Category: Investigations

THE SLEEPING GIANT: A DEBENTURE BORN IN LAGOS

In February 2006, a Lebanese construction company called Zakhem Construction Nigeria Limited signed a Deed of Debenture with Ecobank Nigeria PLC. To the uninitiated, a debenture is merely a technical word in commercial law.

To those who understand its lethal implications, it is a document that can reach across borders, across years, and across jurisdictions to claim everything a company will ever earn. In this case, Zakhem pledged every asset it owned or would ever own anywhere in the world.

Not just property and equipment, but all receivables. Every debt that any person, company, or government owed to Zakhem, anywhere on the planet, from that moment forward belonged first to Ecobank.

The original debenture covered a facility of One Hundred Billion Naira. It was registered with the Nigerian Corporate Affairs Commission on 7th June 2006. For eight years, it sat dormant, a perfectly engineered legal instrument waiting for a sufficiently large target to emerge.

The target arrived in July 2014. Kenya Pipeline Company, the strategic state corporation that moves petroleum products from the coast to the interior of Kenya, awarded Contract No. SU/QT/032N/13 to Zakhem International Construction Limited.

The contract was for the construction, testing, and commissioning of Line 5, a 450-kilometre oil pipeline from Mombasa to Nairobi.

The contract value was USD 484,502,886.40. At current exchange rates, that is approximately KES 62.9 billion. It was supposed to be Kenya’s infrastructure century project, a Vision 2030 flagship that would modernise fuel distribution and cement national energy security.

Within two months of winning the KPC contract, Zakhem had secured a USD 300 million credit facility from Ecobank, using the KPC contract proceeds as its primary collateral.

What followed was not the construction of a pipeline. What followed was the activation of the most sophisticated financial extraction mechanism ever deployed against a Kenyan public institution.

THE 300 MILLION DOLLAR TRAP

On 23rd September 2014, barely two months after winning the KPC contract, the board of directors of Zakhem International Construction Limited convened in Lagos, Nigeria. They approved a USD 300,000,000 credit facility from Ecobank Nigeria. That is three hundred million US dollars, approximately KES 39 billion at prevailing rates.

The securities Zakhem provided to Ecobank for this facility are documented in court papers filed in Nairobi’s Commercial and Tax Division. They include an All Assets Debenture covering all of Zakhem’s fixed and floating, present and future assets. They include a Personal Guarantee from Albert Zakhem for the full facility amount, supported by a notarised statement of his net worth.

They include Corporate Guarantees from Zakhem International S.A. dated 25th February 2005 and from the Kenyan entity dated 4th January 2014. They include 20 percent cash collateral for advance-payment guarantees and retention-money guarantees. And they include Letters of Domiciliation of the proceeds of the KPC contract to Ecobank’s accounts.

It is this last item that is the engine of the entire scheme.

The Letters of Domiciliation gave Ecobank a direct claim over the money that KPC owed Zakhem under the pipeline contract.

Not a secondary claim. Not a claim that would crystallise after Zakhem defaulted. A direct, first-ranking claim on the contract proceeds, structured in such a way that Ecobank effectively became an invisible sub-party to a government contract it had never won, in a country where it bore no regulatory obligation and offered no value.

Court documents filed in Nairobi reveal the precise terms of the facility.

Ecobank is recorded as having financed the contract upto an amount of USD 206,433,676.80. Against this, the bank received from KPC the sum of USD 17,943,447.40 through its Nigerian operations and USD 8,899,960.00 through its Kenyan subsidiary.

The combined recovery through both channels of USD 26,843,407.40 left a shortfall of approximately USD 52,785,027.27 that Ecobank would eventually pursue in Kenya’s Commercial Court.

THE DOMICILIATION LETTERS: THE SMOKING ARCHITECTURE

On 11th October 2014, less than three months after the KPC contract was signed, Zakhem sent two letters to KPC headquarters.

The letters gave what court filings describe as unconditional and irrevocable instructions. Seventy percent of the entire contract value, seventy percent of USD 484 million, was to be paid directly into Zakhem’s account with Ecobank Nigeria. The remaining thirty percent was to go to Zakhem’s account with Ecobank Kenya.

KPC confirmed receipt of these Domiciliation Letters on 13th October 2014, placing its dated stamp upon them.

What KPC did not disclose, and what would form the centrepiece of litigation that continues to this day, is that these letters created a three-way financial obligation involving a Nigerian bank, a Cypriot holding company, a Nigerian construction entity, and a Kenyan state corporation, all bound together by a 2006 debenture that predated the KPC contract by eight years.

KPC stamped the Domiciliation Letters on 13th October 2014. By doing so, it effectively invited a Nigerian bank into the most sensitive infrastructure contract in Kenya’s history without Treasury authorisation, without parliamentary oversight, and without public disclosure.

Court filings in Civil Suit 292 of 2018 reveal that Ecobank issued bank guarantees on behalf of Zakhem totalling at least USD 39 million in four tranches between September 2015 and September 2016. These guarantees enabled Zakhem to access advance payments and retention payments under the KPC contract.

The mechanism was elegant in its ruthlessness: Ecobank fronted the guarantees, KPC paid Zakhem, Zakhem was supposed to remit proceeds to Ecobank, and the debenture stood as the ultimate backstop.

When Zakhem allegedly began diverting payments to accounts at Stanbic Bank rather than Ecobank, the entire structure collapsed into litigation. Kenya became the arena in which a Nigerian bank, a Cypriot holding company, and their Kenyan-registered fronts fought over the spoils of a state contract.

What had been structured as a pipeline construction arrangement had, in reality, been structured as a foreign-controlled cash extraction mechanism from the moment the ink dried on the contract.

THE MANDATE THAT WAS NEVER DISCLOSED

A mandate letter dated 15th July 2015, obtained and reported by The Standard newspaper in its earlier investigation, reveals a fact of devastating significance.

The official financing arrangement for the KPC pipeline project involved a consortium of six Kenyan and international banks: CFC Stanbic Bank, Citibank, Commercial Bank of Africa, Co-operative Bank of Kenya, Rand Merchant Bank, and Standard Chartered Bank. These six institutions agreed to provide USD 350 million in financing, split among them in defined proportions.

The mandate letter, according to reporting by The Standard, specified explicitly that no other entities were to be involved as mandated lead arrangers, underwriters, or documentation agents, and that no additional compensation should be paid to any party not included in the original contract.

Ecobank Nigeria was not in this consortium. Ecobank Kenya was not in this consortium. Neither Ecobank entity appears in any official KPC financing document publicly available. And yet, by virtue of the debenture signed in 2006 and the Domiciliation Letters signed in October 2014, Ecobank had engineered itself a senior claim over contract proceeds that ranked, in practical terms, ahead of anything KPC’s own legal advisers had contemplated.

When KPC’s own annual reports spanning 2020 through 2023 were analysed, there is no mention of Ecobank Nigeria or Ecobank Kenya in connection with the financing of Line 5. The corporation that was a named defendant in a lawsuit demanding over USD 52 million had apparently not seen fit to disclose the existence of that lawsuit, or the financial arrangements that gave rise to it, in its annual reports for years.

HCCC 292 OF 2018: THE LAWSUIT THAT BLED THE NATION

In 2018, Ecobank Nigeria Limited and Ecobank Kenya Limited filed Civil Suit 292 of 2018 at the Commercial and Tax Division of the High Court of Kenya.

The defendants were Zakhem International Construction Limited of Nigeria, Zakhem Construction Nigeria Limited, Zakhem International Construction Limited of Cyprus, Zakhem Construction (Kenya) Limited, and critically, Kenya Pipeline Company Limited.

KPC, a state corporation owned entirely by Kenyan taxpayers, found itself a defendant in a foreign bank’s debt recovery action against a foreign construction company.

KPC had not borrowed money from Ecobank. KPC had not guaranteed Zakhem’s facility with Ecobank. KPC’s exposure arose entirely from the Domiciliation Letters it had stamped in October 2014, by which it had given unconditional irrevocable instructions to pay contract proceeds to Ecobank’s accounts.

When those instructions were subsequently honoured in part and diverted in part, Ecobank dragged KPC into court.

KPC immediately retained legal representation, entering into an engagement agreement for KES 90,000,000 in legal fees with MMA Advocates LLP, according to a separate court case, MMA Advocates v Kenya Pipeline Company, filed as Civil Case E202 of 2020 at the High Court.

Ninety million shillings in lawyers’ fees, paid by Kenyan taxpayers, to defend a state corporation from a lawsuit arising from its own decision to stamp letters it had apparently not fully understood.

KPC paid KES 90 million in legal fees in 2019 alone to defend itself in the Ecobank suit, a suit that arose from KPC’s own decision to stamp the Domiciliation Letters in 2014.

Justice Mary Kasango, presiding over the case in its early stages in July 2018, issued a freeze order on Zakhem’s bank accounts at CFC Stanbic and KCB banks while simultaneously stopping KPC from making any payments to Zakhem outside the terms of the Ecobank arrangement.

