Investigations into a top Civil Servant suspected of being involved in corrupt dealings have brought to the surface a real estate shopping frenzy that resulted in the swift and speedy acquisition of houses worth 279 million in a short period of time. Magaret Muthui is said to have done the transactions using cash money, despite the fact that those exchanging large amounts were required to explain how they acquired the cash. The move was designed to stop the flow of proceeds of crime such as corruption and counterfeiting of banknotes through the financial sector.
Muthui a deputy director at the Kenya Rural Roads Authority (KeRRA), bought the bulk of 35 apartments in the four months to September 2019 when Kenya withdrew the old Sh1,000 banknote to tackle illicit financial flows.
The Assets Recovery Agency (ARA) has raised the red flag that the apartments worth Sh374.5 million and Sh94 million in bank accounts linked to Margaret Wanja Muthui were the products of illicit deals, including kickbacks from road contractors.
The ARA successfully applied to court for freeze of the assets with the aim of forfeiting them to the State, arguing that her salary cannot support the purchase of the multimillion-shilling properties within weeks.
In a petition certified as urgent, the State agency says Ms Muthui bought 11 apartments in Kileleshwa for Sh264 million in cash between July and September 24, 2019.
She acquired another 12 units in a Ruaka flat in June 2019 for Sh15 million, days after the Central Bank of Kenya (CBK) set September 30, 2019 deadline for converting the old Sh1,000 note into new ones after it became the banknote of choice for criminals in the country.
Ms Muthui is said to have bought 23 apartments worth Sh279 million during the four months when the old bank notes were being retired and she paid cash for the properties, court filings show.
The cash deals were meant to conceal the money from the CBK, which said notes worth Sh7.4 billion were not exchanged, rendering the cash invalid and hitting the suspected corrupt owners hard.
The agency says Ms Muthui allegedly purchased the apartments herself or through proxies and a company whose directors were mostly her relatives or proxies. Documents filed in court showed that she had earlier in March 2019 acquired a flat with 12 units in Ruaka for Sh15 million.
Ms Muthui later acquired a house in Nairobi and land in Riruta, Dagoretti and registered them in the names of other persons to conceal the source of the funds.