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Kirubi, 13 others acquitted in Uchumi case

NAIROBI, Kenya, May 24 – Businessman Chris Kirubi and 13 other people charged over the alleged irregular sale of an Uchumi supermarket store have been acquitted.

Mr Kirubi and his co-accused were found innocent by Nairobi Chief Magistrate Gilbert Mutembei.

He ruled that there was no evidence to prove the fraud allegations against the accused.

"I find that what came out of the evidence is that Uchumi is not a parastatal.  Therefore they cannot be said to be civil servants.  All the 15 witnesses who testified exonerated the accused persons from any blame."

He said that there was no evidence that Uchumi was defrauded through the sale of the said property.

He ruled that the Mr Kirubi and his co-accused did not breach any laid down procedure "and as such evidence adduced by the prosecution does not prove that the accused conspired to defraud the firm."

"I therefore find that they have no case to answer," Mr Mutembei ruled.

The 13 had been accused of conspiring to defraud Uchumi Supermarkets by selling its Aga Khan Walk branch without independent valuation, but the court said the Board of Uchumi did not breach any laid procedure when it agreed to sale the property.

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In his ruling Mr Mutembei said that prosecution\’s star witness Mary Ngari said she didn\’t know on what basis the government had made the conclusion that the Sh147 million sale price was an under valuation.

The court tore into the prosecution\’s case saying it failed to prove a single allegation against the accused. The court found that the Board meeting that approved the sale was regularly and properly done.

Mr Mutembei said Mrs Ngari had told the court that "they had no reason to conclude that the sale of Uchumi Aga Khan Walk was irregular."

On the question of valuation the court said that it was proved that independent valuation was done and Uchumi got value for money.

According to the witnesses, valuers did professional work and "were not influenced by any party."

According to the court, two independent valuations were done in contrast to the prosecution\’s allegations.

Bernadette Gitari had told the court in her testimony that the value of the asset was Sh147 million.

Another report signed by Lloyd Masika\’s managing director dated July 20, 2004 showed the asset\’s fair market value was Sh147 million, a figure said to coincide with the offer earlier made to the Board by Allgate directors.

The court also trashed the prosecution\’s allegations that valuation and tendering procedures were abused when the property was sold to Allgate Limited, saying no evidence was adduced to support the claim.

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Ms Gitari\’s testimony was in line with that of an earlier witness, Mr Isaac Mogaka, a former Industrial and Commercial Development Corporation company secretary.

Another witness, Mr Charles Migwi, a valuer, also earlier explained that in 2001 the property was valued at Sh145 million but appreciated to Sh147 million in 2004.

In his argument, Mr Kirubi said the company resolved to sell its asset in order to inject funds into the company which was at the time facing severe financial crisis.

He contended that Uchumi had power to acquire and dispose of property, sell and lease back premises it had disposed of.

Mr Kirubi maintained that the decision to sell the store was supported by the management and the government through the Permanent Secretary in the Ministry of Trade who was kept abreast of the happenings.

The government owned the retail chain indirectly through Kenya Wine Agencies Ltd and ICDC investments with a shareholding of 26.6 percent.

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