It was reprieve for Julius Wambua who was serving a life sentence, after his daughter allegedly framed him in a defilement case eight years ago, when the court quashed his conviction.
Justice George Odunga quashed the ruling of the Kithimani magistrate Court and the subsequent proceedings at the High court. The judge ordered for a retrial if the Director of Public Prosecutions finds it viable considering the amount of public interest the case has generated.
Odunga released Wambua on a cash bail of 30,000 shillings and an alternative bond of 200,000 shillings with a surety of similar amount pending retrial.
“The petitioner’s appeal has been considered and determined that he was accused by someone who was coached and wasn’t her own words, therefore justice must be rendered. Pw2 and Pw3 were coerced and threatened by their mother and police so as to implicate the accused over incest and coached on what to say in court. Justice didn’t happen at the time of trial since Pw2 was a minor and was under coercion by the mother” stated Odunga.
Principal magistrate A.W. Mwangi had in January 2012 sentenced Wambua to life in jail after finding him guilty of defilement.
The sexual assault incident, as was told to the court, happened at the suspect’s home in Mamba Sub-Location in Yatta, Machakos County in April 2011.
Wednesday’s ruling was a culmination of events that began in 2019 after his accuser confessed to have framed her father under instructions from the mother and subsequently filed submissions at the Machakos High Court recanting her original testimonies.
The Kenya National Commission on Human Rights would take up the matter seeking the court’s intervention to have Wambua set free under petition 42 of 2019.
The move to have his sentencing reviewed was the second after an appeal against his sentencing was dismissed by the Court of Appeal in May 2019.
A three-judge bench comprising of judges William Ouko, Wanjiru Karanja and Jamila Mohamed had declined the application on the basis that the request was time-barred and that the court-set timelines for filing and producing evidence had already lapsed.
Authorities in South Sudan have suddenly agreed to pay a company associated with the former Lugari Mp Cyrus Jirongo Sh4.9 billion after a case was heard and determined in Arusha, Tanzania.
The company associated with the controversial politician was hired to construct South Sudan People’s Liberation Army but the debt had delayed for over ten years.
The works to build Dr John Garang Memorial Military Academy, 4 warehouses and fuel depots kicked off in 2007 and were completed in 2011 with a pending debt of US$18.6 million but the interests have since accumulated to US$49.3 million (Sh4.9billion).
Jirongo who has been making news of going broke was represented by MS Semuyaba, Iga Advocates from Kampala along with Lumumba and Lumumba Advocates from Kenya.
A Chinese firm Yu Sung Construction Limited was also part of the team that had dragged the government of South Sudan to the Arusha based court in November 2019 to pay the decade long debt.
“We have a pleasure to kindly request your honorable court to file a consent order of the payment of US $49,398,473.91 in four installments,” read part of the demand.
But SPLA terminated the contract with Yu Sung in September 2011, just two months after South Sudan became a nation when the debt still stood at USD 18,609,595 after attracting an interest of USD2,791,439 per annum.
Lead lawyers were persuading presiding Justice Munica Mugeyi who issued conservatory orders to freeze and settle the debt where money would be put in a winning account until the case is determined.
Munica’s orders affected more than 20 crude oil cargos from the South Sudan, construction of Natinga Warehouses and Dr Garang Memorial Military Academy.
This was after South Sudan changed the construction sites claiming that locals had staged demos to protest the works.
“The SPLA authorities chose Kurmork, which unfortunately proved to be prone to flooding after foundations had been laid and some buildings already at an advanced stage, according to the submission.
“The project owners chose a third site in Mangalla country near Juba-Bor Highway which also came to be prone to flooding of the Nile and the project was moved to Suleng, 75 kilometres away in the northeast of the capital Juba”.
A meeting chaired by Brig General Abuol Deng and Brig Gen James Hakim Elia held in 2011 wanted the contract to be reviewed but the idea was later rubbished and Yu Sung while South Sudan still owed them more than US$ 18 million.
By September 2020 debt had accumulated to over US$49.3 million by and the South Sudan government acknowledged the fact that the ministry of Defence and Veterans Affairs entered into contracts with Yu Sung on different dates for construction of facilities, which were later defaulted.
“Recognising the fact that the failure and default of the respondent to uphold the contractual obligations it signed with the applicant may complicate the matter much more should the court’s proceedings be the only option left to the parties to follow,” Athian Ding Athian wrote.
Mr. Athian who is the minister for Finance and Planning of South Sudan made the commitment on the payment to Jirongo in a letter dated 26 November 2020.
Many senior military officials from South Sudan steal from government and hide their loots in Kenya which has become their safe haven.
One thing that has become apparent in the appearances by directors of firms that one scandalous Kemsa tenders is the procurement process was majorly flawed. We’ve been treated to telemundo stories how a mysterious passerby walked into the Kemsa offices and won multi million tender to supply COVID-19 equipment.
A company that deals in cereals supplied medical equipment worth Sh167 million to Kenya Medical Supplies Authority (Kemsa).
Appearing before the Senate Health committee yesterday, senior managers of Briema Grains Stores Ltd were hard-pressed to explain the firm’s engagement with Kemsa, having not had prior pre-qualification of tenders before the Covid-19 pandemic.
The shadowy company jumped from cereals to pharmaceuticals in a flash and mysteriously landed a lucrative deal with Kemsa to supply 200,000 KN95 masks at a cost of Sh700 each and 6,000 surgical masks (3-ply) pieces at a cost of Sh4,500
From all the ridiculous stories, it had also became apparent that the lucrative were largely lobbied, influenced and awarded to politicians and those in high connections either directly or through proxies.
While appearing before the committee, Lapsset chairman Titus Ibui and a senior member of the Mt Kenya Foundation (that has been fundraising for jubilee campaigns in the last two elections) and whose firm Bell Industries won a Sh185M tender to supply Kemsa with PPE at a negotiated price of Sh8,500 per pair and thermal guns at the same price, shamelessly admitted the process was flawed but still went ahead with it.
Ibui told the committee that he has been doing business with Kemsa since 2015 and realized the 2020 procurement didn’t follow the standard procedure.
“I knew that the procedure was being done against the law. But it is not for the supplier to follow the law. That was the duty of Kemsa,” he said.
Shouldn’t his admission to playing part in an illegal process involving public funds be read a plead of guilt since it didn’t subject the process to openness and accountability. He intentionally played part in a criminal act by going through the illegal procurement process. Also as a chairman of a parastatal doesn’t it create a conflict of interest indulging in doing business with the government?
If the committee’s appearances are anything to go by then it would be a sabotage for justice if the open flawed lines are left untouched and cartels allowed to walk out free to scheme for the next catch.