The order lasted only six days before expiry, but its significance was profound.

A Kenyan court had confirmed that there was a serious and arguable case that Zakhem’s contract proceeds were legally encumbered in favour of a Nigerian bank. The pipeline was finished; the accounting war had just begun.

THE DCI LETTER THAT COST KENYANS KES 3 BILLION

On 26th July 2019, the Directorate of Criminal Investigations wrote to KPC management directing the suspension of all payments to Zakhem pending investigation. It was, on its face, a legitimate exercise of investigative authority. In practice, it became one of the most expensive government letters in Kenyan history.

The dispute over Zakhem’s Extension of Time claims had been referred to an independent expert scheduler, M/s Nyara, who assessed the four core claims and determined the payable amount at USD 44,019,024.64. Both Zakhem and KPC had reportedly agreed on this figure. The DCI letter halted payment at the precise moment the parties were closest to resolution.

As a result of that halt, Zakhem initiated legal proceedings in the High Court in HCCC E322 of 2019, filed on 26th September 2019, seeking the full amount of USD 126,255,812.62 in unpaid sums. On 16th June 2020, the High Court issued a partial decree in Zakhem’s favour for USD 44,019,024.64. And because KPC had been directed by the DCI to stop paying, and had complied, Zakhem was now entitled to charge interest and penalties on the unpaid sum for every day it remained unpaid.

According to Kenya Pipeline’s own audited accounts and a July 2024 report by Business Daily Africa, the penalties and interest that accrued as a result of the DCI-ordered payment halt amounted to KES 3,027,732,573, equivalent to over USD 23 million at the time of accrual. Auditor General Nancy Gathungu noted in KPC’s 2023 audit that the delay in payment was occasioned by the DCI directive, and that the resulting penalties and interest were entirely avoidable.

A single letter from the DCI, suspending payments that both parties had agreed on, cost Kenyan taxpayers over KES 3 billion in avoidable penalties and interest.

Three billion shillings. Gone. Not from a heist at gunpoint. Not from a cyber fraud. From a government directive, written by one arm of the state, destroying the carefully negotiated financial position of another arm of the state, in circumstances where no charges were ever filed and no person was ever convicted of any offence related to the original contract.

THE ‘FULL AND FINAL’ SETTLEMENT THAT WAS NEITHER

In September 2023, KPC and Zakhem signed what was recorded as a consent judgment in HCCC E322 of 2019. The consent judgment fixed the total amount owed by KPC to Zakhem at USD 69,684,238.46, comprising USD 48,140,000 in principal and USD 21,544,238.46 in interest at six percent.

Business Daily Africa, reporting on KPC’s 2024 annual accounts, confirmed that KPC had treated this as a final settlement, describing it as the resolution of a long legal dispute with one of its contractors.

It was not final. It was not even a pause.

Within months of the consent judgment, Zakhem was back in court. Senior Counsel Ahmednasir Abdullahi, appearing for Zakhem, filed applications seeking to freeze KPC’s bank accounts at Standard Chartered Bank over an alleged remaining debt of Sh926 million.

The application was dismissed by Justice Josephine Mongare on 29th May 2025, on the grounds that Zakhem was raising the same arguments and tabulations it had already made before a court of concurrent jurisdiction, which the law does not permit. But Zakhem immediately regrouped.

In June 2025, Zakhem filed fresh garnishee applications against KPC’s accounts at Equity Bank, Stanbic, KCB, NCBA, Citibank, Co-operative Bank, and Absa Bank. This time, Justice Mongare allowed the application in respect of the Equity Bank account, issuing a Garnishee Order Absolute directing Equity Bank to pay Zakhem KES 485,000,000 from KPC’s accounts. The money was to be remitted directly to the bank account of Ahmednasir Abdullahi Advocates LLP at UBA Kenya Bank Limited, Upperhill Branch, account number 55030160006446.

So the money passed through not just from a state corporation to a foreign construction company but through the trust account of one of Kenya’s most politically connected and publicly controversial lawyers.

Court records confirm the transfer was executed. Equity Bank complied. KES 485 million left KPC’s accounts and entered a law firm’s trust account.

THE KRA DIMENSION: TAXING THE EXTRACTED

Amid the cascade of claims and counter-claims, the Kenya Revenue Authority inserted itself into the money flow in a manner that further complicated and multiplied KPC’s exposure. Following the 2020 partial decree in favour of Zakhem, KRA issued agency notices demanding tax from Zakhem. Because the money was to flow through KPC’s accounts, KPC found itself obligated to withhold and remit significant amounts to KRA before releasing the balance to Zakhem.

Court records show that KPC paid KRA KES 3,099,971,539 in October 2020 and a further KES 915,316,830 in January 2021, totalling over KES 4 billion in tax deductions from the Zakhem decree. Zakhem subsequently obtained letters from the National Treasury dated November 2022 and February 2023 confirming that all penalties and interest on its tax liabilities had been waived.

Justice Mongare, in her June 2025 ruling, found that KPC’s additional payments to KRA beyond the ordered amounts were at KPC’s own risk and could not extinguish its obligation to Zakhem, effectively ruling that KPC had overpaid KRA and was still indebted to Zakhem for the balance.

By this arithmetic, KPC paid the contractor. KPC paid the taxman. The taxman gave the contractor a waiver. The court told KPC it still owed the contractor more. And then the contractor refused to pay its own subcontractors.

THE SUBCONTRACTORS LEFT TO DIE

While billions flowed from KPC to Ecobank and from KPC to Zakhem and from Zakhem’s court-ordered recoveries into lawyers’ trust accounts, the Kenyan companies that physically built this pipeline were left destitute.

Azicon Kenya Limited was engaged by Zakhem to carry out electrical, instrumentation, and telecommunications installation works under a subcontract valued at approximately KES 1.3 billion. The firm completed its works, obtained certification for the installations, and was paid approximately KES 840 million, leaving a balance exceeding KES 460 million that has remained outstanding since 2020. The firm obtained a court decree ordering Zakhem to pay the amount. The decree has not been honoured.

In January 2025, Azicon served Zakhem with an insolvency statutory demand. Twenty-one days elapsed. Nothing was paid. Azicon then filed an insolvency petition at the High Court seeking to liquidate Zakhem International. In court documents filed in this proceeding, Azicon’s lawyer Collins Taliti alleged that Zakhem was actively scheming to avoid payment by incorporating new companies, including Mokowe Traders Limited and Bangal Marina Resorts Limited, to conceal assets and defeat enforcement. When Azicon attempted to attach Zakhem’s bank accounts at Stanbic Bank, they found a balance of KES 393,000. A company that had extracted over KES 9 billion from a government contract had KES 393,000 in its main banking account.

As of July 2025, when Zakhem received KES 485 million from KPC through the Equity Bank garnishee order, Azicon immediately moved to court demanding that the directors of Zakhem be jailed for contempt of court.

The directors in question, Ibrahim Salim Zakhem and Abdallah Salim Zakhem, the latter being the Honorary Consul of Lebanon in Nairobi, were summoned to appear before the court to explain why the decree had not been paid. Abdallah Zakhem is not just a contractor. He is a diplomat. He holds honorary consular status. He appears at official functions. His company has extracted billions from Kenyan taxpayers, left Kenyan subcontractors unpaid, and his family enjoys the protections of diplomatic courtesy while Kenya’s courts scramble to enforce their own orders.

Multiple ICD (Kenya) Limited pursued a separate claim against Zakhem for USD 3,286,590. They obtained a court order freezing KPC’s bank accounts in connection with this debt, arguing that KPC and Zakhem had conspired to defeat justice by refusing to release funds. The order was eventually lifted.

Oil Fields Engineering and Supplies Limited obtained a Mareva injunction in August 2023 restraining KPC from paying any further funds to Zakhem, an order that froze USD 31.3 million. Quality Inspectors obtained an arbitration award and found collection nearly impossible.

Zakhem extracted over KES 9 billion from a government contract. Its main Stanbic Bank account held KES 393,000 when creditors came looking. This is not insolvency. This is engineered invisibility.

THE JUDICIAL BATTLEFIELD: CASES, RECUSALS, AND THE CAROUSEL OF CLAIMS

No honest account of this scandal can avoid grappling with the sheer scale of the judicial manipulation that has accompanied it. The cases in which Zakhem, Ecobank, KPC, and their related parties have appeared include HCCC No. 292 of 2018, HCCC E322 of 2019, HCC Misc E042 of 2021, HCCC E276 of 2019, Civil Case E132 of 2020, Civil Case E202 of 2020, Misc Civil Application E1215 of 2020, HCCC Misc E329, E330, and E331 of 2022, Civil Application E503 of 2024, Civil Application E420 of 2024, Civil Application E436 of 2023, Miscellaneous Application E395 of 2025, Miscellaneous Application E590 of 2025, and Petition E021 of 2024. That is not a list of different legal disputes. That is a matrix of interconnected applications, stay orders, garnishees, recusals, appeals, arbitrations, and counter-applications, all circling the same KES 62.9 billion pipeline contract like vultures over a carcass.

