Gideon Moi quizzed by detectives over KPA tender scam

The chickens have come home to roost for some of the biggest families in the country after what started off as an investigation into leased extra storage space for containers by Kenya Ports Authority exposed an intricate web of powerful business and political dynasties.

SHED LIGHT

Two companies — Mitchell Cotts and Nairobi Inland Container Terminal (NICT) — at the centre of investigations on the Inland Container Depot (ICD) scandal, have tight links with the Moi, Ndegwa, Saitoti, Kulei and Nyachae family empires.

Already, Baringo Senator Gideon Moi, NCBA banker James Philip Maina Ndegwa, a number of KRA officials and directors of the companies have been to the Directorate of Criminal Investigations (DCI) to shed light on the matter. 

The Nation tried to contact Mr Moi on Wednesday, but his aide asked for the questions we wanted to ask the senator. After sending the queries, a senior Kanu official called back and said: “Moi was nowhere near Thika Road. He was not summoned and was not questioned. I was with him from 9am in the morning and I can tell you for a fact he was not there. And anyway he is not linked to Mitchell Cotts after all.”

Since last week, detectives have been questioning officials from Kenya Ports Authority and the Kenya Revenue Authority in order to understand how the tender, that is linked to perennial delays of cargo clearance at the Inland Container Depot (ICD) in Nairobi, was awarded.

PET PROJECT

Mitchell Cotts and Nairobi Inland Container Terminal were last year controversially awarded a tender to provide leasing facilities to KPA due to congestion at the ICD in Nairobi.

The congestion was created after the government realised that the Standard Gauge Railway (SGR) freight service was not doing well and made a decision that forced all inland cargo to be cleared in Nairobi.

As a result, container traffic on the SGR shot up by four times, with the ICD receiving up to seven trains of cargo every day from just one when the freight service was launched in December 2017.

But there was one problem — the ICD could only handle 15,000 TEUs, and this led to clearance delays.

To calm the nerves of the big transporters who lost business after the SGR launched its operations, the Ministry of Transport and its agencies have been handing contracts to firms related to big transport companies, as an alternative to lost revenues in a bid to reduce resistance to the Jubilee government’s pet project. Last year, truckers were up in arms and held protests in Mombasa to oppose the directive that forced importers to only use the SGR for cargo destined for Nairobi and beyond.

CARGO DELAYS

The Directorate of Criminal Investigations (DCI) now thinks the congestion could have been artificially created in order to force KPA to seek alternative storage facilities for importers, whose containers have not been cleared within 30 days.

As a result, importers whose cargo delays have to pay both KPA and the two private storage firms.

Among those who have been questioned so far are KPA managing director Daniel Manduku, KRA commissioner for customs Kevin Safari, KRA chief manager legal John Gathatwa and licence manager Peter Nganga.

On Monday, businessman and banker James Philip Maina Ndegwa, who is linked to Mitchell Cotts, was questioned. 

On Wednesday, it was the turn of Baringo Senator Gideon Moi and Mr Philip Obandah Arungah, a majority shareholder at Urgent Cargo Handling Limited and the owner of NICT Nairobi Limited, that owns 50 per cent stake in Nairobi Inland Cargo Terminal Limited.

STORAGE SPACE

Mr Moi arrived at the DCI headquarters and headed straight to the Economic Crimes Department. He left after about half an hour, leaving his lawyers behind. Mr Arungah, who owns half of the shares of NICT, was, however, questioned the whole day.

Mitchell Cotts and NICT have since last year been offering extra storage space for cargo, whose clearance has delayed through a controversial arrangement that has resulted in complaints by traders.

Protocol dictates that cargo imported from overseas has to undergo a Pre-Export Verification of Conformity to Standards (PVOC) evaluation in their source countries before it can be cleared and released by relevant port authorities.

This is supposed to make it faster to clear cargo once it lands in Kenya but, for some reason, this has failed to happen. 

A decree issued by President Kenyatta last May, when he made an impromptu visit to the ICD, has never been followed and the cargo issues are yet to be resolved.

SIX FIRMS

As a result, KPA last year hired peripheral storage facilities from Mitchell Cotts and NICT in what is turning out to be a scandal that could sink top officials at KRA and KPA.