In what was bound to happen, Energy and Petroleum Regulatory Authority (Epra) Director-General Pavel Oimeke has been dismissed from office following bribery allegations instead his position has been taken over by Mr Daniel Kiptoo Bargoria, Ministry of Energy’s legal advisor who’ll now serve on acting position pending the board’s decision.
Mr Oimeke was arrested by EACC detectives on Thursday last week on allegations of collecting a Sh200,000 bribe from an employee of a fuel station in Oyugis in order to facilitate it’s re-opening. He would then spend a night in the basement cells before being released on bond pending investigations. He’s expected to be arraigned in court.
Oimeke survived many hurdles in the energy but forgot that he was a human but not a cat with nine lives, the man who got one of the most prestigious jobs in the land let greed get on his way to lose it all for meager Sh200K which is not even half his monthly salary not to mention the magnificent benefits he enjoyed by virtue of office.
The renewable energy expert made a comeback at Epra in October after close to two months in the cold and in court corridors battling a petition that had been filed to oppose his reappointment after his first term ended in July.
The petition was a second one, the first having collapsed after the petitioner withdrew it.
The second petitioner, Mr Emmanuel Wanjala, alleged in the petition that Epra had witnessed massive losses due to spillages, installation of faulty meters, increased court cases against the authority by former employees who were dismissed for pointing out wrongdoings or mismanagement of resources and abuse of office.
Tribalism
Through his lawyer Henry Kurauka, he accused Mr Oimeke of abuse of office, mismanagement of a public institution and public resources, corruption, tribalism and favouritism.
He wanted his reappointment blocked for not being a member of a relevant professional body as clearly stipulated under section 13(3)(e) of the Energy Act.
The Ethics and Anti-Corruption Commission (EACC) had been enjoined in the case with a view of compelling the agency to investigate the claims.
A court order issued by Justice Hellen Wasilwa stopped the regulator’s board chaired by retired Supreme Court judge Justice Jackton Ojwang’ from renewing Mr Oimeke’s term, leading to his suspension in mid-August.
It didn’t last long. On October 9, Justice Wasilwa dismissed the case that had also sought to enjoin the EACC, for lack of evidence on the allegations, leading to Mr Oimeke’s return to Epra, where the corporation secretary/director of legal affairs Mueni Mutung’a had been appointed in acting capacity.
His short suspension almost split the Epra board, which had made the decision to push him out pending the conclusion of the court case.
In fact, a board member swore an affidavit to support his defence in court.
Mr Samuel Maugo told the judge that Oimeke had been rightfully appointed and confirmed by the Energy CS Charles Keter in May, long before the petition came up.
EACC, which was enjoined in the case to investigate him, also denied having received any complaints to warrant his probe, leaving Justice Wasilwa with no option but to dismiss the petition and order for Mr Oimeke’s reinstatement into office.
Confiscated gas cylinders
Several allegations have emerged before during his tenure but there has not been any prove. The petitioner had alleged in court that Mr Oimeke had opened an illegal holding yard for confiscated cooking gas cylinders and trucks to extort suspects into bribing before their assets were released.
Just before his first term ended in July, the regulator was on the spot after it emerged that there had been an error in the fuel pump price calculation leading to a huge jump in prices in August.
The energy regulator had failed to correctly compute the prices in the June/July pricing, an error whose correction in the July/August fuel price caused a massive hike in pump prices.
Mr Oimeke, who at first admitted to some adjustments in the prices after oil marketing companies had “misunderstood’ the taxation law, an error that was passed through to the pump pricing, later denied the report.
When history books shall be written, Oimeke like his physical attributes will be short. A disgrace.
A Nigerian businessman arrested with Sh100 million at the Jomo Kenyatta International Airport wants back his seized money.
The Nigerian, who was on transit to Dubai when he was nabbed at JKIA said he had declared the money back in Lagos and was cleared by customs officials.
“On the question of non-declaration of funds at customs. I wish to state I was a passenger on transit to Dubai from Lagos Nigeria. “At Murtala Mohammed International Airport, I declared the currency and I was cleared by the customs to travel. I checked in the consignment and as is the usual norm in international travels, my next declaration point ordinary would have been Dubai International Airport,” Mauzu Bala said.
In reply to an application by a state agency, Muazu Bala has accused Assets Recovery Agency for failing to make full disclosure to the court when the order was issued.
In his court documents, Bala claims that the information given by ARA was not accurate and was intentionally meant to mislead the court.
“I pray that the orders granted be set aside and the court replaces the same with an order directing the money in question be released, ” Bala said.
He claims that the Agency filed two applications before the High Court without informing the Magistrate court sitting at JKIA that they had filed application seeking to seize and preserve his money and a ruling was pending.
In a sworn affidavit, Bala says he was on transit to Dubai and had been cleared by Nigeria customs at Murtala Mohammed International Airport.
He claims during the layover at JKIA officials, not from customs department, who claimed to be police came calling.
He added that he was surprised Kenya Airways which cleared him at Lagos travel aboard their aircraft with “undeclared currency” pounced on him in Nairobi with the intention to deprive him of his money.
He further said during his detention and interrogation, they could not communicate properly due to the language barrier. The officials, he said, confiscated all his documents.
He adds that it is disturbing and surprising how someone knew he had checked in with money yet he had not disclosed the information to anyone apart from Nigerian custom officials.
The Nigerian said it is unethical that some people went through the luggage of all passengers during the layover, contrary to regulation and international practice.
The Director of Public Prosecution (DPP) Monday appealed a decision by the court to acquit Humphrey Kariuki and 7 others over tax evasion charges amounting to Ksh 7.4 million.
In his appeal against a ruling delivered on the 8th of December by Principal Magistrate Kenneth Cheruiyot, the DPP argues that section 202 of the Constitution which was used in the ruling could not apply because the Magistrate misdirected himself in law.
“The learned Magistrate misled himself in law by acquitting all the accused persons under section 202 of the Criminal Procedure Code CAP 75 whilst the DPP was present in court and one prosecution witness thus the provisions of section 202 could not apply in the circumstances,” the petition read in part.
The DPP in the petition also faults the acquittal saying the Magistrate erred in law by failing to deliver a ruling on the merits of the application for the file to be placed before Chief Magistrate Francis Andayi for purposes of the making of an application for consolidation as prayed for by the prosecution.
The petition further faults the Magistrate for alleged errors in law and facts by reserving the matter for ruling at 11.00 am on the 7th of December and failing to deliver the same at the appointed time without giving any reasons for such failure.
The petition by the DPP came after the court acquitted the businessman and 7 others under section 202 of the constitution.
Principal Magistrate Cheruiyot in his ruling said the DPP was not ready to present witnesses even after been given three days to do so.
The DPP had earlier made an application seeking to have the matter adjourned to allow him to consolidate all the three files the businessman is facing before the court.