The recusal attempts alone are staggering in their audacity. Ahmednasir Abdullahi filed an application demanding that Justice P.J. Otieno recuse himself from hearing the Oil Fields case on grounds of alleged partiality and bias.

The Court of Appeal was drawn into this recusal fight in Civil Application E503 of 2024, where it noted that questions of partiality had been raised even before a substantive order was granted, and that the integrity of the process itself had been called into question.

Justice Otieno refused recusal on 8th August 2024, observing that abandoning the case after substantive judicial resources had been invested would perpetuate the very delays that litigation abuse had created. Meanwhile, the DCI was ordered to investigate whether Professor Tom Ojienda, acting for Oil Fields, had allegedly approached Justice Otieno to tilt the scales in his client’s favour. The investigation report, if it exists, has not been made public.

The Legal fees claim by LJA Associates LLP, the firm that had previously represented various Zakhem entities and then fell into a dispute with them, was taxed at KES 279,792,000. That is two hundred and seventy-nine million shillings in legal fees claimed for work done in a single matter.

Lady Justice Mshila ruled in July 2023 that Ahmednasir Abdullahi Advocates LLP, which had come on record to replace LJA Associates, could only do so if it paid these fees into an escrow account.

The resulting dispute between the two law firms over who gets paid what, out of money that is itself the product of a dubious extraction from a state corporation, has spawned its own litigation in CA No. 134 of 2023.

Each court application, each appeal, each recusal attempt, each garnishee proceeding represents not just a legal strategy but a financial extraction in itself. Court fees, advocate fees, process server fees, and the time cost of senior state officials defending KPC in matters they cannot explain to auditors or to Parliament.

JOE SANG: THE MAN AT THE CENTRE OF EVERY STORM

No name appears more consistently at the intersection of the Zakhem-Ecobank scandal and Kenya’s broader energy sector dysfunction than Joe Sang. His career at Kenya Pipeline Company is a biographical mirror of the corporation’s descent into institutional crisis.

Sang was first appointed Managing Director of KPC in April 2016. During his first tenure, the Zakhem contract was in active execution. The Domiciliation Letters instructing KPC to pay 70 percent of contract proceeds to Ecobank had already been stamped.

The disputes over Extension of Time claims were escalating. The Ecobank lawsuit that would be filed in 2018 was being prepared. In December 2018, Sang was arrested alongside other senior KPC officials over the Sh1.9 billion Kisumu Oil Jetty project, charged with abuse of office and engaging in a project without prior planning. He resigned.

In December 2022, Sang and his co-accused were acquitted. A magistrate ruled that the prosecution’s case lacked merit and that the project had been properly planned. The Law Society of Kenya challenged his subsequent reappointment to KPC in January 2023 and formal reinstatement in April 2023 on grounds that it bypassed merit-based constitutional competition procedures. The challenge was unsuccessful.

During Sang’s second tenure, the consent judgment with Zakhem was signed in September 2023. As KPC’s own annual report for that year obliquely noted, a major reason for the KES 2.85 billion decline in the corporation’s cash reserves was the settlement of a long legal dispute with one of its contractors.

That contractor was Zakhem. The settlement Sang’s management signed was the one that was supposed to be full and final. Seventeen months later, Zakhem was back in court seeking hundreds of millions more.

On 2nd April 2026, Sang was arrested by the DCI, along with Petroleum Principal Secretary Mohamed Liban and EPRA Director General Daniel Kiptoo Bargoria, over allegations that they had manipulated fuel stock data to fabricate a shortage and justify the irregular emergency procurement of a KES 4 billion fuel shipment outside the Government-to-Government framework.

The shipment, carried by the vessel MV Paloma, docked between 27th and 29th March 2026 and is alleged to have been sourced from Saudi Aramco before being resold through international intermediaries at prices well above contracted rates. Investigators have suggested that the total loss to the public could reach KES 8 billion when a second related shipment is factored in. Sang resigned on 4th April 2026. He has not publicly addressed the Zakhem-Ecobank dimension of his time at KPC.

Joe Sang was KPC’s Managing Director when the Domiciliation Letters were confirmed, when the DCI halt letter was issued, when the consent judgment was signed, and when the fuel manipulation scheme allegedly ran. He must now account for all of it.

THE PATTERN OF KPC: AN INSTITUTION DESIGNED TO BE LOOTED

The Zakhem-Ecobank affair does not exist in isolation. It is the latest chapter in a documented pattern of systematic extraction from Kenya Pipeline Company that stretches back two decades.

In 2009, the Triton Oil Scandal saw corrupt KPC staff exploit a new computer system to steal 126 million litres of petroleum products valued at KES 7.6 billion. It remains one of the largest corporate frauds in Kenya’s history. The Managing Director was dismissed. No comprehensive recovery was ever achieved.

In 2013 and 2014, KPC purchased 60 hydrant pit valves for JKIA at a cost of KES 647 million, pricing each valve at approximately KES 10 million when the market price was KES 1.5 million. In January 2025, four individuals were convicted over this procurement fraud. They received non-custodial sentences. Fines instead of prison. The message was clear: loot KPC, pay a small fine, walk free.

In 2016 and 2017, the Kisumu Oil Jetty project saw KES 1.9 billion spent on infrastructure that prosecutors alleged was improperly planned. Joe Sang was charged. He was acquitted in 2022. The money does not appear to have been recovered.

Now in April 2026, the fuel data manipulation scandal has cost the country at least KES 4 billion and potentially KES 8 billion in a single fraudulent procurement cycle. And all the while, the Zakhem machine has been running in the background, extracting tens of billions through court orders and consent judgments and garnishee proceedings, using Kenya’s commercial courts as a factory for the transfer of public wealth to foreign interests.

The cumulative financial exposure from the Zakhem contract alone now exceeds KES 78 billion when all claims, settlements, penalties, interest, and legal costs are aggregated. This from a contract originally worth KES 62.9 billion. The contractor has extracted more than the original contract value. And the claims continue.

THE FINANCIAL RECKONING: WHAT HAS KENYA LOST

THE MONEY TRAIL: DOCUMENTED FINANCIAL EXPOSURE

Original KPC Contract Value: USD 484,502,886 (KES 62.9 billion)  July 2014

Ecobank Facility Extended to Zakhem: USD 300,000,000 (KES 39 billion)  September 2014

Ecobank Claim in HCCC 292/2018: USD 52,785,027 (KES 6.8 billion)  Amount in arrears

Partial Decree, June 2020: USD 44,019,024 (KES 5.7 billion)  HCCC E322/2019

Consent Judgment, September 2023: USD 69,684,238 (KES 9 billion)  Inc. interest at 6%

KRA Tax Payments by KPC: KES 4,015,288,369  October 2020 and January 2021

Avoidable Penalties from DCI Halt: KES 3,027,732,573 (KES 3 billion)  Auditor General confirmed

KPC Cash Reserve Decline, FY 2024: KES 2,850,000,000 (KES 2.85 billion)  Zakhem-linked payments

Garnishee Order, June 2025: KES 485,000,000  Equity Bank, paid to Ahmednasir LLP trust

LJA Associates Legal Fees Taxed: KES 279,792,000  In escrow dispute

Azicon Kenya Unpaid Decree: KES 460,000,000+ Subcontractor, unpaid since 2020

TOTAL DOCUMENTED EXPOSURE EXCEEDS KES 78 BILLION. NEW CLAIMS REMAIN PENDING.

THE CRIMINAL QUESTION

The evidence assembled from court files, audited financial statements, parliamentary records, and media investigations raises questions that the Director of Public Prosecutions and the Directorate of Criminal Investigations cannot continue to ignore.

The 2006 debenture registered in Nigeria and the 2014 Domiciliation Letters signed in Kenya together created a mechanism by which Kenyan public contract proceeds were pledged as collateral for a foreign private bank loan without Treasury approval, without parliamentary sanction, and without the knowledge of the Kenyan public. Whether the legal instruments themselves constitute fraud under Section 318 of the Penal Code or obtaining by false pretences under Section 313 turns on facts that only a properly resourced forensic investigation can establish. But the question must be asked and it must be answered.

The signing of a consent judgment described as full and final in September 2023 and the subsequent filing of fresh claims on the same contract in 2025 raises the question of whether a conspiracy to defraud under Section 317 of the Penal Code was engaged. The consistent pattern of filing multiple overlapping applications across different case numbers, obtaining interim freeze orders on KPC accounts, causing operational disruption to a national infrastructure operator, and then negotiating settlements that are immediately relitigated, constitutes, at minimum, potential abuse of court process and at maximum, a coordinated scheme to extract public funds through judicial mechanisms.

The routing of Kenyan public contract proceeds through Nigerian bank accounts, Cypriot holding companies, and ultimately through a chain of corporate entities whose beneficial ownership structure has never been made transparent to Kenyan authorities raises serious questions under the Proceeds of Crime and Anti-Money Laundering Act, 2009. Money laundering does not require that the underlying transaction be a robbery. It requires only that the movement of money be structured to obscure its origin or ultimate destination. The debenture-domiciliation structure described in this report does precisely that.

