Parastatals heads sweat as files land on DCI desk – Weekly Citizen

Days after a special assignment team appointed to investigate multibillion shilling fraud at the Kenya Ports Authority recommended the charging of top managers including managing director Daniel Manduku over Sh2.7 billion irregular procurement, six other parastatals are in the spotlight with the Directorate of Criminal Investigations focusing on them.

Top on the list of parastatals on the DCI radar is the Kenya Ferry Services whose board was recently dissolved by Uhuru Kenyatta following a tragedy at the Likoni channel.

Uhuru revoked the appointment of the five board members who included former Taita-Taveta senator Dan Mwanzo (chairman) and members Daula Omar, Naima Amir, Rosina Mruttu and Philip Ndolo.

Dan Mwanzo

The board’s sacking left KFS managing director Bakari Gowa hanging by a thread as his three-year term ended in June, with sources saying he is seeking to renew his contract.

Appointed in June 2016, Gowa had previously served as the finance manager at KFS when some of the shoddy contracts were executed.

According to insiders, detectives have unearthed how KFS bought unseaworthy vessels that are way past their sell-by date, risking the lives of thousands of Kenyans.

In the past three years, KFS has spent about Sh400 million on three ‘previously decommissioned’ ferries and also spent Sh200 million to refurbish MV Kilindini and MV Harambee.

According to sources, detectives have narrowed down on those to be held culpable over the acquisition of two new ferries for Likoni and Mtongwe channels where most of the Sh1.8 billion meant to purchase the same ended up in senior officials pockets.

The tender was awarded to Ozata Tersane Cilik San VeTic Ltd STI, a Turkish firm, located in Hersek Koyu, Altinova /777000, Yalova Turkey after money allegedly exchanged hands.

The contract was signed in June 29 2015 by the then KFS managing director Musa Hassan in the presence of Elijah Kitur, company secretary and head of legal services.

The Turkish representative Mayamed Moloo signed on its behalf.

Musa was fired in 2016 over persistent hitches at the Likoni channel, a few days after Uhuru visited the area.

Then chief engineer George Nyadero and operations manager Anthony Mwanzungu were also sacked over incompetence.

Then chief finance manager Gowa from Kwale county’s Tiwi area took over as acting managing director.

According to sources, the project supervision and ferries inspection report poked holes in the manner in which the construction of two ferries was being undertaken, pointing out that the vessels would endanger the lives of the commuters.

Initially, the Inspection Tender No KFS/PSC/01/01/2017 was awarded to a firm associated with Bernard Omondi Nyawe. Informed sources say the requirement was that the lead consultant’s professional qualifications and experience be in naval architect, marine engineering or marine survey inspection.

Borniz was awarded the contract at a cost of Sh88 million.

Weekly Citizen has information that Kenya Pipeline Company is also on the DCI radar over fuel siphoning.

This is after the sleuths found that a company KPC had contracted, Zakhem International Construction of Lebanon, allowed a syndicate in which siphoning of oil was going on around Mlolongo area.

The investigations indicate the junction through which the fuel was being tapped could only have been created before the 20-inch pipe was buried in the soil.

The thieves stole millions of litres since August last year, when the Sh48 billion pipeline was commissioned.

KPA chairman John Ngumi

Sources say those likely to be charged are Kenya Pipeline Company’s engineers who installed the illegal connection.

According to sources, KPA chairman John Ngumi has already recorded a statement with the sleuths and is likely to be a state witness.

The sources add that also on the DCI radar is Kenya Airways where detectives have unearthed a complex scheme in which KQ employees colluded with bankers, suppliers, ticketing agents and oil companies to steal from the airline through forgery and manipulation of the accounts.

Those likely to be charged include former chief executive Mbuvi Ngunze who is said to have forged the signature of Alex Mbugua, then financial director.

Detectives have unraveled how on April 23 2015, Ngunze obtained a bank guarantee of Sh700 million from Dubai Bank which facility was Sh200m above the approved KQ limit.

Others who will be in the dock include Itegi Githinji, then a senior manager at KQ who allegedly received Sh13.5 million bribe from Dubai Bank and Grace Mathenge his wife who allegedly received Sh8.5 million.

Insiders add that detectives investigating tax evasion at Kenya Revenue Authority have now narrowed down to senior managers and commissioners current and former also engaged in money laundering.

A multi-agency team has been investigating officials at KRA. According to sources, senior officials who worked under former KRA Commissioner General John Njiraini and Njiraini are likely to be charged with graft and money laundering.

The tax evasion racket that happened at the port of Mombasa saw rogue KRA staff collude with unscrupulous traders to facilitate false declarations to deny the taxman taxes such as import duty. They also allowed in counterfeits in exchange for kickbacks.

Other agencies such as the Kenya Ports Authority and Kenya Bureau of Standards officials were also in the mix.

The sleuths have also completed investigations on KRA’s implementation of the Excisable Goods Management System whose contract was given to a Swiss firm, Sicpa Securities Solutions.

In the deal hammered during Njiraini’s tenure, Sicpa was to get Sh1.50 which was to be added to the excise tax on bottled water and juice, to be shouldered by the consumers.

This was a Sh17 billion contract.

Another scandal is the shocking British American Tobacco bribery scandal where BAT would bribe KRA officials to disclose tax returns of its competitor Mastermind Tobacco so that they can increase Mastermind’s tax burden.

Njiraini

Sources say Njiraini is among those targeted for arrest in a crackdown on fraudsters behind tax evasion ring.

Also on the DCI radar are board members and managers at the National Social Security Fund.

Among the deals the sleuths have completed investigations on is the sale of NSSF land in November 2011 which earned a tenth of the sale price.

The 69.16 acres in Mavoko municipality were sold after it was subdivided into seven plots of 9.88 acres each to reap from the budding real estate boom that was fast rising then.

While the sale price was set at Sh116 million, NSSF could not explain why it had only received a tenth.

Only Sh12.6 million or 10pc was paid vide miscellaneous receipt M010022315 dated August 23 2011. The balance of Sh113.4 million which was to be paid within 90 days from the date of execution of the agreement has not been settled to date.