In his application, the DPP said his decision was advised by the fact that witnesses and exhibits are the same in all the three matters.
The DPP applied to have one of the tax-related cases before Senior Principal Magistrate Kennedy Cheruiyot mentioned before Chief Magistrate Francis Andayi for consolidation.
The businessman is facing three cases of tax evasion amounting to Ksh. 41 billion.
The other cases are on possession of unaccustomed goods and fake custom receipts.
In the case, Humphrey Kariuki, Stuart Gerald Herd, Peter Njenga Kuria, Robert Thinji, Kefa Gakure and Eric Mulwa are facing various charges including being in possession of unaccustomed goods.
Kariuki, alongside other senior staff of the company, were charged with nine counts relating to tax evasion.
While sanctioning their prosecution, the DPP said that an audit by KRA revealed that Africa Spirits Limited/WOW Beverages Limited had evaded the payment of tax between 2014 and 2019 amounting to Ksh 41 billion.
Hackers apparently got into computers at the U.S. Treasury Department and possibly other federal agencies, touching off a government response involving the National Security Council.
Security Council spokesperson John Ullyot said Sunday that the government is aware of reports about the hacks. “We are taking all necessary steps to identify and remedy any possible issues related to this situation,” he wrote in an email.
Reuters reported Sunday that a group backed by a foreign government stole information from Treasury and a Commerce Department agency responsible for deciding internet and telecommunications policy. Intelligence agencies are reportedly concerned that other agencies were hacked using similar tools.
The Treasury Department deferred comment to the National Security Council.
Betting firm MozzartBet is in the spotlight after a State agency questioned the source of more than Sh600 million the company had wired to a businessman’s bank accounts in a span of five months.
In court documents, the Assets Recovery Agency has flagged the transactions as suspicious, questioning the source of Sh640 million that the betting firm wired to Kimaco Connections between February and August.
This indicates that the agency believes the money was not generated from gambling activities under MozzartBet, which operates in a sector that has recently come under increased scrutiny from the State.
The ARA, which is seeking to seize and forfeit the cash to the State, has dismissed MozzartBet’s explanation that it paid the money to acquire from Kimaco Connections a software, which the latter subcontracted another firm — Open Skies Management Services, —to deliver.
Peter Kiilu, the owner of Kimaco Connections, allegedly wired Sh242 million to Open Skies Management Services, which is owned by Zimbabwean Emmanuel Charumbira and a shareholder of Mozzartbet.
The agency says that the unclear source and wiring of the cash to a web of accounts, including some owned by MozzartBet, point to a money laundering scheme.
“That Mr Peter Kiilu did not avail the agreement or contracts he alluded to in his recorded statement between Mozzartbet Kenya Ltd and Kimaco Connections and Kimaco Connections and Open Skies Management Services,” the ARA sys in court documents.
Court filings show that MozzartBet used its pay bill number 290059 to wire the millions through another pay bill number 311372 associated with Kimaco Connections to its pay bill 311372.
The highest amount sent was Sh50 million in a single day while the lowest was Sh1.8 million. The ARA says that MozzartBet sent a total Sh256 million within five days to Kimaco Connections, flagging the funds as suspicious. The funds were later moved to an account at Co-operative Bank.
From the account, Mr Kiilu moved Sh150 million to a fixed deposit account and left a balance of Sh101 million.
The company had between February and June received Sh384 million from the betting firm, pushing receipts from Mozzartbet to Sh640 million over five months.
Some of the money was also wired to Pescom and Power Energy in transfers that were marked by intra-accounts trading. The agency says in court documents that the use of mobile money transfer services to transfer funds from MozzartBet and Kimaco Connections was adopted to circumvent or evade the reporting threshold and Central Bank of Kenya prudential guidelines requiring an account holder to declare the source of funds.
“Preliminary investigations have established that the respondents through its directors, representatives or agents were involved in a complex scheme of money laundering activities involving several entities and companies,” said Stephen Githinji, a prosecutor attached to ARA.
The agency alleges that the monies were later distributed to various companies associated with directors and shareholders of the betting firm.
It says that investigations showed that shareholders of MozzartBet Kenya Ltd are Loncar Koviljka, a Serbian, Zimbabwean Charumbira and Musa Sirma, a former MP.
Mr Charumbira is a director of both MozzartBet Africa and Open Skies Connections, the firm that was allegedly sub-contracted to supply the software.
The betting companies now join the growing list of non-financial institutions such as casinos, real estate agencies and consulting accounting firms that are required to report suspect transactions to the Betting Control and Licensing Board (BCLB).
However, the law does not require betting firms to report the suspect transactions to the Financial Reporting Centre (FRC)—which is mandated to track illicit cash.
Executives of betting firms reckon that criminals can feed their illicit money into their betting wallets, bet a small share of the cash before cashing out with vast majority of the cash.
Online sports betting companies had grown rapidly in recent years, riding a wave of enthusiasm for sports, before the government started a crackdown on their operations.
Licences of more than 15 betting firms were not renewed, especially due to fresh demands for taxes, triggering court fights with firms like SportPesa and Betin.
Alego Central MCA Leornard Oriaro has raised a red flag after learnt that most of the recently released Siaya county bursaries are benefiting ghost students.
He said the county government of Siaya will lose millions of shillings meant to benefit bright but needy students if Governor Cornel Rasanga’s is left to fraudulently distribute the funds.
Oriaro noted that hundreds of students who were legible to benefit from the bursary have been locked out through a scheme that is carefully crafted to block those who sat sat for KCSE and those who completed college last year.
Rasanga’s administration has rolled out the the unfair despite many needy students who sat for examinations in 2019 having their certificates detained in various institutions for nonpayment of fees.
The MCA faulted the argument that the money was meant for those in Form Four this year. He categorically stated that the beneficiaries were in Form Three last year when the list was compiled.
Oriaro further clarified that all bursary applications are done by November after which the applications are compiled and sent to the education office for processing.
The MCA insisted that the just-released bursary is for the 2019/2020 financial year and therefore must cater for the beneficiaries who were in Form Four or in their final years in college last year.
He challenged the controversial Siaya Governor Cornel Rasanga to come out and clear the air over the impasse that has seen destitute children denied certificates by various institutions.
Oriaro added that the people of Siaya have not forgotten the 2018/2019 bursary wreck where the county lost Sh74 million that has not been accounted for to date.
Alego Central MCA Leornard Oriaro. He also claims Rasanga has threatened to take his life [p/courtesy]Governor Rasanga released a Sh30, 785, 000 bursary with claims that it would benefit Form Fours and students in tertiary education who currently back in schools.
The revelation comes after Siaya Speaker George Okode on Wednesday announced that Ethics and Anti-Corruption Commission (EACC) officers will now be part of the interrogation team to grill county government officials appearing before the county assemblies to answer audit queries.
