Former high-flying assistant minister and Garsen MP Danson Mungatana has been released on Sh200,000 cash bail.
His business associate and co-accused Collins Waweru was also freed on bail.
Appearing before Kibra Chief Magistrate Abdulkadir Lorot, the two were charged with conspiracy to defraud a businesswoman of Sh1 million.
They also face 15 counts of fraud, including forgery and uttering false documents, obtaining money by false pretence, and making fake documents.
The duo entered a not guilty plea.
The woman, Ann Wairimu, accused the two of obtaining the money from her under the pretext of helping her land a Sh70 million tender at the Department of Defence (DoD).
Defence lawyers Peter Wena and Lynn Ngugi on Tuesday told the court that the involved parties were willing to settle the matter out of court.
“The case can be terminated at any point and the court should be open to alternative dispute resolution,” Ngugi told the court.
The complainant however indicated that she would only drop the case when the money will be deposited into her account.
But the prosecution was opposed to the idea of an out of court settlement, noting that Ministry of Defence was also a complainant.
“Article 157 gives the DPP the authority to prefer charges. As much as parties wish to resolve, there are counts that relate to a crime against the State. There is the Ministry of Defence as a complainant,” the prosecution argued.
Chief magistrate Lorot set the pre-trial for September 10.
Mungatana and Waweru were arrested last week at Sagret Hotel where they are said to have received the money from Wairimu and handing her fake tender documents.