Businesswoman Pamela Aboo has received a major reprieve after the Supreme Court declined the government’s bid to forfeit more than Sh19.6 million held in her bank accounts.
In a judgment delivered on Friday, a five-judge bench led by Chief Justice Martha Koome dismissed appeals by the Ethics and Anti-Corruption Commission (EACC) and the Assets Recovery Agency (ARA), upholding a Court of Appeal decision in Aboo’s favour, whose three Equity Bank accounts holding a total of Sh19,688,152.35 had been targeted for forfeiture by the State.
Aboo, who is the spouse of a former Kenya Revenue Authority (KRA) employee, had contested the attempted forfeiture of the funds, which investigators alleged were proceeds of crime.
The Supreme Court affirmed that investigators must establish a clear link between suspected criminal activity and any property targeted for forfeiture under the Proceeds of Crime and Anti-Money Laundering Act (POCAMLA).
At the centre of the dispute were three Equity Bank accounts at the Donholm branch containing a combined Sh19,688,152.35.
The ARA moved to recover the funds after receiving information in March 2017 that the money was suspected to be proceeds of crime.
The agency linked the funds to Aboo’s husband, Alex Mukhwana Khisa, then a KRA officer who had been investigated over allegations that he solicited bribes from clearing and forwarding agents.
However, the EACC’s parallel investigations into Khisa were later closed, while preservation orders obtained against him were vacated in January 2018.
In response to inquiries on the source of the funds, Aboo said the money came from her businesses dealing in agricultural produce, transport, perfumes and cereals. She also provided investigators with the identities of her business associates
The Supreme Court found that the agencies failed to sufficiently investigate or challenge her explanation.
“Instead of discounting the respondent’s explanation by investigating these sources, all the 2nd appellant stated in rebuttal was that the respondent had not produced any receipts to back up her claim,” CJ Koome led bench said
The bench held that an element of crime must form the basis of any forfeiture proceedings.
“A reading of the foregoing provisions leaves no doubt that an order for forfeiture under POCAMLA can only be made against property which, in one way or another, is associated with the commission of a crime, or is a proceed of crime. The incidence of crime remains central to such forfeiture proceedings,” the court held.
“It is therefore a requirement that the ARA has to establish a nexus between the subject matter of forfeiture and a crime or its intended commission when seeking an order of forfeiture.”
The judges noted that the agencies’ suspicions were largely based on the existence of substantial amounts of money in Aboo’s accounts and allegations previously made against her husband.
They questioned the evidence linking the funds to criminal activity.
“What is there on record to show that the monies in question were obtained by Aboo as a result of an offence or criminal activity?” the judges asked.
They added: “Where is the evidence on record to support such an allegation by the very institution that closed further investigations into the accusations of bribery against the respondent’s husband? Where is the incidence of crime in the entire chain of events that triggered the forfeiture proceedings?”
The Supreme Court further held that where an agency alleges that property constitutes proceeds of crime generated by a third party, that person should be joined in the proceedings.
“We are of the considered view that the requirement for a nexus between the impugned property and the alleged criminal conduct under the forfeiture scheme in POCAMLA makes it critical that the person alleged to have generated the proceeds of crime, in this case, the respondent’s husband, ought to be joined to the proceedings,” the court stated.
The ruling is expected to shape future civil asset recovery proceedings by clarifying that although forfeiture cases are civil in nature, investigators must still demonstrate a connection between property and criminal activity before assets can be seized by the State.