The speaker’s move is a shift from the past when county executive committee member and chief officers would appear before the county assembly public accounts committee members alone.
Okode whose move is to insulate Rasanga from investigations called on the County Executive and their chief officers to ensure due diligence in the execution of their work to avoid audit questions.
“A time like this when we are starring at transition, we do not want a future where people who have served this country with honour for the longest time to be called to answer audit questions,” he said.
Rasanga on his part lamented that governors have been subjected to bear the bad image whenever improprieties and audit queries are raised in their counties.
Governor Rasanga is said to be considering to oust MP Samuel Atandi of Alego Usonga in 2022 with hopes of featuring in the next regime as a minister if BBI sails through.
An account of how an “innocent passer-by” landed a Sh180 million tender for the supply of Personal Protective Equipment (PPEs), yesterday exposed the extent to which mandarins at the premier medical supplies agency dished out tenders to Covid tenderpreneurs in total disregard to procurement processes.
Testifying before a House committee, James Njuguna, a director of La Miguela Holdings Limited, narrated how he got the tender by sheer luck.
Appearing before the National Assembly’s Public Investments Committee (PIC) probing the expenditure of money in the purchase of the Covid related equipment, the businessman said he happened to be passing by the authority headquarters where he spotted many people lining up and became curious as to what taking place.
Lucrative tender
“I went straight to the receptionist who advised me not to waste time and apply for the tenders which were being flaunted.
I quickly penned off a two-sentence letter and after two hours I was told I had succeeded and asked to collect the commitment letter from the Chief executive officer’s office,” Njuguna recounted.
Asked by the committee chairman Abdulswamad Nassir (Mvita), whether he had ever done business with the agency before to warrant such a lucrative tender, Njuguna said he had supplied fire equipment worth Sh400,000 in the past.
Members sought to know how he won the Sh180 million tender having done “small” business with the agency.
“During the time I had a friend who was suffering from Covid, I felt for him and when I heard there was an opportunity to supply equipment to help such people I could not turn it down,” Njuguna said.
The businessman could however not explain why he bypassed all the procurement processes to win the tender.
“Things happened very first, I was acting as directed. There were many people seeking the tenders and therefore one could not question the process at the time,” explained Njuguna.
He added: “The tenders were being issued to address an emergency and hence no need to go through the tedious process as time was running out, the country had been hit by a pandemic.”
It also emerged during yesterday’s sitting that the Registrar of Companies failed to give the names of the shareholders of one of the companies involved in the scam.
Nassir told members that in the report the registrar did not include the names of the owners of Kilig Limited which was at the centre of the scandal.
“It defeats logic for the registrar to give names of some individuals and leave others.
The committee has decided to summon the Registrar of Companies for an explaination,” Nassir directed.
During the hearing one of Kilig Director Ivy Minyow was hard pressed to explain how her company was awarded a tender despite having been registered months before the flaunting of the same.
Huge amount
Minyow, 27, said her company was granted the tender to supply PPEs samples worth Sh9 million, which it duly complied. And was awarded a subsequent Sh4 billion tender.
Yesterday, MPs sought to know why the company supplied samples worth such a huge amount.
“We were too optimistic after Kemsa honoured our request and could not hesitate to provide the samples,” Minyow said.
Nassir said that other companies that failed to honour the invite will now be summoned to appear.
They include Nanopay Limited, Shop N’ Buy and Wallabis Ventures Limited. Directors of Megascope and Crown Healthcare Ltd who sent representatives to appear were ordered to appear in person next week.
Ruaraka MP Tom Kajwang differed with Minyow when she said her company was indeed paid for the samples.
“You cannot deceive the committee that these were samples when they were paid for,” Kajwang told Minyow.
The Kenyan drug barons jailed in the U.S are lonely in prison after being abandoned by family, friends and legal team since their sentencing to over two decades in prison.
Baktash and Ibrahim Akasha were sentenced to 25 years and 23 years in jail respectively by the US courts in 2019.
Since their sentencing, even the Kenyan High Commission in America that is expected to check on the barons who are its citizens has not been able to show love just like Kenyans living in America.
The embassy officials were last seen during court proceedings when they only took notes and filed reports back at home.
But gone are the days when Akashas used to dine with prominent Kenyan legal minds, politicians and senior civil servants whom they bribed to remain at large and frustrate extradition to New York.
The guilty barons who are now serving their lonely and lengthy jail terms in a foreign land have never been visited by any family members, friends, or the corrupt Kenyan officials who fear that US authorities will nab them for being accomplices in their heinous acts.
The two who were drug traffickers and murderers are serving their terms in a country that is worst hit by the Covid-19 pandemic. People catch it and die in crowded prisons.
Baktash is imprisoned in the state of Louisiana where eight prisoners have died from covid-19 while Ibrahim is detained in Brooklyn, New York City, in a facility where five prisoners have succumbed to the virus.
Court records show that Baktash will be freed on May 21,2038 while Ibrahim will come out a little earlier on September 5, 2036 after the two pleaded guilty to a number charges involving drug trafficking.
They pushed narcotics, heroine and methamphetamines into the United States when they led an international drug trafficking ring based in Kenya.
Akashas decried their incarcerations in the US taking issue with Kenyan officials whom they accused of abandoning their sons who used to bribe them.
The drug barons bankrolled many top lawyers in the city together with broke politicians who have all turned out to be betrayers.
Real as it is, no one wants to associate with a drug baron in the day, no one has even seen their traumatized mother too.
But the brothers are specifically bitter with Gulam Hussein, a Pakistan national and Indian Vijaygiri Goswami who had to betray them and become a prosecution witnesses. If anything they pleaded guilty.
Akasha brothers being cuffed by DEA officials in an old courtesy photo.
The Akashas confessed to the US authorities that they bribed senior officials in Kenya, Tanzania and other countries to peddle drugs across borders without serious scrutiny.
They also named senior officials in the judiciary and many state officials who are part of their drug trafficking empire.
Do the brothers who further admitted that they bought guns and grenades for Somalia based terror group Al Shabaab have the audacity to complain about being abandoned?
The guilty brothers are also claiming that Shanzu man schemed a plot that saw their family conned 5 million shillings.
A fake State House official duped the Akasha family that he could secure the release of their sons from US prisons.
The con they identify as Chris Mwai runs a church at Shanzu near Mtwapa and moves in high-end government vehicles.
Mwai and his accomplices met at his church where Baktash’s wife Najma Juma paid a Sh50,000 down payment to secure her husband’s ‘freedom’ from a US jail.
He lied to Mrs Baktash that he was highly connected to the Kenyan president as he made a fake call.
Mwai would later link Najma to a man she identified as Stephen Nzioka, alias Steve, who assured them that the two brothers would be released on November 28 2018 and arrive in Kenya on December 2, 2018.
