Upon being shown the Attorney-General’s advice and the promissory notes, Treasury Principal Secretary Kamau Thugge on Wednesday said on the face of it, they were indeed irrevocable.
Kenya still owes one of the firms that dealt in the Anglo Leasing contracts more than Sh4 billion through promissory notes, the High Court heard on Wednesday.
The government had promised to pay $40 million to Sound Day Corporation for the supply of security equipment through the notes, which then Attorney-General Amos Wako said could not be revoked.
He, however, said that, “the Treasury’s position was that the promissory notes were cancelled”.
Mr Wako’s opinion was that each promissory note constituted an unconditional promise from the Kenyan government to pay on demand the sum stated in the notes.
A promissory note is a financial instrument that contains a written promise by one party to pay another party a definite sum of money, either on demand or at a specified future date.
President Uhuru Kenyatta was forced in 2014 to authorise the payment of $16.4 million (Sh1.7 billion) to two companies which had secured court orders in Geneva and London requiring the government to settle unpaid debts, even though they had not delivered contracted goods and services.
Defence lawyer Ahmednasir Abdullahi put Dr Thugge to task, questioning why the Treasury ignored the advisory opinion from the Attorney-General who had affirmed that the promissory notes were irrevocable.
Dr Thugge was testifying in court in connection with multi-billion shilling security tenders that the government cancelled, and Treasury in 2014, while relying on a report by PricewaterhouseCoopers, recommended that senior government officials be prosecuted.
The hearing resumes on Thursday.