How Garissa governor kin’s firm got Sh48m for tender

A company owned by the brother of Garissa Governor Ali Bunow Korane was paid more than Sh48 million for a tender last year, raising issues of conflict of interest, according to documents seen by the Sunday Nation.

ABUSE OF OFFICE

Mr Mohamed Bunow Korane, a younger brother of Governor Korane, was — until this week — a shareholder of Akad Construction Company Limited, a firm that was awarded a contract in August last year to put up a state lodge for the Governor in Bura, Fafi constituency.

Information held by the Registrar of Companies indicates that until Friday, the younger Mr Korane had 250 shares in Akad Construction, similar to another shareholder, Mr Mohamed Elias. Sifa Imports Ltd, a company associated with a first-time MP in the county, owns 500 of the company’s total 1,000 shares. Akad Construction, whose address is in an estate in Nairobi’s upscale Kilimani area, was registered on May 20, 2013.

The award of tenders to a company in which the Governor’s brother is a shareholder points to conflict of interest, according to public procurement rules.

Last week, the Director of Public Prosecutions (DPP) Mr Noordin Haji approved charges against Kiambu Governor Mr Ferdinand Waititu for conflict of interest, dealing with suspect property and abuse of office.

This is after it was established that the Governor, his wife Mrs Susan Wangari Ndung’u, and their daughter Ms Monica Njeri could have received millions of shillings in kickbacks from contractors doing business with the county government.

On Thursday, Mr Mohamed Bunow and Mr Elias inexplicably resigned as directors of Akad Construction, according to documents that were filed on Friday at the registrar of companies.

“I Mohamed Bunow Korane do hereby make Oath and State as follows: That I have transferred all my 250 shares as a director/shareholder to Ali Dubow Abdi,” he said in an affidavit he swore on Friday.

TAX RETURNS

“I Mohammed Elias do hereby tender my resignation as a director/shareholder of Akad Construction Limited (CPR/2013/102071),” said Mr Elias in his letter to the company’s board of directors on Thursday.

When asked on Saturday if awarding the contract to a company owned by his brother is not tantamount to conflict of interest on his part, Governor Korane replied in an SMS: “Why don’t you check with the registrar of companies.”

And when this writer informed him that his brother and Mr Elias had resigned on Friday as one of the directors of the firm, he replied: “Yesterday? That sounds funny. Get your facts and do your job.”

Mr Mohamed Bunow did not reply to our requests for comment.

Akad Construction was paid Sh48,897,572 in three tranches between October last year and March this year. It was first paid Sh3,356,595 on October 12, 2018 from Garissa County’s recurrent account, followed by Sh30,482,833 on October 26, 2018, and finally Sh15,058,144 on March 3, 2019, both from the county’s development account.

Curiously, the company filed nil tax returns for between January 1, 2018 to December 31, 2018, suggesting that it had not done any business in that period even though it had been paid more than Sh33 million by Garissa County in October alone.

SH101 MILLION

Our investigation indicated that Akad Construction is among 14 firms that have done business with the Garissa County government over the years which the Kenya Revenue Authority (KRA) and the Ethics and Anti-Corruption Commission (EACC) are investigating for various tax offences.

Cumulatively, the 14 companies are believed to have received more than Sh744 million from the Garissa County government since 2017, but their tax records have attracted the attention of investigators.

At the same time, KRA is demanding more than Sh1.2 billion from the Garissa County government in unpaid taxes. “Records held in this office show that your county has not been remitting Withholding VAT (WHVAT), Withholding Income Tax (WHIT) and VAT on commercial rent contrary to Section 95 of the Tax Procedures Act, 2015,” reads a letter dated February 21, 2019 from the taxman to the county’s secretary.

However, on May 3, 2019, the County Executive Committee (CEC) member for finance, Mr Roble Said Nuno, objected to KRA’s figure, saying that the county only owes the taxman Sh101 million, which it said it would pay in three tranches: Sh50 million immediately from the county’s development account and the rest in two instalments at the end of May and June.

According to the Auditor General Edward Ouko’s report on pending bills which he released two months ago, Garissa County owes suppliers Sh1.9 billion as of February 15, 2019.

UNPAID SUPPLIERS

This was the third highest figure after Nairobi City County (Sh10.8 billion) and Mombasa County (Sh3.3 billion). But even as President Uhuru Kenyatta called on the national and county government’s to clear pending bills by the end of last month, Garissa County suppliers continue to suffer.

In a letter dated July 3, Mr Bare Mohamud Abdi, the secretary of Garissa County Contractors and Suppliers Welfare Association, petitioned the EACC and the Senate to intervene on their behalf.

“Indeed the Governor … is on record rubbishing the (Presidential) order and directives aforesaid and making bizarre claims to the effect that the county government records in respect of our members were swept away by a flooding River Tana,” said the letter.

In June, the Garissa County Assembly approved the county government’s budget which did not include the pending bills in spite of a petition by the suppliers, some of whom are owed from as far as 2013.

“We further request the Cabinet Secretary and the Controller of Budget to withhold disbursement of any further funds to the County Government of Garissa until it complies with the Presidential executive Order, the directives by the Controller of Budgets and the Auditor General and pays the said pending bills plus interest,” said Mr Abdi on behalf of the distraught businessmen.