She paid the Sh5 million in bits of Sh500,000 to State House Comptroller ‘Kinuthia Mbugua’.
Mwai got Sh1.5 million to have the case out of court but disappeared only to return when he was charged in court.
Governments in Africa lose about $25 billion annually to corporate abuse by multinationals who transfer profits to offshore tax havens and to individuals engaging in tax evasion through undeclared assets.
Of these losses, $23.2 billion is to tax abuse by multinationals and $2.3 billion is lost to evasion by individuals and the money is equivalent to the paying annual salaries of 10.1 million nurses on the continent or enough to pay $21 per person of the continent’s 1.2 billion people.
According to data collated jointly by the watchdog organisations Tax Justice Network (TJN), Public Services International (PSI) and Global Alliance for Tax Justice (GA4TJ), over $1.2 billion is lost by East African governments — Kenya, Ethiopia, Burundi, Tanzania, Uganda, South Sudan and Rwanda.
Global Alliance for Tax Justice said tax loss of $25.7 billion every year is equivalent to 52.46 percent of the continent’s combined health spending and equates to 28.67 percent of Africa’s combined education spending.
“That loss is equivalent to 6.69 percent average tax revenue of 370.3 billion and greater than global average loss of 2.61 per cent tax revenue,” said GA4TJ. Top five losers are Nigeria, South Africa, Egypt, Angola and Sudan.
Data opacity
An inaugural report released last week of November by Tax Justice Network, titled State of Tax Justice 2020 found that higher income countries were responsible for 98 percent of all the tax loss by countries around the world lost while a lower income countries were responsible for only two per cent.
The reports say; “Multinational corporations paid billions less in tax than they should have by shifting $1.38 trillion worth of profit out of the countries where they were generated and into tax havens, where corporate tax rates are extremely low or non-existent. Private tax evaders paid less tax than they should have by storing a total of over $10 trillion in financial assets offshore.”
TJN’s Miroslav Palanský, a data scientist, says $25.7 billion is lost in Africa to offshore tax heavens with most of the revenue losses incurred by Kenya are due to tax abuse by companies than wealthy private individuals.
“This means that there is a relatively high amount of economic activity reported by multinationals in Kenya compared with profits these companies report in Kenya and paid taxes,” he said in an online presentation.
Mr Palanský said TJN with other partners are calling for full company-level data to be made publicly available as full extent of corporate tax evasion cannot be determined based on data self-reported by multinationals or published by Economic Co-operation and Development (OECD).
The Paris OECD ensured no individual company could be identified.
“Revenue loss can be attributed to the misalignment between economic activity and profits. The precise reasons for this cannot be identified with certainty using the country-by-country-reporting data,” said Mr Palanský.
“We identify a number of actions countries can take to reduce amount of money lost to tax havens. One action, EAC members can take is to boost tax transparency by making data from country-by-country reporting publicly available at company level,” said Mr Palanský.
The Tax Justice Network said Kenya is hardest-hit in the region, losing $565.8 million annual — $502.4 million to corporates and $63.3 million to individuals — depriving the country of much needed money for development and provision of essential services. The social impact of this loss is some 36.02 percent of the country’s health budget.
Kenya’s tax loss is equivalent to paying annual salaries of 240,781 nurses and equivalent to 13.28 per cent of country’s annual education spend.
Vulnerability to illicit financial flows is through exports to Pakistan, Netherlands and the US who are among Kenya’s major trading partners.
In Tanzania, the government lost $299 million by way of profit shifting by multinationals and imports misinvoicing by private tax evaders annually with the $279 million lost attributed to global tax abuse by multinationals while $20 million was lost to global tax evasion by private individuals.”
This loss is equivalent to 40.76 percent of the public health expenditure or annual pay for 135,577 nurses. The country is also vulnerable to illicit financial flows through on inward trade (imports), with Saudi Arabia having 21.1 per cent risk, China (16.8 percent) and India (10.6 percent).
Burundi loses $1.9 million as annual tax to offshore tax evasion which is equivalent to 2.95 percent of public health expenditure or equivalent to annual salaries of 4,000 nurses.
In Ethiopia, the annual loss is $379.5 million, of which $362.6 million goes to multinationals and $16.9 million is lost to individuals’ offshore tax evasion. The total loss is equal to the annual salaries of 436,648 nurses.
Ethiopia’s vulnerability to illicit financial flows linked to outward trade (exports) with China, accounting for 10.1 percent risk, Saudi Arabia (9.9 percent) and Kuwait (9.7 percent). Burundi is vulnerable due to exports to Switzerland posing 15.4 per cent risk.
Uganda incurs losses of $115.3 million of which $96.5 million caused by corporate tax dodging and $18.7 million by individual, an equivalent of 31.43 percent of public health expenditure or annual pay of 83,658 nurses. But Uganda too inflicts tax loss of $14.3 million on other countries. It is vulnerable to illicit financial flows based on exports with Kenya posing 27.9 percent risk, the UAE (21.3 percent) Rwanda (9.7 percent).
Corporate abuse
Rwanda loses $72 million annually to unpaid tax with $69.9 million driven by corporate tax abuse and $2 million by individuals’ evasion. The loss is equal to 34.78 percent of public health expenditure and lost money can pay 88,061 nurses annual salaries.
Rwanda faces illicit financial flows based on exports with Kenya posing 29.5 percent risk, United Arab Emirates (20.2 percent) and Switzerland (16.4 percent). South Sudan and Somalia lose $7.2 million and $291,652 respectively as tax.
Africa’s tax havens cause other countries to lose $4.7 billion through the presence of tax havens here, an equivalent of annual salaries of 375,708 nurses.
The tax havens in Africa are responsible for 1.11 percent of global tax losses with $3.5 billion lost as multinationals are enabled to commit corporate tax abuse and facilitating private evasion of about $1.1 billion.
Corporate abuse is linked to multinationals shifting profits to tax havens in order to under report the profit made in countries of operation and paying less taxes than they should. Revenue is also lost when wealthy individuals hide undeclared assets and incomes offshore beyond the reach of the law.
Taxpayers worldwide lose $427 billion each year to private tax evasion by individuals and multinational corporate profit-shifting now under cutting public funding for Covid-19 response. Money lost is nearly 34 million nurses’ salaries or one nurse’s salary every second.
Global number of salaries is based first on calculating how much each country’s tax losses is equivalent to in local average annual nurse salaries. The figures added to produce these totals are based on OECD nurse salaries data.
TJN’s CEO Alex Cobham said the Covid-19 pandemic has exposed the grave cost of turning tax policy into a tool for indulging tax abusers instead of protecting people’s wellbeing.
“We urge governments to introduce an excess profit tax on large corporations that short-change countries. For digital tech giants who claim to have our best interests at heart while having abused their way out of billions in tax, this can be their redemption tax,” he said.
