Former National Hospital Insurance Fund Chief Executive Simeon Kirgotty has been arrested in the ongoing investigations into the loss of Sh1.5 billion at the insurer.
Mr Kirgotty was arrested in Nairobi on Friday morning alongside the head of ICT Gilbert Gathuo and Mr Robert Mureithi, the head of Web Tribe, which trades as Jambo Pay.
The three suspects were driven to Muthaiga Police Station before being transferred to the Directorate of Criminal Investigations for questioning.
Detectives privy to the matter told the Nation that the three will be required to shed light on financial impropriety linked to a digital payment system.
The case touches on the procurement of a revenue management system, which was advertised but was not delivered despite seven bidders being led on to the end of a dud procurement process by the NHIF management.
The management, led by Mr Kirgotty, wanted to bring on JamboPay to offer payment services to NHIF without going through a competitive process.
So after Web Tribe Limited was eventually picked to instal an internally managed system, which would have cost between Sh400 million and Sh600 million, the contract it signed was for offering a payment solution to NHIF at a fee of between four and 4.5 percent of collections.
Between 2014 and August this year, when NHIF eventually bought its own stand-alone system to which JamboPay would offer only technical support as expected of any vendor, up to Sh1 billion had been lost.
A report submitted to the NHIF Board last week showed an elaborate bait-and-switch scheme through which JamboPay received the money at the expense of more than six million contributors.
The documents indicate that JamboPay has received Sh864 million as commissions for payments made through banks alone.
The Directorate of Public Prosecutions is convinced NHIF opted for the more expensive leasing arrangement to perpetrate and camouflage fraud.
The current CEO Geoffrey Mwangi and his Finance Director Wilbert Kurgat have since been taken to court over the withholding of documents related to the transaction and are out on bond.
They have also been suspended from their positions.