DCI Kinoti probes Sh150b fraud at Kenya Power : The Standard

Powerful cartels working from the heart of the country’s electricity hub, Kenya Power, have stolen Sh150 billions from unsuspecting customers over a period of five years, Director of Criminal Investigations (DCI) George Kinoti believes.  In an elaborate scheme that is now at the centre of a DCI probe, the racketeers perfected a system where they have been overbilling customers, with some domestic users getting monthly bills as high as Sh300,000.   Mr Kinoti said the syndicate, involving some members of staff, brokers, companies and individuals has led to loss of billions of shillings. Kenya Power, which records above average transmission losses of about 20 per cent, buys power worth Sh160 billion per year on average from power producers, losing more than Sh30 billion annually.

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Last year, Kenya Power bought 10.7 billion kilowatt hours (10,700 gigawatt hours) which they sell at Sh22 a unit to retail customers and between Sh10 and Sh15 to commercial customers. Shock amount This would mean that they bought power worth Sh160 billion going by an average rate of Sh15 per unit but managed to collect Sh125 billion in revenues. Yesterday, Kinoti gave a shocking account of how months of investigations exposed the fraud through which Kenyans have been exploited and overbilled. He said Kenya Power’s Pay bill number, as well as same pay points, have been used by the conspirators. “We had officers posing as customers, others as employees of Kenya Power and another group at a mobile subscriber company who spied on the transaction and passed the intelligence to us,” Kinoti said. 

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The investigations, he said, have been going on from 2014. Last Thursday, Kinoti summoned 119 companies and 85 individuals, brokers and some customers who are among the 5,000 customers believed to have benefited from the scam. The DCI uploaded in its social media platforms the list of 204 individuals, companies and their directors his office is investigating in connection with the mega thievery.  Among the affected institutions are a public university, an international agricultural company, a polytechnic, a supermarket, an investment cooperative society, hotels, schools and churches. “Instead of Kenya Power getting its rightful share of Sh100 million, what is remitted is Sh30 million and the balance Sh70 million goes to the fraudsters,” he said. “In this case, the company falls short in offsetting its commitment with the Kenya Electricity Generating Company PLC (KenGen) and other power producers, paying salaries, development expenses and giving the government its 10 percent profit.”

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He said there were cases where all the bills were increased by over Sh500 per consumer. According to the DCI boss, if Kenya Power has 2.3 million customers, the conspirators could make about Sh1.15 billion, meaning in a year, they could rake in Sh13.8 billion from post-paying customers alone. “It has not been an easy probe. Kenyans have been complaining bitterly and these networks are solid. I had to use our power bill as an entry point and follow up to ensure it was the real figure,” Kinoti said. He observed that customers who received these shocking bills had no option but to pay before they could lodge complaints with the firm. He said his officers’ unearthed another conspiracy where well-connected customers, among them multi-billion shilling companies, had their bills transferred to the innocent consumers. Support probe

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“We have zeroed in on the individuals and companies involved and directed the directors of the companies and individuals who are customers to honour the summons without fail,” he said. Yesterday Kenya Power Acting Managing Director Jared Othieno said they had involved the DCI owing to fraudulent activities. “The company fully supports the ongoing investigations by the DCI and we are confident that the culprits will be brought to book. “Last year, Kenya power received information from customers and the public on fraudulent activities targeting unsuspecting customers,” he said.

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George KinotiKenya PowerKenGen