Finally, KPC’s failure to disclose in its annual reports the existence of the Ecobank lawsuit, the domiciliation letters, the foreign debenture structure, and the quantum of financial exposure from the Zakhem contract over a period of years raises questions about whether directors and management breached their fiduciary duties under the State Corporations Act and the Companies Act.

WHAT MUST NOW HAPPEN

The DCI has demonstrated in April 2026 that it can move swiftly when the political will exists. Petroleum PS Mohamed Liban, KPC Managing Director Joe Sang, and EPRA Director General Daniel Kiptoo Bargoria were arrested within hours of the President’s public signal. Their resignations followed within two days. The state can act when it chooses to.

The question is whether this same resolve will be applied to a scheme of far greater financial magnitude and far longer duration. The Zakhem-Ecobank extraction has been running since at least 2014. It has already cost the public, by the most conservative accounting, more than KES 20 billion in unnecessary payments, avoidable penalties, legal fees, and financial drain on a state corporation. By a comprehensive accounting, the exposure exceeds KES 78 billion.

The DPP Renson Ingonga and DCI Director Mohamed Amin must initiate a full forensic investigation into the debenture signed in Lagos in 2006, the credit facility extended in September 2014, the Domiciliation Letters stamped by KPC in October 2014, the banking records of all relevant entities at Ecobank Nigeria, Ecobank Kenya, Stanbic Bank, and any other institution that processed contract proceeds, the settlement of September 2023 and the persons who negotiated it on KPC’s behalf, and the source and destination of the USD 485 million disbursed through Equity Bank in June 2025 and remitted to a law firm trust account.

Travel bans and asset freezes must be considered for the principals of Zakhem International, foreign nationals who have demonstrated the capacity and willingness to move money offshore and to place assets out of reach of creditors and courts. Abdallah Zakhem holds honorary consular status in Kenya. That status does not confer immunity from criminal process. It does, however, make early action essential before documents, assets, and persons disappear.

Joe Sang must be questioned comprehensively, not just about the fuel scandal for which he has already been arrested, but about the entire Zakhem affair from 2016 to 2026. He was the Managing Director when the DCI halt letter was issued. He was the Managing Director when the consent judgment was signed. He was the MD when fresh claims were filed on a supposedly settled contract. He must account for all of it.

The Law Society of Kenya must investigate whether advocates who signed full and final settlements and subsequently filed fresh claims on the same contracts, or who facilitated the legal architecture of the domiciliation scheme, committed professional misconduct within the meaning of the Advocates Act.

Parliament’s Public Investments Committee, which four years ago threatened to issue arrest warrants for Ibrahim Zakhem when he ignored its summons, must reconvene. The full financial exposure of KPC from this contract must be tabled before the National Assembly and Senate. Kenyans must know how much was paid, to whom, on whose authority, and what, if anything, remains to be paid.

The pending Fast Track case filed by Zakhem in January 2026 seeking a further USD 6,029,388.94 must be stayed pending the outcome of criminal investigations. If judgment is entered before investigations are complete, Kenya will have no legal basis to resist further enforcement. The courts have been weaponised long enough. They must now serve justice.

THIS IS KENYA’S MONEY. IT MUST COME BACK.

The ordinary Kenyan who fills their vehicle at a petrol station pays a fuel levy that flows in part to KPC. The businessperson who depends on timely petroleum delivery pays when KPC is financially hamstrung by runaway litigation. The citizen who believes in an independent judiciary sees that institution exploited as a cash machine for interests that have never paid a tax in this country, never built anything that was not already paid for, and have left not one genuine legacy in this land except a pipeline that leaks, a string of lawsuits that never end, and a balance sheet that bleeds.

For nearly a decade, Managing Director Philip Mainga has presided over a corporation in open institutional free fall. Court orders have been flouted within hours of service. Tenders worth tens of billions have been awarded to higher bidders in defiance of procurement review rulings. Public land worth hundreds of millions has been grabbed, sold and transferred under forged documents. A Sh88.2 million tender was directed to a company controlled by the MD’s own fiancée. And through it all, the board has maintained a studied silence while investigators have repeatedly been stopped in their tracks. This is the true state of Kenya Railways Corporation.

A CORPORATION BUILT ON IMPUNITY

Kenya Railways Corporation occupies a peculiar and deeply troubling position in the landscape of Kenyan state institutions. It controls some of the most valuable real estate in the country, manages the single largest infrastructure debt obligation in the nation’s history, and is tasked with delivering a multi-trillion-shilling pipeline of transport projects. Yet from the moment Philip Mainga took substantive control of the organisation in January 2020, the record is one of systematic procurement manipulation, predatory land dealings, judicial defiance, and the calculated suppression of internal dissent.

The accumulated evidence, drawn from court records, parliamentary proceedings, audit reports and investigative disclosures, does not tell the story of a poorly-run institution. It tells the story of a deliberately captured one, where the machinery of procurement, recruitment and land management has been redirected to serve private interests at the expense of the public.

Mainga’s tenure officially expired on January 3, 2026. Yet the Kenya Railways Corporation board, relying on a High Court ruling that declined jurisdiction to intervene in the matter, has maintained complete silence. No public notice of competitive recruitment has been issued. No announcement of a planned succession has been made. Insiders confirm that the board has been content to leave the expired MD in place, shielding him from accountability and allowing the corporation’s affairs to continue under a leadership whose mandate has lapsed.

THE TENDER ENGINEERED FOR CRBC

The single most brazen episode in Kenya Railways’ recent history concerns the Sh29.5 billion tender for the construction of the Nairobi Railway City Central Station. The project, which will anchor the 425-acre Railway City redevelopment partly funded by the United Kingdom government, drew bids from three Chinese firms. China Civil Engineering Construction Corporation submitted the lowest bid at Sh22.9 billion. China Road and Bridge Corporation submitted a bid of Sh29.5 billion. A consortium of China Overseas Engineering Group Company Limited and China Railway Group Limited submitted the highest quote at Sh32.5 billion.

The rules governing the evaluation of such tenders exist for a reason. Technical and financial proposals are required to be submitted separately, precisely to ensure that evaluators assess technical merit without being influenced by price information. CRBC, according to proceedings before the Public Procurement Administrative Review Board, placed both its technical and financial proposals on flash disks inside a single envelope. The board, in a ruling issued on January 26, 2026, found this to be not a minor irregularity but a fundamental breach that rendered the CRBC bid non-responsive from the outset.

The PPARB ruling was unequivocal. It held that Kenya Railways’ evaluation committee had acted erroneously and in a manner guided by misdirected reasoning in proceeding to score CRBC’s financial proposal despite the submission defect. The board nullified the award and directed Kenya Railways to re-evaluate the remaining compliant bids within 21 days.

“No serious investor commits billions to a project where the rules change depending on who is receiving the kickbacks.”

Kenya Railways ignored the directive. On February 16, 2026, the corporation again declared CRBC the best bidder, triggering a second appeal. When CCECC and the consortium mounted that second challenge, CRBC filed a High Court application to block the PPARB from hearing it. On March 11, the High Court suspended the PPARB proceedings, effectively freezing the review mechanism that exists to protect procurement integrity.

Then came the deportations. Two days after the High Court suspended the PPARB proceedings, security operatives fanned out across Nairobi and Kisumu in coordinated night-time operations. Zhang Hongze, CCECC’s representative along Riverside Drive in Lavington, was taken by officers who did not identify themselves. Zhang Fangyi, based at CCECC’s camp along the Kisian-Usenge road in Kisumu where the firm is constructing the Sh2 billion Dhogoye bridge, was physically removed from his worksite by men who identified themselves as police.

Both men were transported to Jomo Kenyatta International Airport and placed on Kenya Airways flight KQ886 to Guangzhou. The Kisumu High Court subsequently issued an injunction restraining the deportation of further CCECC personnel, with CCECC arguing in court papers that the harassment was orchestrated by business rivals who had conspired with government respondents to intimidate the firm into abandoning its procurement challenge. The potential cost to the taxpayer of the government’s inexplicable preference for the higher bidder stands at Sh7 billion, representing the differential between CCECC’s Sh22.9 billion offer and CRBC’s Sh29.5 billion award.

MAINGA’S PRIVATE PROCUREMENT CHANNEL

The Railway City tender is not an anomaly. It is the most recent manifestation of a procurement culture that has operated throughout Mainga’s tenure. In March 2025, the Directorate of Criminal Investigations launched a probe into a Sh88.2 million tender, reference number KR/SCM/FRC/003/2019-2020, awarded to First Choice General Supplies, a business controlled by Peninah Patricks, Mainga’s long-term fiancée.

The irregularities documented in the tender are specific and serious. The required procurement paperwork was allegedly backdated. Payments were processed hastily in a manner that investigators found inconsistent with normal disbursement procedures. The process used restricted bidding, keeping the field of competition deliberately narrow. Most significantly, the tender value was engineered to circumvent the Sh30 million threshold established under the Public Procurement and Disposal Regulations of 2020, a threshold that triggers additional oversight and approvals. By structuring the award at Sh88.2 million but through restricted bidding, the management avoided the scrutiny that a properly competitive process would have attracted.

