Illegal payments probe hits motor sports federation

What you need to know:

  • The Directorate of Criminal Investigations is carrying out the probe, which has caused divisions in the board of directors and senior management.
  • A forensic audit commissioned by the federation revealed that pay-outs were made to the directors in cash.
  • Where the amounts exceeded Sh1 million, the money was wired directly from the federation’s accounts to personal bank accounts of the directors.
  • The directors took the payments claiming they would pay expenses incurred by other institution-facilitated activities, in particular rallies and accommodation.
  • Investigators want to know why the expenditure incurred by the federation was not paid to suppliers directly, since the federation has an administration office and secretariat.

The Kenya Motor Sports Federation is under investigation over claims that some of its directors were illegally paid millions of shillings, money that was meant for developing the sport.

The Directorate of Criminal Investigations is carrying out the probe, which has caused divisions in the board of directors and senior management.

A forensic audit commissioned by the federation revealed that pay-outs were made to the directors in cash.

Where the amounts exceeded Sh1 million, the money was wired directly from the federation’s accounts to personal bank accounts of the directors.

The directors took the payments claiming they would pay expenses incurred by other institution-facilitated activities, in particular rallies and accommodation.

Investigators want to know why the expenditure incurred by the federation was not paid to suppliers directly, since the federation has an administration office and secretariat.

Auditors demanded proof that the money did not end up in the pockets of directors but the queries were met with unfruitful promises to provide receipts at a later date.

In one conspicuous case, a director said cash was handed over to police officers called in to provide security for events and when asked for proof, he replied: “Receipts for payment to police cannot be obtained.”

DPP INTERVENTION

But the investigation has been dragging since it was reported to the directorate on July 9 last year, prompting the Director of Public Prosecutions, Mr Keriako Tobiko, to step in. Deputy prosecutor Dorcas Oduor communicated the concerns to top detective Ndegwa Muhoro on December 15, last year.

Three witnesses were interviewed by police detectives and those adversely mentioned were also interrogated, but the matter seems to have ended at that point.

In the course of squabbles, federation general manager Mwaura Njuguna was sent home to pave the way for the audit.

He challenged the matter in court and federation opted for an out-of-court settlement after its lawyers, Obura Mbeche and Company advocates, raised serious issues in preparing for defence.

Mr Watson Burugu on behalf of the law firm in a letter dated September 28, last year, asked: “Is it true that the forensic audit is meant to cover up financial misdealing by the directors?”

The federation is mandated by world motor sports organisation, FIA, to oversee fair planning, running and participation of motor sport events in Kenya.

RACISM ALLEGATIONS

The federation is also facing allegations of racism, which has been taken up by the National Cohesion and Integration Commission.

The commission’s secretary, Mr Hassan Mohamed, wrote to the Sports ministry asking the cabinet secretary to take an interest last June.

“The commission has received a complaint that the federation is dominated by members of the Sikh community who have voted to have a secretariat at Sikh Union Club (temple) and hence locking out other communities in Kenya,” he said.

The commission said this was in violation of the Constitution and the Sports Act, which requires sport organisations to be open to the public in their leadership and membership.

“Owing to the fact that the federation gets funding from the State, it should endeavour to reflect the diversity of the people of Kenya at all levels of management,” Mr Mohamed wrote.

The federation has 12 directors, each drawn from motor sport clubs in the country. They clubs are: Kenya Motor Sports, Rift Valley Motor Sports, Equator Motor Sports, Mombasa Motor Sports, Vintage Classic Car, Alfa Romeo Owners Club, Nanyuki Rally Group, Western Kenya Motor Sports, East Africa Safari Rally, Rally Sports, East African Motor Sports and Sikh Lion.

Besides 2015, financial queries on 2014 have not been solved.