The five top destinations which are responsible for tax losses in other countries by enabling corporate abuse or private tax evasion are Cayman Islands, the UK, Netherlands, Luxembourg and the US. The Caymans is responsible for 16.5 per cent of global tax losses (over $70 billion), UK (10 per cent over $42 billion), Netherlands (8.5 percent over $36 billion), Luxembourg (6.5 percent over $27 billion) and the US (5.53 percent over $23 billion).
The Thika-based millionaire who disappeared 11 weeks ago showed up yesterday, saying he had been released by people who were holding him hostage.
Mr Julius Gitau, popularly known as Gitau wa Mali, told police that his abductors freed him from the location, which he later found out to be Kamwangi town in Gatundu North constituency, on Saturday.
Mr Gitau said he spent the night at the house of his third wife Selina Nelly.
Detectives said they picked Mr Gitau’s mobile phone signals as he was talking to his wife.
They then went to the house where they confirmed his presence and required him to report to the Directorate of Criminal Investigations (DCI) offices in Gatanga yesterday.
Police said Mr Gitau told them that he was abducted by gun-wielding men near Kenya Revenue Authority officers in Thika on September 21 around 10am.
The man who owns two general merchandise shops in Thika named Jugi Enterprises, but whose fortunes dipped following his disappearance, said he was seized on his way to a gym.
Third wife
“Accompanied by my third wife, who is a police officer in Thika, I reported to my shop in the heart of the town and delivered a parcel to my messenger around 7am,” he told police.
Mr Gitau said he then left for the gym but was abducted and lost consciousness after being forced to have a soda.
The tycoon said he found himself in a big building with a hall when he regained consciousness.
That, he says, was his home for 11 weeks.
“I was made to wash clothes and utensils for the tenants. Once in a while, I was ordered to clean the compound,” Mr Gitau’s statement to the police says.
The businessman added that he had no chance of knowing the owners of the home and cannot describe its appearance and location “because I was restricted to the servant quarters”.
The tycoon’s family said no one ever called to demand ransom.
Mr Gitau said he does not understand why anyone would want to keep him as a domestic worker for such a long time.
Murang’a police officers interviewed by the Nation, however, said the businessman’s story is not believable.
They said his account of what transpired would be reviewed “with all the expertise and technology available”.
Mr Gitau said he was handed over to two heavily built men on Saturday around 4am, adding that they escorted him out of the compound.
“We walked for hours before entering a forest. The men then told me to continue walking and never look back,” he said.
“I later found myself on a dusty road. I was lucky because a boda boda appeared almost immediately.”
Mr Gitau said the rider gave him a mobile phone which he used to call his family.
He added that the boda boda took him to the main road and offered him some money to board a Thika-bound matatu.
Communication signal
He said his talk with the rider indicated that he had been held near Kamwangi “where there is a tea plantation”.
Mr Gitau said he then went to his wife’s house.
Meanwhile, Gatanga DCI boss John Kanda and other detectives had picked the communication signal between Mr Gitau and his wife.
“We had to verify that the communication was not a hoax. We then traced his movement up to the point we were sure it was the businessman and his wife,” Mr Kanda told reporters.
“We left some officers near the house to give him time to cool off. I called him on Sunday morning to record a statement.”
He added that the businessman has been allowed to seek medical attention and counselling since he appears traumatised.
Midnight. A deserted parking lot near the Bulgaria-Serbia border. 1994. A war is on.
Fourteen Serbian lorry drivers doze in their cabs, waiting for Bulgarian customs officers to allow them and their truckloads of precious fuel to rumble across the border into war-torn Yugoslavia.
Suddenly, they are ambushed by a gang of torch-wielding assailants, hauled from their trucks, beaten, and forced to hand over wads of foreign currency at gunpoint. One of the Serbs is abducted and taken hostage after he fails to produce any cash.
It might have been just another incident involving a marauding gang in a politically and economically fragile eastern European country struggling to emerge from its Communist past, but two names caught the attention, first, of Bulgarian law enforcement and, later, the media.
One was gangland kingpin Boyan ‘The Baron’ Petrakiev, who led the attack on the Serbian lorry drivers and was sentenced for his role in it many years later. The other — allegedly present on the night of the incident, reportedly questioned and charged, but never tried, let alone convicted — was Guerassim Nikolov.
At the time, Nikolov was a 20-something croupier working in a casino in the Bulgarian capital Sofia. He would depart Bulgaria in April 2000, six years after the incident, on a short flight to Switzerland and onward to Nairobi.
Criminal charges
Eight months later, in December 2000, a Bulgarian daily newspaper reported that criminal charges in the Serbian truck driver case had been finalised and presented in court. Petrakiev was named as an accused, as was Nikolov. But, as noted by the diligent reporter who attended the court hearing that day, Nikolov was no longer in the country.
For the past two decades, Nairobi has been Nikolov’s second home and a springboard for his casino, lottery and sports betting empire. He settled here comfortably and, by 2006, had become the respectable face of the Toto 6/49 SMS lottery.
All would have been hunky-dory for him, but then out of the blues a Bulgarian investigative journalist called Slavi Angelov turned up at Jomo Kenyatta International Airport, hot on the trail of another Bulgarian businessman.
The target of Angelov’s investigation was Krasen Tenev, a former university lecturer who had fled Bulgaria after police discovered his printing business had been producing hundreds of thousands of fake excise labels used to avoid tax on imports and exports.
Angelov tracked Tenev down to Nairobi, where he was living with his family under an assumed Ukrainian identity. Having previously printed materials for Bulgaria’s state-owned Toto 6/49 lottery, Angelov discovered that Tenev was now a business partner with Nikolov in the Kenyan version of the firm.
Prior to Angelov’s fact-finding trip to Nairobi, Tenev had been found guilty of five counts of forgery and sentenced in absentia. Angelov would later publish an investigative series in five parts about Tenev and Nikolov’s respective backgrounds. The story, published in Bulgarian and unavailable online, is rich in factual detail. It also gives the impression that Angelov had excellent contacts in Bulgarian law enforcement.
Guerassim Nikolov.He is one of the founders of betting company SportPesa.
Photo credit: Pool
Tenev would quietly go to ground again around this time, and he is still a wanted man on Interpol’s Red Notice watchlist.
By contrast, Nikolov’s fortunes grew exponentially. After moving to Nairobi in 1999, Nikolov worked as General Manager at the Grand Regency Casino for more than three years before becoming Managing Director and founder of First Lotto Ltd in 2001.
First Lotto got its first gaming licence in Kenya to run Toto 6/49, an SMS lottery that was already very popular in Bulgaria, in 2002. The firm launched its operations in Nairobi a year later, months before the Bulgarian police found the counterfeit materials in Tenev’s printing warehouses.