The matter was placed before a legislative oversight committee, which directed further inquiry. Activist group Bunge la Mwananchi subsequently petitioned the High Court seeking, among other remedies, a forensic audit of Kenya Railways and a lifestyle audit of Mainga personally. The petition called on the Ethics and Anti-Corruption Commission to investigate and recommend charges to the Director of Public Prosecutions if the evidence supported prosecution.

Mainga’s response to the accumulation of allegations against him has been characteristic. In April 2024, having learned that dismissed employees were cooperating with media organisations to expose internal malpractices, he issued stern warnings invoking CAP 187, threatening legal action against any person who disclosed official documents without authorisation. Legal experts were quick to note that the provisions he cited had been declared unconstitutional, making the threat legally hollow. But the intent was transparent: the Managing Director of a public institution was deploying state apparatus to silence those who would expose his conduct.

LAND: THE ORIGINAL SIN

No aspect of Mainga’s record is more extensively documented than the systematic looting of Kenya Railways land under his watch. The scale is staggering. An audit report for the year ended June 30, 2020, identified 529 parcels of railway land that had been illegally allocated to third parties without the corporation’s consent, stretching from Nairobi to Mombasa, encompassing industrial plots in Limuru, parcels at Kikuyu and Mombasa stations, and significant acreage in Nakuru.

In Mombasa’s Shimanzi area, three prime parcels reserved for the corporation’s expansion were grabbed and transferred to private developers through forged documents and misrepresentation. One parcel was reportedly sold for Sh58.2 million and earmarked for a grain handling terminal by its new, illegitimate owners. The properties were collectively valued at over Sh100 million.

The most audacious scheme involved the Dupoto and Dafur Settlement Scheme in Embakasi, a 90-acre parcel sitting between the flight path, the Standard Gauge Railway corridor and Nairobi National Park. Under the scheme as reported, title deeds were issued to proxies for land fraudulently allocated within the settlement. The government was then induced to compensate these proxies to vacate, transferring billions of shillings in public funds into accounts that were subsequently drained by the scheme’s architects. Over 544 parcels of public land were, under Mainga’s tenure, illegally allocated to private individuals.

A DCI investigation was opened into these dealings. It was abruptly halted following, according to investigative sources, a call from State House. The EACC, which separately attempted to investigate the Dupoto scheme, was similarly stopped before it could proceed to any meaningful conclusion. Meanwhile, Mainga himself was summoned to DCI headquarters in May 2019, where he recorded a statement for hours over dubious land compensation payments connected to SGR Phase 2. He was called back for further questioning the following day.

On the Makongeni container yards and buildings, Mainga is alleged to have unilaterally leased the facilities for ten years without board approval, without following internal procedures, and with full knowledge that the Kenya Ports Authority had taken possession of the property without a formal handover. The consequence was the loss of Sh23 million per month in storage and container transport charges. Across the duration of that unauthorised arrangement, Kenya Railways haemorrhaged over Sh400 million. Not a single internal disciplinary process was initiated.

THE SGR DEBT TRAP AND THE AUDITOR-GENERAL’S VERDICT

Beneath the catalogue of procurement fraud and land theft lies a more fundamental financial catastrophe, one that now threatens the corporation’s very solvency. The Standard Gauge Railway, financed by the China Export-Import Bank at a total cost exceeding Sh500 billion across its two phases, was projected to move 22 million tonnes of freight annually. It moves roughly a quarter of that. In the year ended June 2025, Kenya Railways posted a net loss of Sh28.17 billion and sits on negative equity of Sh121 billion.

Auditor-General Nancy Gathungu was blunt in her assessment. Her report for the year ended June 2024 found that Kenya Railways’ failure to meet loan obligations when due had attracted avoidable expenditure of Sh34.1 billion, comprising Sh5.3 billion in penalties and Sh28.85 billion in interest. The Auditor-General was explicit: this expenditure was not a proper charge to public funds. By June 2025, arrears on the SGR loan had accumulated to Sh413.36 billion, representing 80.82 percent of the total Sh511 billion owed to the Treasury by all state corporations combined.

The SGR escrow account has never reached its required minimum balance of Sh25 billion, a structural failure that has locked out all revenue-based loan repayments since commercial operations began. The National Treasury has had to service the loans directly while attempting to recover reimbursement from a corporation that cannot generate sufficient cash flow.

An Africa Star Railways operating deal, executed during a predecessor’s tenure but initiated by Mainga himself, saw Kenya Railways lose up to Sh1.4 million daily through a lopsided arrangement that ran essentially unchecked. Two activists petitioned the court in 2023 alleging that irregular extensions and dealings connected to the SGR establishment had led to a loss of Sh700 billion of taxpayer funds.

Kenya Railways sits on negative equity of Sh121 billion. Arrears on the SGR loan have reached Sh413.36 billion. The board’s response has been silence.

Busia Senator Okiya Omtatah has told courts that Kenya Railways is, for all practical purposes, technically insolvent. The Executive and Parliament have nonetheless approved a railway project portfolio for the corporation valued at approximately Sh2.824 trillion. The juxtaposition is grotesque: a corporation drowning in debt and governance failures is being handed an even larger mandate, with no credible mechanism for accountability in place.

CONTEMPT AS INSTITUTIONAL POLICY

The corporation’s attitude to judicial oversight has been consistent and deeply revealing. In January 2026, the High Court, before Justice Bahati Mwamuye, issued interim conservatory orders halting construction of the Sh11 billion Riruta-Lenana-Ngong metre gauge commuter railway project pending hearing of a constitutional petition filed by Senator Omtatah together with activists Bernard Muchiri and Naomi Misati. The orders were comprehensive: no further construction, no further financing, no disbursement of Railway Development Levy funds without parliamentary approval. The orders were served electronically and physically on January 20 and 21, with all parties acknowledging receipt.

Construction resumed on January 22, 2026, one day after service. It continued on January 24 and January 25. Misati’s lawyers issued a cease-and-desist letter on January 23 warning of the breach. It was ignored. The contempt application filed on January 28 named Philip Mainga alongside Treasury Principal Secretary Chris Kiptoo, Cabinet Secretary Mercy Wanjau, Transport Principal Secretary Mohamed Daghar, Attorney General Dorcas Oduor and CRBC General Manager Xiaodong Yu, among others.

Kenya Railways’ response before the court was that activity on the site had been limited to securing the perimeter, a characterisation the petitioners contested as a euphemism for continued construction activity. The court varied its orders to permit works necessary for site safety, a concession the corporation appeared to receive with some relief. By March 2026, the court had ordered the disclosure of feasibility studies, procurement records, parliamentary approvals and environmental impact assessments, finding that the petitioners had established a valid constitutional basis for access to the information.

The contempt proceedings were not the first time Mainga had been named for judicial disobedience. The pattern is structural, not incidental. When courts act, Kenya Railways management finds ways to circumvent, delay or procedurally outmanoeuvre the order rather than comply with its spirit.

THE RECRUITMENT MARKET: POSITIONS FOR SALE

The corruption at Kenya Railways is not confined to procurement. Internal sources have documented a pattern in which senior positions are awarded not on merit but for payment. The appointment in 2024 of Benedict Kiema Kavua, a procurement manager from Nairobi Water and Sewage Company, to the role of General Manager Procurement at Kenya Railways attracted immediate internal fury.

Kavua is alleged to have lacked the requisite professional licence at the point of shortlisting. Two internal managers who had previously served in that position and whose experience and performance records were well-documented were passed over. Sources characterised the appointment as a direct result of a bribe paid to Mainga, and the broader wave of appointments made at the same time as a systematic purge of institutional memory ahead of the MD’s anticipated exit.

The appointment of Stanley Cheruiyot as General Manager Business and Commercial generated similar consternation. Cheruiyot was a principal business development officer with no senior management experience. Two senior managers with demonstrated track records in that capacity were overlooked. Sources described the pattern as deliberate: Mainga was installing loyalists without institutional knowledge so that the documentation of his deals and the networks he had built would be impossible to reconstruct once he departed.

A PENSION FUND IN TATTERS

The victims of the Kenya Railways governance catastrophe are not abstract. They include thousands of former employees whose pension savings have been mismanaged with impunity. The EACC initiated an investigation into senior KRC officials over the alleged mismanagement of Sh8 billion designated for retirees through the Kenya Railways Staff Retirement Benefits Scheme, focusing on the scheme’s involvement in the questionable sale of 139 acres of Makongeni land.

Five years before the EACC investigation, the DCI had already probed allegations that Kenya Railways sold prime properties belonging to the scheme at significantly reduced prices to preferred bidders, who immediately resold them at profit. Neither investigation resulted in prosecution. A parliamentary committee in 2025 directed Kenya Railways to pay outstanding pension to a former station manager who served for 17 years and had still not received his due. The committee found that administrative failures, deliberate or otherwise, had left pensioners destitute while management built personal fortunes.

