High Court stops Nairobi Governor Evans Kidero from seeking Sh4bn county loan

High Court Judge Mumbi Ngugi has issued temporary orders stopping the Nairobi County government from seeking a Sh4 billion loan.

Nine members of the county assembly moved to court seeking to stop Governor Evans Kidero from acquiring the loan.

MCAs Isaac Ngigi, Hashim Kamau, Osam Adow, Ruth Njeri Macharia, Janet Kimondo, Karen Wanjiku, Chege Mwaura, Patrick Chege and Abdi Hassan claim that if Dr Kidero is allowed to go ahead and get loans from banks, it would be a mockery of good governance, accountability and the principles of devolution.

Through lawyer Kibe Mungai, they alleged that their county executive committee member for Finance did not submit to the county assembly the details of the loan facilities.

The say they need to see specific information on the banks offering the loans, the loan terms and the interest rates being charged in order for them to confirm whether they are the best in the market.

ROTICH, AG SUED

Besides Governor Kidero and the Finance and Economic Planning executive member, they have also sued the Speaker of the county assembly, Treasury Cabinet Secretary Henry Rotich and the Attorney-General.

They pleaded with Justice Ngugi to grant them temporary orders to stop the acquisition of the loan, saying public funds may be stolen through what they term as a creative procurement scheme.

Justice Ngugi agreed and issued an order stopping the governor from obtaining the said loan following claims that the money was to be procured in an unprocedural manner.

They accused Dr Kidero of failing to comply with the Public Finance Management Act of 2012 while seeking to borrow money from banks.

NOT TRANSPARENT

The governor is also accused of not being transparent and accountable in his bid to secure the loans as he had not justified the need to procure them.

“Accordingly, there is a high risk that public funds may be stolen through creative loan procurement schemes of the kind that currently threaten Mumias Sugar Company with collapse and insolvency,” said Mr Mungai.

The dispute, they claim, started when the county government, through its executive committee member for Finance and Economic Planning, requested the approval of the assembly for loan facilities allegedly to cater for a budgetary deficit without giving evidence.

The law allows the county government to submit to the Finance executive in writing the terms and conditions for a loan, something the government did not do.

In this regard, the MCAs claim that neither they nor city residents know the cost of the Sh4 million loan or even the bank that is going to provide that money.

NO LOAN GUARANTEE

The assembly Speaker had allowed the notice of motion seeking approval for the loan facilities to be considered although the Treasury Cabinet Secretary had not given a loan guarantee as required.

The assembly resolved on October 22, 2014 to postpone the debate to October 28 in order to allow the Budget Committee to consider the request and table a report before the approval was given on the issue on October 23, but the Speaker illegally allowed the matter to be debated.

Mr Mungai urged the judge to protect Nairobians from what he said was an obvious scheme aimed at stealing public funds through dubious loan facilities.

The MCAs want the notice of notion passed by Majority Leader Elias Otieno on October 22, 2014 quashed and declared illegal.

They further want Dr Kidero to be permanently stopped from signing any loan agreement with any bank or financial institution.

They also want the letter written by the Finance and Economic Planning executive member to be declared illegal.