Firm of anti-graft boss was paid Sh35m by NYS

Sunday July 17 2016

Ethics and Anti-Corruption Commission Chairman Philip Kinisu receives a gift from Public Service Commission Chairperson Margaret Kobia at Laico Hotel in Nairobi on April 6, 2016, during the Kenya Institute of Management Fellows' Luncheon. The EACC has said that it is yet to complete investigations into a set of other contracts at NYS. PHOTO | EVANS HABIL | NATION MEDIA GROUP

Ethics and Anti-Corruption Commission Chairman Philip Kinisu receives a gift from Public Service Commission Chairperson Margaret Kobia at Laico Hotel in Nairobi on April 6, 2016, during the Kenya Institute of Management Fellows' Luncheon. The EACC has said that it is yet to complete investigations into a set of other contracts at NYS. PHOTO | EVANS HABIL | NATION MEDIA GROUP 

By KIPCHUMBA SOME
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The chairman of the Ethics and Anti-Corruption Commission owns a company which was awarded tenders worth millions of shillings by the controversy-riddled National Youth Service.

Esaki Limited was paid a total of Sh35,417,209 for the supply of various items to NYS between October 2014 and November 2015.

On October 10, 2014, the company was paid Sh18,973,000 for borehole materials. Three days later, it received Sh11,487,400 for the supply of borehole machines.

On April 8, 2015, it was paid Sh1.9 million for providing steel drums. It was paid Sh2,928,181 on May 24, 2016 for items which we could not establish by the time of going to press.

The payments were made to the company’s account at Investments and Mortgages Bank Limited, Riverside Drive Branch. 

The payment in April 2015 was made when NYS was in the throes of the Sh791 million scandal which ultimately claimed the jobs of top officials at the ministry.

The loss of hundreds of millions of shillings in suspect tenders at the NYS is one of the major scandals that the EACC is investigating and, although Esaki Ltd has not been adversely mentioned so far, the fact that it is owned by the family of the EACC chairman brings up the question of possible conflict of interest.

Contacted, Mr Philip Kinisu said such a possibility does not arise. “I declared my interest in that company during my vetting for the job. All this information is there in my annual returns. This company has been run above board by my wife since it was formed. Where is the scandal in all this?”

Among those who lost their jobs as a result of the scandal at NYS are former Cabinet Secretary for Devolution Anne Waiguru and Planning Permanent Secretary Joseph Mangiti.

The Director of Public Prosecutions Keriako Tobiko brought charges against several senior staff at NYS, among them its former director Nelson Githinji.

Others who were charged are businessman Ben Gethi and Josephine Kabura Irungu who, in February, swore a sensational affidavit implicating Ms Waiguru in the scandal.

The EACC has said that it is yet to complete investigations into a set of other contracts at NYS worth more than Sh761 million that are suspected to have been awarded irregularly.

Some of the contracts include the Sh58.3 million tender for supply of cutter-grinder accessories, tender contract worth Sh97.7 million for supply of shaping machines and cylindrical grinders, and a contract for power sheet machines worth Sh79.8 million and Sh37.5 million worth of oven equipment.

BLACKMAIL, EXTORTION
Civil society groups have accused the EACC of dragging its feet on the NYS investigation. Last month, Bunge La Mwananchi wrote to EACC’s CEO Halakhe Waqo demanding investigations into the dealings of Esaki.

“Further, we wish to categorically state the fact that this specific case is quite interesting since the respondent … is allegedly related to the Chairperson of EACC and it will be interesting how this particular case is dealt with,” reads the letter dated June 23.

Mr Kinisu dismissed this plea saying some “crooks” who he did not name were out to embarrass him and to slow down the fight against graft.

“Is it wrong for any Kenyan to do business with government? My wife has worked hard for these contracts and it is bad to demonise her for it,” he said.

Registry records indicate that Esaki Limited’s directors are Mr Kinisu, his wife Mary Wanjiru Kinisu and their daughter Caroline Nato Kinisu.

Other companies they own are Esaki Health Care Services Ltd and Kose Investment Limited.

Though he is listed as a director, he said he is not active in the day-to-day running of the affairs of the company, a function he has left to his wife.

Apart from NYS, Esaki Ltd won lucrative contracts from the ministry of Health which paid the company a total of Sh246 million between March 2015 and June 2016.

The single biggest contract was worth Sh150 million which it was paid on September 21, 2015 for the supply of 26,000 bottles of insecticides at a unit price of Sh5,790 per bottle.

On June 16, 2016, it was paid Sh89. 9 million for the supply of Primphos 300 capsules. On March 2, 2015, it was paid another Sh5,890,000 for the supply of thermal guns and stethoscope ebola disinfectant. 

There is no evidence that any of the contracts were awarded irregularly. Bunge la Mwananchi has demanded that the company be blacklisted from doing business with the government.

Mr Kinisu accused some officials of the organisation of attempting to blackmail and extort from him.

The new allegations come barely eight months after Mr Kinisu was appointed by President Kenyatta to head the troubled anti-graft body.

Mr Kinisu replaced Mr Mumo Matemu who resigned in May last year following infighting between him and his deputies Irene Keino and Jane Onsongo.

FURTHER GRAFT CLAIM
The three were forced out over allegations of favouritism and impropriety in how they were conducting investigations into corruption in government.

Mr Kinisu was appointed together with Dabar Maalim, Paul Gachoka, Sophia Lepuchirit and Rose Macharia as members of EACC board.

Meanwhile, a government agency wants an international non-governmental organisation in which Mr Kinisu is the chairman of the board to be investigated for money laundering.

The Non-Governmental Organisations Coordination Board wants the African Population and Health Research Centre investigated for the potential loss of donor funding and other malpractices at the board.

APHRC, which is headquartered in Nairobi, conducts research on population, health, education, urbanisation and related development issues across Africa.

On April 4, NCB’s Executive Director Fazul Mahamed wrote to the director-general of the National Intelligence Service, Maj-Gen Philip Kameru, asking the NIS to probe operations at the APHRC.

“Preliminary investigations into the operations of the NGO have revealed possible acts of money laundering, diversion of donor aid and regulatory mischief. The NGO has over the last three years received in excess of Sh5 billion,” he said in the letter.

The organisation counts some of the richest charitable foundations in the world among its funders and partners. They include the Bill & Melinda Gates Foundation, Google, The Rockefeller Foundation, Wellcome Trust, UK aid, The World Bank, among others.

The other Kenyan in the 11-member board is former permanent secretary James Ole Kiyiapi who unsuccessfully vied for the presidency in the 2013 General Election.

In December last year, Mr Mahamed wrote to APHRC saying it had not complied with the regulations governing the operations of NGOs in the country.

However, NCB gave APHRC two years to comply with regulations and transition from the Companies Act to the NGO Act.

Mr Kinisu said he had not been informed of the fresh allegations of money laundering.