INVESTORS EXIT, QATAR FILES LEGAL NOTICE

The cumulative effect of this governance environment on investor confidence is measurable and severe. A legal notice from a senior official of the Qatar Chamber of Commerce emerged in court proceedings, documenting unfulfilled real estate commitments made to Qatari investors in connection with the Railway City and SGR station land development programme. The accusation was that Kenya Railways had enticed foreign investors with land development promises and subsequently reneged, generating an international legal dispute that further damaged the corporation’s reputation in Gulf capital markets.

Multiple credible local and international firms have either declined to engage with Kenya Railways procurement processes or withdrawn from negotiations after discovering the nature of the environment they would be operating in. When the lowest bidder can be disqualified not on technical grounds but through a procedural sleight of hand, then intimidated out of challenging the decision through deportation of its personnel, no rational investor with governance standards can remain at the table.

The UK government’s involvement in financing the Railway City project amplifies the reputational stakes. British taxpayer funds are committed to a project whose procurement is now the subject of multiple court challenges and a PPARB ruling that Kenya Railways has twice refused to comply with. The Bunge la Mwananchi petition specifically sought to halt the disbursement of UK funding until a forensic audit had been conducted and governance standards established.

WHAT THE INSTITUTIONS MUST DO

The Ethics and Anti-Corruption Commission and the Directorate of Criminal Investigations are not institutions without resources. They have the legal mandates, investigative powers, and prosecutorial pathways to act. What has been lacking, consistently, is the institutional courage to follow the evidence to its conclusion regardless of who the evidence implicates.

The EACC must open a full forensic investigation into the Railway City tender process, examining not merely the procurement outcome but the entire chain from tender design through technical evaluation to final award and the subsequent deportation of competing bidders. It must interrogate the relationships between Kenya Railways management and both CRBC and the political intermediaries reportedly brokering contractor access. It must examine every land transaction under Mainga’s tenure, tracing money flows from fraudulent compensation schemes through the bank accounts identified in the Dupoto case to their ultimate beneficiaries.

The DCI’s probe into the Sh88.2 million First Choice General Supplies tender must be concluded and its findings referred to the Director of Public Prosecutions without further delay. Peninah Patricks must be compelled to provide documentation of her company’s legitimate business activities preceding the award. Parliamentary committees must demand that Kenya Railways produce the full procurement file for that tender, including the backdated documentation flagged by investigators.

The Attorney General, who is herself named as a respondent in the Riruta-Ngong contempt proceedings for failing to enforce the court’s orders, must answer for the decision to allow construction to resume within 24 hours of service. The Treasury Principal Secretary must account for the disbursement of Railway Development Fund monies for a project that a court had expressly barred from receiving such funds without parliamentary appropriation.

The Kenya Railways board, having allowed a managing director with an expired mandate to continue exercising executive authority, must be held to account for this failure of corporate governance. The State Corporations Advisory Committee must compel an immediate competitive recruitment process for the position of Managing Director. Transport Cabinet Secretary Davis Chirchir, reportedly brought in to clean up the ministry’s affairs, must demonstrate that his mandate extends to Kenya Railways and that it is not merely rhetorical.

The SGR debt restructuring secured in late 2025, which converted the dollar-denominated China Exim Bank loans to yuan and extended the maturity to 2040, was a necessary but insufficient measure. The Sh413.36 billion in accumulated arrears must be subject to a comprehensive public reckoning that explains, in granular detail, how penalties of Sh5.3 billion and avoidable interest of Sh28.85 billion were allowed to accrue when the Auditor-General had been flagging the problem for years.

CONCLUSION: THE BILL ALWAYS COMES DUE

Kenya Railways Corporation is not merely underperforming. It is actively being looted by its own leadership, and the mechanisms designed to prevent such looting have been captured, ignored or intimidated into ineffectiveness. The corporation carries the aspirations of millions of Kenyans who were promised that a modern railway network would transform the nation’s logistics, reduce congestion, lower the cost of doing business and connect communities from Mombasa to Malaba.

Those aspirations have been subordinated to a culture of kickbacks so brazen that a tender is awarded to a higher bidder, the procurement review board is defied twice, the losing bidder’s personnel are forcibly deported, and the managing director remains in office past his contract’s expiry, protected by a board that knows exactly what it is protecting.

The bill for this impunity is not paid by Philip Mainga or the directors who authorise the deals. It is paid by the pensioner who spent 17 years on the railway and cannot access his retirement benefits. It is paid by the communities displaced without compensation along SGR corridors. It is paid by the taxpayer servicing Sh34 billion in avoidable loan penalties. It is paid by the investor who commits capital to a procurement process, wins on merit, and watches the contract handed to a rival who paid the right people.

Kenya cannot build a competitive economy on railways built on sand. The institutions of accountability exist. The evidence is on the record. The question that history will judge is whether those institutions chose to act when the rot was still containable, or whether they too became part of the machinery of plunder.

Inside a nondescript industrial park in Kamakis on the eastern fringes of Nairobi, Kenya Revenue Authority enforcement officers converged on a shipping container being quietly offloaded under the cover of routine logistics activity.

The container, numbered MAGU5438993, had sailed from the United States, been logged through the port at Mombasa, cleared through the Compact Special Economic Zone in Nairobi under circumstances that investigators now describe as deeply irregular, and was within hours of vanishing into the wholesale trade networks that supply Kenya’s sprawling urban markets.

What happened next would unravel one of the most audacious tax evasion and smuggling operations to surface in Kenya in recent memory.

The seizure at Viken Thirty Industrial Park was no accident. It was the product of a whistleblower within the KRA’s own ranks, who had leaked evidence of the irregular clearance to the Commissioner General’s office.

The informant’s tip set off a chain of events that now has Interpol involved, a Kenyan-American dual citizen identified as the alleged architect of the scheme on the police radar, and a clutch of senior KRA verification officers facing interdiction proceedings that could end their careers and place them before criminal courts.

The man at the alleged centre of this web is Peter Mwaniki Maina, a Kenyan national holding dual American citizenship who investigators believe ran a highly coordinated smuggling ring with both international and domestic tentacles.

His second wife, Stacy Wangari Njiri, who reportedly resides in an upmarket residence along Kiambu Road in Nairobi, is accused of being the key local operator, overseeing the deconsolidation, storage and redistribution of imported contraband goods into the Kenyan market.

The two have been publicly promoting a logistics company called Arisilva Logistics across social media, a venture investigators suspect was used to provide a legitimate commercial veneer for an operation that was, in substance, anything but.

Neither Maina nor Njiri had, at the time of publication, been formally charged. Investigators caution that the case remains active and the identities of other participants have not been fully established. Attempts to reach Arisilva Logistics through publicly listed contact details were unsuccessful before publication.

THE MECHANICS OF THE FRAUD

The scheme, as reconstructed by investigators, was built on the exploitation of two well-known vulnerabilities in Kenya’s customs administration: insider access within the KRA’s verification systems, and the structural generosity of the returning residents tax exemption programme.

Under Kenyan law, citizens who have lived abroad and are permanently returning home are entitled to import personal effects, household goods, and one motor vehicle free from import duty, excise duty, value added tax, and import declaration fees.

The exemption is administered through the Integrated Customs Management System, and is a legitimate and widely used facility.

However, investigators allege that Maina, by virtue of his dual citizenship and apparent familiarity with the process, manipulated the scheme using falsified documentation and fake identities to pass off commercial consignments as personal imports, thereby evading millions of shillings in taxes on goods that were never intended for personal use.

The specific container seized at Kamakis had arrived in Kenya aboard the vessel CMA CGM Puccini on February 21, 2026, shipped by ECU Worldwide USA from an American port and forwarded through Compact FTZ Development Ltd and Compact Freight Systems.

KPA tracking records reviewed by investigators showed the container entered via rail link to the inland container depot and was formally cleared by customs with an approval number and a release stamp before being dispatched for offloading at the Kamakis industrial facility.

The fact that it carried a customs release notation despite allegedly containing undeclared goods pointed, investigators said, to the unmistakable hand of an insider.

Sources familiar with the probe say that the shipment is believed to have contained undeclared merchandise, with suspicions extending to counterfeit goods and possibly illicit substances, a development that has widened the scope of the investigation from a pure revenue offence to one with potential public health implications.

If that suspicion is confirmed, the legal exposure for everyone in the clearance chain expands considerably beyond tax fraud into organised crime territory.

THE BROADER CRACKDOWN AT MOMBASA PORT

The Kamakis seizure did not happen in isolation. It is part of a wider enforcement wave that KRA announced on March 18, 2026, in which six of its employees, including senior officials, were interdicted and 21 cargo clearing agents had their licences suspended following investigations at the Port of Mombasa that uncovered a separate but related scheme. In that operation, the KRA recovered Sh452.5 million after investigators discovered that consignments of imported cargo had been passing through the port without properly settled tax obligations.