As Nikolov’s lottery was settling on the streets of Nairobi, Bulgarian police were completing their investigations and were finally ready to take the 1994 kidnapping and extortion case to trial in Bulgaria. It was around that time that Tenev landed in Nairobi, travelling on a fake Ukrainian passport as ‘Fyodor Koval’. He was found living with his family in a luxury golf course development under his Ukrainian alias, and was also a partner with Nikolov in the Toto 6/49 lottery and casino business.
In January 2006, Bulgarian police investigating credit card skimming syndicate also traced Boyan ‘The Baron’ Petrakiev and a young associate, Hristo Barbanov, to Nairobi after the pair bought return air tickets from Sofia on British Airways using a cloned credit card.
Shortly after they arrived in Kenya, Bulgarian police arrested Petrakiev, Barbanov and several others and charged them in connection with the credit card cloning scam. They would soon all be released on bail.
In June, Tenev, who is still on the Interpol Red List, was found guilty on five counts of forgery, including the reproduction of more than 1.3 million fake excise stamps used on alcohol products. He is sentenced in absentia to 11 years in prison.
It was after the Angelov expose that it started emerging that the Bulgarians may not have been the people they said they were. Several former employees of First Lotto Limited also said in the expose that they had had to return home to Bulgaria because of unpaid wages.
Extortion case
In March 2009, with the statute of limitations set to expire for the 1994 kidnapping and extortion case, and following a public outcry, prosecutors finally secured a deal. Petrakiev was sentenced to three years and seven months for the kidnappings, but he had already served the sentence period in pre-trial detention. Charges against the other co-accused were dropped.
In July, Petrakiev, Varbanov and their accomplices were convicted for credit card forgery after a three-year investigation during which they spent much of the time in detention or under house arrest.
After the prosecution secured a plea bargain with the accused, Petrakiev got a four-year sentence and Varbanov a two-year term, suspended for five years. Meanwhile, in Nairobi, First Lotto Ltd and Toto 6/49 were closing down, having run up large debts in 2011.
A decade after showing up in Nairobi, the Bulgarian team had settled in just fine and were ready for their second, and perhaps most important, gamble; SportPesa. And so, in 2012, Pevans East Africa registered the SportPesa trademark in Kenya. Two years later, in February 2014, SportPesa was launched to a roaring success.
At the launch ceremony was Bulgarian Slavi Binev, an alleged former organised crime group leader who praised Nikolov and business partner Gene Grand as “old friends”.
A year later, in June, SportPesa Holdings Limited was incorporated offshore, in the Isle of Man. Petrakiev then emerged and granted an interview to Buzzfeed, saying he now lives in Spain and has “casino interests in Kenya”. He said he was also a partner in an arms dealership, contracted by the US government to send small arms to rebel groups fighting in the Syrian civil war.
Dubious characters
While Nikolov may have had a brush with the law and appears to have crossed paths with some dubious characters, he has not been found guilty of any crimes anywhere in the world that the Sunday Nation could independently verify. Most importantly, he is one of four Bulgarians who have been key to the meteoric rise and equally spectacular crash of betting giant SportPesa.
Family affair and the Dick Wathika connection
If SportPesa were a puppet, Nikolov would be its master; the man behind the velvety curtains, the unseen hand pulling the strings, directing the orchestra. Those who have worked closely with him describe him as a flamboyant, charming but ruthless businessman. An interior designer by training, he speaks Russian, Bulgarian and heavily accented English.
The second major actor at SportPesa is Gene Grand, often referred to as an American businessman. Grand is a close business associate of Nikolov’s. Some say they go back years together to the same high school in Sofia.
Grand is Bulgarian-born and was christened Evgueny Krantov. Years later he obtained US citizenship and a new name, seemingly tailored to his growing business ambitions.
Whereas Nikolov is the bold and brash one, people describe Grand as the softer and more empathetic partner. A former cabin crew attendant, Grand is said to love private parties. His business acumen, others say, is razor-sharp.
Two more Bulgarians complete the picture, and they are Nikolov and Grand’s sisters. Valentina ‘Valya’ Mineva first receives a passing mention in investigative journalist Angelov’s story, as a former employee of the Bulgarian state-owned lotto who helped Nikolov, her brother, to run Toto 6/49 in Kenya. She is the systems expert behind all of Nikolov’s lottery and betting innovations.
Kalina Karadzhova, nee Krantova, is the equally savvy sister of Grand, who runs the financial side of SportPesa’s Isle of Man and UK-based businesses. Together, the four Bulgarians control just under 50 per cent of the company’s shareholding in Kenya, the Isle of Man and the UK.
Mineva also wholly owns two other companies based offshore in tax havens that orbit SportPesa and have received billions of shillings either directly or indirectly from Pevans for various IT, software and payments services.
SportPesa is in many ways a family-run business. Indeed, the Nikolov and Krantov families are distantly related through marriage. But despite the combined skills and experience of the Bulgarians, SportPesa might never have got off the ground were it not for its deep-pocketed Nairobi shareholders.
The late Nairobi Mayor Dick Wathika opened the doors for Nikolov and Grand’s lottery and casinos to thrive in the Kenyan capital. One incident in early 2005, reported in the media at the time, is instructive.
Street protests
Hundreds of lottery ticket sellers for Kenya Charity Sweepstake woke up one morning to find that their kiosks, their source of livelihoods, had been demolished by the Nairobi City Council, on the directions of then-mayor Wathika.
But they did not take the demolition lying down. The ticket sellers staged street protests against the city’s “clean-up exercise”, and complained bitterly to the media that their vacated spots were now occupied by booths owned by Nikolov’s Toto 6/49 lottery.
In the years since, Wathika was occasionally spotted in Nairobi hotels in the company of the Bulgarian businessmen, whom he told anyone who cared to ask that they were business partners.
According to one source, Wathika was the financially stable one who bailed the Bulgarians out on more than one occasion when unpaid debts and the odd unexpected player jackpot threatened to cripple their gambling businesses. He later ended up being a major shareholder and founding chairman of SportPesa, which launched in Nairobi in 2014.
SportPesa Racing Point’s drivers Lance Stroll (left) and Sergio Perez stand alongside the newly unveiled Formula One livery during the unveiling at the 2019 Canadian International Autoshow, on February 13, 2019. SportPesa Racing Point F1 Team was formerly known as Force India.
Photo credit: File
It was Wathika who invited Nairobi billionaire and businessman Paul Ndung’u, a former accountant who had made his fortune as a Safaricom dealer, to invest in SportPesa.
In its early days, SportPesa required an injection of capital to boost its marketing efforts so that it could propel itself into the big leagues. That’s when the entrepreneurial Ndung’u, who knew very little about betting but recognised a promising business prospect when he saw one, bought a chunk of equity in the firm.
