The High Court, in a recent development, has taken decisive action by freezing more than Sh63 million belonging to Virtual Financials International Ltd, a payment solution firm.
This unprecedented move comes in response to claims that the funds held in two separate accounts are linked to the proceeds of criminal activities, as reported by Justice Nixon Sifuna.
Sifuna granted consent to the application by the Assets Recovery Agency (ARA) to retain the funds in custody, awaiting the agency's formal request for their confiscation by the government.
In a significant legal manoeuvre, the agency presented compelling evidence to the court, asserting that the funds under scrutiny were derived from illegitimate activities and therefore should be preserved to prevent any unauthorized withdrawal or transfer before the case reaches its conclusion.
"That a preservation order be and is hereby granted prohibiting the respondent as well as its agents and or representatives from transacting, withdrawing, transferring, using or dealing in any way with the funds in the following bank accounts," Sifuna stated in his ruling
The funds in question are currently held in two separate accounts at Equity Bank, with one account containing $16,661 and the other holding an astonishing Sh60.7 million.
To ensure the integrity of the investigation, the court has ordered that these funds remain preserved for a period of 90 days.
Additionally, the court has directed that the matter will be revisited on January 3, allowing ample time for a comprehensive inquiry into the source and purpose of these funds.
ARA disclosed to the court that their investigation began following the information they received, suggesting that the two bank accounts were harbouring funds suspected to be the proceeds of criminal activities.
In a revealing statement, the investigating officer, Isaac Nakitare, stated, "That my investigations established that the major deposits were made from suspicious sources and subsequently spent in various suspicious activities by agents of the firm."
Moreover, the officer expressed concerns to the court, highlighting the absence of any previous orders preserving the funds, which heightened the agency's apprehension that the firm's directors or its agents might attempt to transfer or withdraw the money.
ARA further reinforced its case by submitting that its investigations lifted the lid on intricate fraud and money laundering schemes.
"That the financial investigations conducted by the Agency revealed complex fraud and money laundering schemes conducted by the respondent, its directors and associates rendering the above funds proceeds of crime liable for preservation and forfeiture," ARA said.
This decisive legal action the High Court took underscores the commitment to combat financial crimes and money laundering, sending a clear message that ill-gotten gains will not be allowed to go unchecked.
As the case continues to unfold, it remains to be seen whether Virtual Financials International Ltd can provide a legitimate explanation for the substantial funds held in its accounts or if they will ultimately be forfeited to the government as proceeds of crime.