Fights at counterfeits agency that give criminals a free rein

Anti-counterfeit Agency acting executive director John Akoten when he toured East African Cables manufacturing plant in Industrial Area on March 15, 2016. PHOTO | DIANA NGILA | NATION MEDIA GROUP

What you need to know:

  • Acting executive director John Akoten decried the little funding for the agency but declined to comment on the leadership wrangles.

  • First effort to substantively fill Mr Akoten's position was frozen due to conflict of interest with him being an applicant and doing the shortlisting at the same time.

  • In an advertisement for the position done on September 18, Mr Akoten allegedly prescribed qualifications that specifically fitted him.

  • Second exercise was also marred after it emerged that applicants were required to send e-mail applications to Ministry of Industrialisation while hard copies were to be taken to the agency offices.

Infighting within management, acute under-funding and an incomplete board threaten to tear apart Kenya’s principal agency responsible for fighting the manufacture and sale of counterfeit goods.

Located on the fourth floor of Nairobi’s Teleposta Towers, the Anti-Counterfeit Agency appears to have seen better days.

The corridors are quiet, most doors closed and some offices dark. An old TV entertains the security guard at a reception, with old rattling seats set against a badly stained wall.

The quiet corridors are, however, a sharp contrast to the loud boardroom wrangles and fighting behind the closed doors of the agency.

The board of directors has not met for more than four months, the executive director has been acting for more than three years and the agency has less than 40 inspectors to monitor the whole country and help fight the Sh70 billion counterfeit trade squeezing local manufacturers out of business.

With the board chairman’s position twice challenged in court, the executive director’s post advertised twice between last September and February this year, and applications shelved, the leadership crisis at the agency established in 2010 is truly in a class of its own.

Acting executive director John Akoten decried the little funding for the agency but declined to comment on the leadership wrangles including allegations that the first effort to substantively fill his position was frozen due to conflict of interest with him being an applicant and doing the shortlisting at the same time.

“We are currently looking for donors to help us conduct a survey on the extent of counterfeiting in Kenya. Dealing with criminals is not easy but on the leadership issues, you just have to ask the ministry, I cannot answer that,” Mr Akoten told the Sunday Nation.

In an advertisement for the position done on September 18, Mr Akoten allegedly prescribed qualifications that specifically fitted him and proceeded to constitute a shortlisting team prompting the board to call off the exercise.

The second exercise has also been marred by suspicions after it emerged that applicants were required to send e-mail applications to the Ministry of Industrialisation while hard copies were meant to be taken to the agency offices.

The hard copy applications have since been taken away from the offices to an unknown place, according to a board member who requested anonymity.

The agency under the Ministry of Industrialisation is yet to establish offices in major ports of entry known for letting in counterfeits which may be of good standards hence slipping through the Kenya Bureau of Standards.

Insider sources with the agency informed the Sunday Nation that the appointment of an executive director cannot proceed because the board cannot sit without a chairman while the parent ministry has been reluctant to have the appointment done because of “undisclosed vested interests” from a powerful official in the ministry.

The Nation reached out to Industrialisation Cabinet Secretary Adan Mohamed with the allegations but he did not comment by the time of going to press as he was “out of the country”.

“Out of the country, in meetings all day,” Mr Mohamed replied to a text message.

IGATHE'S APPOINTMENT

The disputed appointee for the board chairman’s position, Vivo Energy Kenya MD Polycarp Igathe, blamed his contested appointments on forces from within the agency who he alleged had been corrupted by counterfeit cartels.

“Counterfeiters ganged up with staff that got suspended for impropriety and filed a suit challenging the legality of my appointment. The High Court suspended my appointment until the suit is heard and, as a law abiding citizen, I await the court to hear the case,” Mr Igathe wrote in reply to our queries.

Mr Igathe, who was first appointed by the President, is fighting his re-appointment to lead the board after Justice George Odunga ruled that his appointment was unconstitutional in December last year.

“In this case, the appointment of the interested party was not in compliance with Articles 10, 129 and 232 of the Constitution as well as section (73) of the State Corporations Act as read with section 6(1) of the Anti-Counterfeit Act, 2008. It follows that the appointment of the interested party cannot be allowed to stand,” Justice Odunga ruled.

Igathe’s appointment was first contested for the fact that President Uhuru Kenyatta himself made the appointment instead of the CS and also because of perceived conflict of interest due to his position at the oil marketing firm.

“He cannot be expected to be impartial, fair and objective in dealing with members of the public suspected of engaging in counterfeiting. The interested party has a direct vested, beneficial and pecuniary interest in matters counterfeiting especially in the energy sector and, therefore, he is susceptible to use his position to victimise, zealously, industry competitors under the guise of fighting counterfeiting,” read a sworn affidavit by Mr Tom Odoyo Oloo, who applied for the nullification of the appointment.

The Energy Regulatory Commission (ERC) in March named four of Shell petrol stations operated by Vivo Energy as having mixed petrol and diesel with kerosene — which is cheaper — to boost their margins at the expense of motorists who risk damaged car engines.

The firm then announced a contract termination of the dealers named in newspapers for adulterating fuel for higher profits.

Six days after the December ruling, the Industrialisation CS gazetted Mr Igathe’s appointment, sparking another court fight. The case is due for submissions next month.

Mr Igathe’s allegations of counterfeit cartels being behind his woes brings to the mix a possible interference by forces bent at seeing the collapse of the watchdog whose work is crucial for the country’s manufacturing industry.

The Board member who spoke to the Nation blamed the ministry for failure to provide leadership to the agency.

“People could be making a lot of money with that outfit and it is riddled with all manner of problems including nepotism and various audit queries, which would ideally require the board to sit, but since the Ministry is insisting on one man to lead it, we have literally hit a dead end and one wonders why the agency was created,” said the member.

Nation also found out that the “suspended staff” he may have alleged include two inspectors and the Deputy Director in charge of Enforcement and Legal services, a Mr Odera.

The two inspectors had withdrawn cases challenging their suspension and were reinstated in office while Mr Odera held to the case still ongoing, casting the allegation sharply on him.

He declined to comment on Mr Igathe’s allegations when reached.