The mechanics of that scheme were equally audacious. Invoices were logged into both the KRA’s iTax system and the Integrated Customs Management System purporting to show that taxes had been paid, with the payments apparently recorded as M-Pesa to M-Pesa transactions. When investigators traced the mobile numbers linked to those transactions, they found no corresponding M-Pesa statements to confirm the money had actually moved. The invoices were, in effect, digital ghosts: they existed on paper but corresponded to nothing in the real financial world. A batch of mobile phone numbers was then reverse-traced to specific individuals, drawing a direct line from the fraudulent records to the KRA staff and clearing agents who have since been interdicted or suspended.

The KRA, confirming the purge in a statement, warned that the investigations were ongoing and that more individuals could be snared as investigators widened their scrutiny of transactions across both the iTax and iCMS platforms. The taxman has also looped in the Directorate of Criminal Investigations, which is now examining the owners of the implicated cargo, not just the agents who cleared it. “These investigations target not only clearing agents but also importers and any other parties who may have participated in or benefited from the fraudulent activities,” the KRA said.

A PORT CHRONICALLY VULNERABLE TO ORGANISED CRIME

Mombasa’s port has long been identified as Kenya’s most exposed trade gateway. It processes the bulk of the country’s import and export traffic and sits astride some of the most significant regional trade corridors in East Africa. That combination of volume and strategic importance has made it a perennial target for sophisticated criminal networks.

The rice scandal of 2025, in which 199 containers of imported rice valued at over Sh120 million disappeared from port custody and found their way into the market without passing through proper inspection, demonstrated the depths to which insider collusion could compromise even a digitised system.

KRA’s own enforcement staff had their system access rights revoked in that case, and enforcement managers at container freight stations were replaced in an attempt to restore integrity. The reverberations of that case were still being felt when the latest dual scandal broke.

Kenya has separately seen a pattern of high-value goods being smuggled under false commodity declarations: luxury vehicles listed as household items, stolen Range Rovers and Mercedes vehicles shipped as transit cargo and then diverted locally, untaxed cigarettes concealed in containers labelled as something else entirely.

In January 2026, KRA intercepted 9.37 million sticks of contraband cigarettes worth Sh281.1 million at Mombasa, with the haul declared as originating from Cambodia via Singapore but stamped “Made in Sudan.” That operation involved a multi-agency team including port police, the Kenya Bureau of Standards, the Anti-Counterfeit Authority, Port Health Services, and KPA customs officers.

In the most recent wave, KRA also announced the seizure of 23 smuggled prime movers in Nairobi’s Industrial Area, found to have tampered chassis numbers and registration plates spanning South Africa, South Sudan, Zambia, Uganda, the Democratic Republic of Congo, and Tanzania, pointing unmistakably to a cross-border criminal network of considerable reach.

Experts note that criminal networks have become adept at exploiting three perennial weaknesses: tax exemption regimes susceptible to document fraud, insider collusion within customs and port agencies, and the sheer volume of containerised traffic that makes 100 percent physical verification practically impossible without intelligence-led targeting.

Forged passports are used to falsely qualify for tax waivers. Bribery within clearance chains enables goods to slip through systems that are, on paper, robust.

INTERPOL AND THE TRANSNATIONAL DIMENSION

The involvement of Interpol in the Maina investigation has elevated the case beyond a domestic enforcement action. Investigators now believe the syndicate may have international supply chain linkages that could require coordinated cross-border arrest operations and asset tracing across multiple jurisdictions.

Maina’s dual citizenship and the American origin of the seized container give the case a transnational texture that domestic law enforcement alone is ill-equipped to untangle.

If charges are eventually laid and proven, the suspects face exposure under multiple legal frameworks, including the East African Community Customs Management Act, Kenya’s Tax Procedures Act, and potentially the Proceeds of Crime and Anti-Money Laundering Act.

International dimensions of the offence could trigger extradition proceedings, a realistic prospect given the United States’ robust bilateral law enforcement cooperation agreements with Kenya. Organised crime and trafficking offences of this nature carry penalties that can include substantial custodial terms.

KRA’S INSTITUTIONAL OVERHAUL

The back-to-back scandals have arrived at a particularly uncomfortable moment for the KRA, which has been projecting an image of aggressive modernisation and enforcement capacity.

The taxman recently appointed Mohamed Abdul M’maka, a former field intelligence officer and troop commander in the Kenya Defence Forces with more than two decades of experience in intelligence and security, as the new Commissioner for Investigations and Enforcement. M’maka, who had been serving as chief manager for intelligence collection since August 2025, was brought in specifically to tighten the fight against tax evasion, smuggling, and revenue leakage.

The authority is also procuring an Intelligence Analysis Tool to function as a centralised intelligence repository for its Investigations and Enforcement Department, enabling agents to collect, store, and analyse large volumes of data drawn from multiple sources including social media, government registries, and partner agencies. The Business Registration Service is already supplying data that allows KRA officials to track company ownership, directorship structures, and registration histories. The system is intended to help tax detectives build advanced taxpayer profiles and identify fraud patterns before they escalate to the scale seen at Mombasa.

The internal graft numbers tell their own story. According to KRA records, seven employees were dismissed for corruption-related offences in the first quarter of the 2023/24 financial year, rising to nine in the second quarter. By the first quarter of 2024/25, that figure had leapt to 25, before falling slightly to 19 in the second quarter. The trend suggests either that the problem is growing or that the KRA’s capacity to detect and act on it has sharpened considerably. Probably both.

SYSTEMIC QUESTIONS THE SCANDAL CANNOT AVOID

The Maina case and the Mombasa port crackdown together raise a set of questions that Kenya’s customs and revenue authorities will struggle to deflect. How many similar containers have passed through the Compact SEZ or the Port of Mombasa under equally irregular circumstances without triggering an internal whistleblower? How deep does the KRA verification department’s exposure to organised criminal networks actually run? And critically, if a dual citizen operating a logistics company on social media could apparently coordinate the importation, internal clearance, and Nairobi-bound distribution of a container of contraband goods with the assistance of senior verification officials, what does that say about the state of integrity within one of Kenya’s most consequential revenue institutions?

The DCI, Interpol, and KRA’s own Investigations and Enforcement Department are now working through those questions. Whether the answers, when they come, will be limited to Peter Mwaniki Maina and his wife, or whether they will reach further into the bureaucratic structures that gave the scheme its operational space, is the question that will determine the real significance of this investigation. In Nairobi’s legal and enforcement circles, the betting is that the names already known are merely the surface of something considerably deeper.

The most dangerous revelation to emerge from the arrest of former Cabinet Secretary Raphael Tuju on Monday was not that the DCI believes he faked his own disappearance.

It was the casual, almost incidental manner in which DCI Director Mohammed Amin disclosed that investigators had obtained precise, timestamped phone location data on a sitting Kenyan citizen — within hours of a missing person report — without producing a single piece of paper showing a court had authorised it.

That disclosure, buried inside a press briefing designed to humiliate Tuju, has detonated a far larger conversation about Safaricom’s role as what critics are now openly calling the intelligence arm of the Kenyan state — a company that tracks, traces and hands over subscriber data to security agencies on demand, constitution and data protection law notwithstanding.

By Monday evening, the debate had acquired a human face: Tuju, a man who underwent spinal surgery in 2020 with metal plates inserted into his vertebrae, was sitting on a plastic chair inside Karen Police Station in visible agony.

Doctors from Karen Hospital were crouched around him. His lawyers said officers had been given strict orders from above not to allow him to be transferred to a proper medical facility.

Outside the gate, Wiper Patriotic Front leader Kalonzo Musyoka, former Attorney General Justin Muturi, DAP-K leader Eugene Wamalwa, Senator Dan Maanzo and constitutional scholar PLO Lumumba had planted themselves and were not moving.

WHAT THE DCI REVEALED — AND WHAT HE DID NOT

Amin’s press briefing was intended to be a moment of institutional triumph. Instead it handed Tuju’s lawyers, the Law Society of Kenya, and privacy campaigners the single most incriminating public statement yet made by a Kenyan security chief about the telco-state surveillance pipeline.

Standing before cameras at DCI headquarters, Amin announced that forensic analysis had established, without an iota of doubt, that Tuju had never left his Mwitu Drive Karen residence during the entire period of his reported disappearance. Investigators knew, the DCI boss said, that Tuju’s phone was switched off at exactly 18:18 hours on Saturday, March 21 — and that at the moment it went dark, the device was inside his compound.

That is not information a police officer deduces from observation. That is telecommunications data: call detail records and cell tower triangulation, held exclusively by Safaricom as the network operator, tied to Tuju’s registered SIM. Obtaining it in real time, within hours of a missing person report being filed, requires — under Section 31 of Kenya’s Data Protection Act and Article 31 of the Constitution — a court order or equivalent judicial authorisation. Amin mentioned no such order. None has been produced. None has been shown to Tuju’s legal team. None has been cited in any subsequent police document.

Safaricom did not issue a statement. It has not been asked by any official body to explain the basis on which it released the data. The Office of the Data Protection Commissioner, which has jurisdiction over exactly this type of alleged breach, had also not commented as of Monday evening.