However, one of the key puzzles that the DCI has to solve, even as he tries to put to book the culprits behind the scandal, is finding out the real owners of Mitchell Cotts and NICT.

When the Nation broke the scandal last Friday, Mitchell Cotts officials and Mr Gideon Moi’s aides were up in arms claiming the Baringo Senator has no links with the company.

A parallel Nation investigation to unmask who the real owners of the company are has led to a maze of more than a dozen corporate entities that own one another.

This complex web will make it harder to know the real individuals behind the companies who have directly and indirectly benefited from the scandal.

At the heart of the web is billionaire businessman and banker James Philip Maina Ndegwa, who is connected to at least six of the firms that own one another. 

TEDIOUS TASK

Mr Ndegwa, the chairman of NIC Bank that recently merged with the Commercial Bank of Africa to come up with NCBA Bank, comes up as the key to the Mitchell Cotts enterprise.

The Oxford-educated bank executive is also the chairman of First Chartered Securities Limited, and a director at five other companies in the maze. The powerful Ndegwa family does business with both the Moi and Kenyatta families.

At the very top of the food chain are companies linked to current and former powerful politicians, including Mr Nyachae, Mr Moi and the widow of former Interior Minister George Saitoti. 

There are at least 12 firms at the companies registry that have the Mitchell Cotts name, which makes searching for the owners a tedious task.

But our investigations narrowed down to Mitchell Cotts Limited, which is seen as the mother company sitting at the apex. 

MYSTERIOUS

The directors of Mitchell Cotts are Mr Joshua Chelelgo Kulei, Gideon Towett Moi, Andrew Steward Mangi Ndegwa, Josphat Muchiri Gateri and Christopher Walter Obura.

This firm, Mitchell Cotts Limited, is however owned by four other companies and one individual shareholder, most of whom are related in one way or the other.

These are High Trees Limited, whose shareholding remains mysterious to date. Multiple searches at the company registry conducted by the Nation team and other secondary partners for collaboration purposes returned no result. High Trees owns 267,272 shares in Mitchell Cotts Limited. Whoever owns these shares, no one knows.

The second company shareholder in Mitchell Cotts Limited is First Chartered Securities Limited, whose chairman is Mr Ndegwa. First Chartered owns 133,636 ordinary shares in Mitchell, the mother company.

But the biggest shareholder in the company is Mitchell Cotts Investments Limited, which has 534,544 shares in its name.

DIG DEEPER

The fourth corporate entity that owns a stake in the company is Makimwa Consultants Limited, which owns 133,636 ordinary shares in the company.

The only individual shareholder in the firm is a Dr Christopher Walter Obura, who owns one share.

We dug deeper to establish who are the owners of these four companies and it led us back to the top. First Chartered Securities Limited is owned partly by James Philip Maina Ndegwa and Assets Managers Limited, which is owned in part by Simeon Nyachae and his family through Sansora Investments Limited.

Mitchell Cotts Investments Limited also owns Mitchell Cotts Kenya Limited, and the web continues. James Philip Maina Ndegwa is also a director at Mitchell Cotts Kenya Limited alongside Andrew Ndegwa, Duncan Nderitu Ndegwa, Anthony Peter Wainaina Kamau, Patrick Kithinji Mugambi and Daniel Kipsang Tanui. 

INVESTMENTS

Daniel Kipsang Tanui is a director at Mitchell Cotts Freight Kenya Ltd. He is the managing director of Mitchell Cotts Freights Limited. 

He previously worked with Siginon Freight Limited, associated with the Moi family, as divisional manager before joining Mitchell Cotts Freight.

Many billionaires and shadow businesses who do not want their businesses known hide their investments in layers of companies with one owning the other to make it harder to lift the corporate veil.

Ideally, the registrar of companies cannot allow the registration of more than one company that share a name to avoid confusion. 

Directors of companies that were registered in the manual era, which allowed duplicity of names, are also given a chance to change their names to a different one and leave the name for the first entity to be registered to avoid sharing of names.

However, this provision does not seem to apply for Mitchell Cotts.​