Asset Recovery Agency v Ali Abdi Ibrahim [2020] eKLR

Before a preservation order is made, the court making such order must be satisfied that there are reasonable grounds to do so. Having issued the said orders, it is presumed that the court having perused material placed before it was satisfied that there was prima facie evidence or reasonable ground to believe that the property in question was obtained as a result of proceeds of crime or through money laundering. The court’s powers to decide on whether to grant preservation orders or not are purely discretionary. However as to whether eventually the preserved property is to be forfeited or not is a matter of evidence upon filing a forfeiture suit. The Applicant attempted to explain the sources of the preserved funds by availing some trading documents of companies associated with him but fell short of satisfactory. For instance, he could not explain why he was receiving money from Frontier Engineering, Bluesky General Construction and Green Construction Company. He only gave a general statement that he was trading with these companies. He did not specifically state the nature of the business or trade he was conducting or carrying out and how much he was fetching. It was not enough to state that so and so was trading with so and so without proving that the business transacted was lawful and therefore the money generated therefrom was legitimate. Although he tried to connect the source of money as being proceeds out of construction works in completing Mandera County Government headquarters which is subject to proof, the same amount has been mixed with other unexplained sources of income suspected to be proceeds out of money laundering. Further, the allegation that some money in terms of millions was from informal loan facilities without any evidence backing that allegation was also not enough. It was a mere statement which requires validation by way of cogent evidence. In the absence of any proof that such monies were obtained from legitimate sources of income which is a matter of fact, the same shall be deemed to be money obtained through illegitimate means which could be a crime by way of money laundering or fraud. The Respondent having failed to satisfactory account for the impugned deposits, the court was left with one logical conclusion, that the Applicant established a prima facie case that the preservation orders were based on reasonable grounds. The argument that similar orders were issued and vacated by the magistrate’s court is not a bar to the ARA from instituting forfeiture proceedings which is an independent civil remedy as opposed to investigative proceedings before the Magistrate’s Court. The suit cannot be declared res judicata on that account and therefore no need to appeal or seek review as the purpose for obtaining those orders was achieved by accessing and obtaining the intended bank related documents. On the question as to whether the Applicant was deprived of the means to provide for his reasonable living expenses and suffered any hardship as a result" the court noted that from the Applicant’s Affidavit, he was a businessman who was definitely going on with his normal business. The impugned Orders therefore did not stop him from doing further business. The Applicant’s contention that the money in the account was being used for family survival and doing business, was disregarded as the same was subject of litigation which if proved to be proceeds of crime could be forfeited. Therefore, it will defeat the very purpose of preservation orders if courts were to release such monies for further expenditure unless proved purely on humanitarian grounds that the frozen amounts are the only source of income relied upon by the family to survive hence the need to make provision for reasonable daily upkeep. The Applicant did not endeavour to prove that fact. Does the hardship the Applicant is likely to suffer outweigh the risks that the property could be destroyed, lost, damaged, concealed or transferred? It is obvious that, if the orders are lifted, the Respondent/Applicant will withdraw, transfer or spend the money. Taking into account the amount involved, it is unlikely that such monies can be recovered easily without incurring unnecessary tax-payer’s money to recover the transferred or spent amount. It will be prejudicial to the public interest if the orders were to be lifted and money withdrawn and spent. To order such withdrawals or transfer will be tantamount to perpetuating an illegality which is being addressed by the Applicant. The essence of instituting preservation of assets and forfeiture proceedings is not to benefit the state but to protect public money, and discourage reliance on illegitimate sources of income as a source of wealth. Therefore, the risk of lifting the Order is higher than the hardship likely to be suffered by the Applicant which in any event is short lived as the money is safe pending expiry of the 90 days since gazettement or institution of forfeiture proceeding which must then be proved on a balance of probability. Society has legitimate expectation that courts shall reasonably balance individual rights with public interest which in any event is superior unless proved that the application for preservation is extremely malicious, founded on bad faith and amounts to an abuse of power or court process. Application was dismissed with no order as to costs.