‘DCI-SAFARICOM AXIS OF EVIL’

On X, hundreds of posts made the connection within minutes of Amin’s briefing airing on Citizen TV. One widely shared post stated: “DCI chief confirming that Safaricom gave them all access to track, trace, dox and geolocate Tuju’s phone number, including the exact time it was switched off. DCI didn’t get a court order. DCI-Safaricom axis of evil.” Another, rephrasing the legal concern in starker terms, read: “What the DCI is conveying is that Safaricom, without authorisation from Tuju, provided Tuju’s private information to the DCI to track his whereabouts. Safaricom is a government entity that is putting vulnerable Kenyan citizens at risk.”

Legal observers pointed out a detail that sharpened the concern considerably: Amin stated that investigators had simultaneously sought a court-sanctioned search warrant to enter Tuju’s compound after the family denied them access. That warrant application confirms investigators knew they needed judicial authority to enter a building. They appear to have formed no equivalent view about obtaining the telecommunications data that told them what was inside it.

THE COURTS HAVE ALREADY HEARD THIS STORY

The Tuju case has arrived at the worst possible moment for Safaricom’s public position. Its long-standing assurance that subscriber data is only released on receipt of a valid court order has been contradicted, in open court, by one of its own employees.

In February 2026, Moi University student David Ooga Mokaya was acquitted by Nairobi magistrate Caroline Nyaguthi after a Safaricom employee, Daniel Hamisi, testified that a senior DCI officer, Michael K. Sang, had obtained Mokaya’s subscriber details, call records and precise location data in November 2024 by writing a letter. No court order.

When defence counsel Ian Mutiso asked the DCI officer whether he knew judicial authorisation was required, the officer admitted he did not know. Mokaya, whose life was effectively derailed by a prosecution built on unlawfully obtained data, is now suing Safaricom for Sh200 million in damages. A High Court restraining order bars the telco from sharing his data further, with the matter set for mention on March 30.

The Law Society of Kenya last week moved to scale that individual case into a systemic constitutional reckoning. Its petition, filed in the Milimani Constitutional and Human Rights Division, names Safaricom, the DCI, the Inspector General of Police, the DPP, the National Forensic Lab and Kenya Power as respondents.

The LSK alleges an organised conspiracy to illegally surveil Kenyan citizens, drawing a direct line from Mokaya’s case to the mass surveillance of Gen-Z protesters during the 2024 demonstrations. The petition demands a court-supervised audit of every data request the DCI made to Safaricom between June 2024 and December 2025, a formal apology published in national newspapers for fourteen consecutive days, the expungement of charges against anyone prosecuted on illegally obtained data, and the establishment of a Victims Compensation Fund.

Earlier investigations by human rights organisations had alleged that Safaricom maintained a near-real-time backend access arrangement with security agencies, and that this pipeline had been linked directly to enforced disappearances and extrajudicial killings.

Safaricom has never publicly addressed those specific allegations. On Monday, March 24 — the same day Tuju was arrested on the basis of data its network provided — the company quietly announced a new privacy initiative to partially mask phone numbers in M-Pesa transactions as a gesture toward data minimisation. The timing struck most Kenyans following the story as staggering.

THEN THEY BEAT HIM

Tuju had agreed to present himself at Karen Police Station voluntarily, with Kalonzo driving him there personally. What unfolded after his arrival is contested in its characterisation but documented in its consequences.

Lawyer Ndegwa Njiru told journalists that officers moved to force Tuju into a waiting Subaru before a single entry had been made in the Occurrence Book and before any charge had been communicated to the defence. “Even before he started going into the OB, they started pushing him into a Subaru,” Njiru said. “That was not an arrest. Were it not for our presence, we would have been talking about something else. That was serious violence.”

The violence struck directly at a catastrophic pre-existing injury. Tuju underwent spinal surgery in 2020 following a near-fatal road accident; metal plates were inserted into his vertebrae during the procedure. A doctor at the scene told officers that three discs had been affected by the way he was handled during the arrest and that moving him without a full medical assessment risked gravely worsening his condition. He required a stretcher. He was instead kept on a plastic chair inside the station. His blood sugar levels, sources said by Monday evening, were fluctuating. His overall condition was described as deteriorating.

Kalonzo did not mince words. “I personally drove him to Karen Police Station to record a statement in good faith, in the spirit of due process. What followed was unacceptable. Tuju was carried away in a manner that no Kenyan, indeed no human being, should ever experience,” he said. When asked why a man with documented spinal injuries and worsening vital signs could not be transferred to hospital, a senior police officer at the station delivered the answer that has since been shared across social media thousands of times: “This is a matter under orders from above. We are following instructions and cannot release him at this time.”

SECTION 129: THE CHARGE BEING READIED

If prosecutors proceed, the charge will be brought under Section 129 of the Penal Code, which makes it a misdemeanour — punishable by up to three years in prison — to give a public officer information one knows or believes to be false. To secure a conviction, the state must prove that the information Tuju provided was false, that he knew or believed it to be false when he gave it, and that it caused officers to act on it. The DCI has already established the third limb: plainclothes detectives were deployed, forensic teams were mobilised, and a court-sanctioned search warrant was sought — all triggered by the family’s missing person report.

Tuju’s defence dismantles the first two. He reported a genuine threat to his safety at Karen Police Station on Friday, March 20, the day before his disappearance, logging it under OB 21/21/03/2026.

He told reporters the same unregistered white Toyota Land Cruiser 70 Series he had reported on Friday reappeared behind him on Saturday evening as he was heading to record a Ramogi FM interview. He turned onto Nandi Road, lost the tail, abandoned his vehicle on Miotoni Lane, and sought shelter with a family near the Karen-Kiambu border. “I want to thank a family in Kiambu who gave me shelter,” he told journalists.

“They did not care about my tribe. They simply saw me as a human being.” If that account is supported by the family who sheltered him, by CCTV footage from Karen’s roads, or by any corroboration of the vehicle he described, the false-information charge does not survive.

Amin posed a question intended to undermine Tuju’s account: “Why would a mother whose husband has disappeared for the last couple of hours fail to cooperate with the police and share whatever information she had with the investigating officers?” It is a question that cuts both ways. If the family knew Tuju was safe inside the house throughout, their refusal to admit police is inexplicable. If they genuinely did not know where he was, their caution about admitting armed officers in the middle of the night into a home that had already been forcibly entered by over a hundred people ten days earlier is rather easier to understand.

THE PROPERTY SIEGE THAT PRECEDED EVERYTHING

Understanding the full weight of what happened on Monday requires understanding what happened on March 14. On that morning, more than a hundred people arrived before dawn at Dari Business Park in Karen — the property at the centre of Tuju’s decade-long debt dispute with the East African Development Bank.

Some came on motorbikes. The officers who accompanied them covered their faces and, according to Tuju, carried no visible court documentation. Everyone on the premises was evicted. Tuju broadcast the scene live from outside his own gate.

That eviction was the enforcement of an October 2024 auction that sold Dari Business Park and Tamarind Karen to Ultra Eureka Limited, a company controlled by Stabex International chairman Jackson Kiplimo Chebett, for Sh450 million. Tuju has valued the 6.8-acre estate at Sh3.5 billion. The sale resolved a debt that began as a USD 9.1 million loan in 2015, grew to USD 15.1 million by an English High Court judgment in 2019, and has been upheld by every Kenyan court since. On March 9, Justice J.W.W. Mong’are struck out Tuju’s final amended plaint as res judicata, lifted all remaining interim orders, and cleared the way for Ultra Eureka to enforce its title. He filed his police report about being followed five days later. He disappeared ten days after the eviction.

The DCI says the chronology is suspicious. Tuju’s lawyers say it is explanatory.

THE QUESTIONS THAT WILL OUTLAST THIS CASE

Whether Tuju is charged, acquitted, or released without prosecution, Monday has left three questions embedded in Kenya’s public life that will not be dislodged by any single court outcome. The first and most consequential is whether Safaricom is functioning as a real-time intelligence asset for the Kenyan state, releasing location data to the DCI on the basis of written requests alone, in systematic violation of the Data Protection Act, the Constitution, and the rights of every subscriber on its network.

The second is whether the Office of the Data Protection Commissioner — an institution that has shown a new willingness to act in minor commercial cases — has the independence, the resources, and the political protection to pursue that question against the country’s most powerful private company. The third is whether a citizen who presents himself voluntarily to record a statement can be kept in a police station, denied hospital access, denied a formal charge, and held under pain on instructions from unnamed officials above, without any of the legal safeguards the Constitution guarantees.

As this edition went to press, Tuju was still at Karen Police Station. Kalonzo was still at the gate. The doctors were still inside. No charge had been read. No court order authorising the telecommunications data had been produced.

And on X, the same question was being asked — about Tuju, about Mokaya, about the Gen-Z protesters, about everyone whose movements have been mapped and monetised by a system that the Data Protection Act was written to restrain: who gave Safaricom permission to hand over this man’s life, and when?