May 2012, they noted suspicious and substantial cash inflows from customers who had received the excessive discounts.

Muthaura added outflows went to Kidero and others to Peter Hongo's (the then Head of Sales) account. This prompted the CMA through the assistance of the DCI to receive a court order to search account numbers 0803464006/3000049902 under the name of Samson Peter Otieno Hongo at Prime Bank Limited.

This investigation revealed that Mr Hongo received cash and cheque deposits from its customers such as YH Wholesalers which had received discounts totaling Sh1.6 billion.