DPP asks EACC to clarify Eurobond report and resubmit file

Director of Public Prosecutions Keriako Tobiko on March 4, 2015 PHOTO | FILE |

What you need to know:

  • The commission had earlier recommended that the file be closed after interviewing more than 30 government officials, concluding that no money was lost or laws broken in the Eurobond transactions.
  • The matter has been the subject of claims by Opposition politicians that some of the money the government made from the issue of a sovereign bond meant to raise money for infrastructure projects was misspent.
  • The EACC questioned officials from the National Treasury and state departments such as Energy, Transport, Water, Agriculture and ICT and also the Office of the Controller of Budget.

Director of Public Prosecutions Keriako Tobiko has asked the anti-graft agency and the Directorate of Criminal Investigations to provide "clarification and additional information" on the Eurobond investigation files before he can decide whether to close the matter.

The Ethics and Anti-Corruption Commission (EACC) is required to resubmit the file within 14 days.

The commission had earlier recommended that the file be closed after interviewing more than 30 government officials, concluding that no money was lost or laws broken in the Eurobond transactions.

“Considering the nature of the allegation that the government officials had kept the proceeds of the Eurobond in offshore accounts and not in the Consolidated Fund and that the proceeds were spent without the authorisation of the Controller of Budget and in view of the above evidence, it is abundantly clear that the net amount realised after payment of the syndicated loan was Sh196 billion,” EACC boss Halakhe Waqo told Mr Tobiko in a letter last week.

OFFSHORE ACCOUNTS

The matter has been the subject of claims by opposition politicians that some of the money the government made from the issue of a sovereign bond meant to raise money for infrastructure projects was misspent.

Opposition leader Raila Odinga, for example, has repeatedly claimed that proceeds from the bond were kept in secret offshore accounts and used without the authority of the Controller of Budget as required by law.

Kenya had sought to raise $2 billion when it opened the bond in 2014 but ended up gaining another $815 million.

The first amount, which the government argued was to finance development projects and fill a budget deficit, was paid into an offshore account at JP Morgan Chase Bank in New York in June 2014.

But how the money was transferred from one bank to another in the United States and how it was spent has become a subject of controversy.

Last week, Mr Odinga named 10 government officials he called “persons of interest” and charged that the Sh87 billion ($999 million) wired to the Federal Reserve Bank of New York from JP Morgan, the lead manager of the transaction, could not be traced.

OFFICIALS QUESTIONED

But Treasury CS Henry Rotich argued the money was wired to the Central Bank in Nairobi, an event that was marked by the rise in forex reserves.

The EACC questioned officials from the National Treasury and state departments such as Energy, Transport, Water, Agriculture and ICT and also the Office of the Controller of Budget.

Mr Rotich has maintained that when the government received the money, the balance of about Sh196.9 billion was spent to support development projects.

More specifically, he said about Sh25 billion was spent in the 2013/2014 financial year while Sh171 billion was used to fund development projects in 2014/2015.

But the Treasury has given no specific infrastructure projects the money was spent on. Instead, the Treasury has announced that it asked individual recipient ministries to provide those statistics.