Relations between Wathika and his Bulgarian business bedfellows soured in 2015, and the former mayor and MP-turned-SportPesa-chairman confided in friends that he felt he was being sidelined from company decision making. He died of suspected cardiac arrest that December, shortly after attending a business meeting with the Bulgarians at their Finix Casino in Hurlingham to thrash out their differences. Wathika’s widow, Asenath Wacera, inherited his stake in the business while Ndung’u became chairman.
That was long before the billions really started flowing in. Then fame. And then a little arrogance. Quickly, the temptation to play fast and loose with tax payments to Kenya Revenue Authority crept in, amidst increased cash outflows out of Nairobi to companies based in tax havens such as the Canary Islands, Isle of Man and Dubai.
In 2016 SportPesa set up shop south of the border in Tanzania. The following year it made it to South Africa. It also went into partnership deals with Arsenal and Southampton FC, and a shirt sponsorship deal with Hull City. The icing on the cake was setting up a UK holding company in 2017, and an IT services company based in the iconic Liver Building in Liverpool, the corporate headquarters of Everton FC.
In May 2017, it signed a shirt sponsorship deal with Everton worth a reported Sh1.4 billion (£9.6m) a year; and moved into their new “global headquarters” on the city’s Mersey waterfront. That financial year, SportPesa pulled in bets from Kenyans of around Sh110 billion ($1.1bn). Several months later, it was caught over a Sh15 billion tax bill as its shareholders got entangled in a bitter boardroom feud.
The billions, cash outflows and offshore transactions
By 2018, Pevans East Africa Limited, the firm that operated the SportPesa brand before it was recently transferred to Milestones Games Limited, was on its way to hit the Sh150 billion revenue mark. It was another historic year as its accountants retreated to crunch its full-year numbers. But 2018 was also the last full financial year before the Kenya government shut SportPesa down.
A Sunday Nation analysis of its financial statements now gives a rare peek into the huge cash outflows from Kenya that perhaps attracted the attention of financial experts.
As the accountants worked the numbers, one thing became certain; the betting machine at SportPesa had delivered another wonderful set of results. In that year alone, punters were placing bets of about Sh12.4 billion on average every month, or about Sh400 million daily.
Everton’s Nathan Broadhead during a SportPesa Cup Friendly match between English Premier league side Everton FC and Kariobangi Sharks on July 7, 2019 at Moi International Sports Centre, Kasarani.
Photo credit: Chris Omollo | Nation Media Group
The total bets received that year added up to Sh149.7 billion ($1.47billion), using the prevailing dollar exchange rate of Sh101 at the time. From this amount, the accountants took away Sh129.6illion ($1.27b) to account for what it paid punters who got lucky. This left the company with a gross gaming revenue of Sh20.1 billion ($197 million) on its books. Gross gaming revenue refers to the total value of bets placed by punters in a particular period minus the payouts after the winnings.
The tax bill for that year was Sh4.9 billion (US$48million), which placed it in the league of some of the top taxpayers in Kenya.
After factoring in the tax payable, the accountants were left with an operating reserve of Sh15.2 billion ($149m), from which other operating costs were to be paid.
At this time, the accountants should have realised what would have worried any external auditor and kept them on the edge. Despite the significant growth in revenues that were now almost grossing Sh150 billion, SportPesa’s reported profit margins were dropping significantly and its tax bill was not proportionately different from when it was making revenues of less than Sh50 billion.
This should worry any tax accountant and raise an internal audit query at the very least. But if it worried the team at SportPesa, it never came to the limelight.
However, it is how these billions were flowing out of the company to firms owned or controlled by its directors abroad that caught the attention of the Kenyan financial systems.
Out of the Sh15.2 billion profits, one-third, or Sh5.3 billion ($52m), was paid to related parties, including Tech Pitch Limited, a Kenyan company, SPS SportSoft Ltd (UK), and Kentech SL (Canary Islands).
After Tech Pitch received its cash, it paid Sh1 billion ($9,8m) to a Dubai-based firm, Peg B Technology FZE, for ‘payment processing fees”. This formed the lion’s share of Tech Pitch’s Sh1.4 billion ($13.7 million) reported operating costs for 2018, the year under review.
Of the Sh5.3 billion paid offshore, one-third, or Sh1.4 billion, was paid to Kentech and Peg B Technology, which appear to be wholly owned by a single director and shareholder of SportPesa, Ms Valentina Mineva. Ms Mineva, just to remind you, is a sister of Nikolov, the founder and director of SportPesa.
Both Mineva and Nikolov appear to have received generous personal benefits in the form of salaries and other perks from these outflows. For instance, in the year under review, Tech Pitch appears to have paid Nikolov a director’s remuneration package of Sh196 million ($1.9m) despite the company’s entire wage bill being booked as Sh19.4 million ($190,000).
The Sunday Nation wrote to SportPesa, and to each of these directors directly, asking them to explain these cash movements and whether they were above board, and whether due taxes were paid. The SportPesa office in Nairobi acknowledged receipt of the questions but refused to take its right of reply. It also did not respond to our question on whether it needed more time to file its response. Its foreign directors Nikolov, Grand, Mineva and Kalina Karadzhova also did not respond to our enquiries.
We then asked SportPesa Global to respond to our findings and various allegations made by one of its directors and shareholders, Paul Ndung’u, among them the large cash outflows, tax issues, and if they were being investigated by the UK’s Serious Fraud Office.
We also asked SportPesa Global to explain the reasons behind the current boardroom feud, the rushed capital call, refusal to hold board meetings, as well as the reason various reputable auditors had left the firm in a huff.
Matt Day, a SportPesa spokesperson based in the UK, said “SportPesa is fully compliant with all legal and tax requirements in the jurisdictions” in which it operates.
“We are not aware of any investigation by the United Kingdom Serious Fraud Office into SportPesa. Equally, Pevans East Africa has not transferred any such funds to offshore accounts,” Day told the Sunday Nation.
He added that all SportPesa brand actions have always been done with the knowledge and explicit approval of the board members of all companies involved and in compliance with company by-laws and local regulatory guidance.
“SportPesa,” he said, “has ongoing and regular working arrangements with large auditing and tax advisory companies and any changes in the past to these relationships have been driven purely by commercial reasons.”
Day, however, refused to respond to several other questions on grounds that some were defamatory.
In the UK and Isle of Man companies, director Kalina Karadzhova appears to issue many of the companies’ directives and resolutions. One of the most recent, and perhaps the most significant yet, is the granting to Milestones Games, in September 2020, of a five-year non-exclusive right to use the SportPesa trademark.
Karadzhova is sister to another significant SportPesa shareholder, Gene Grand, also known as Evgueny Krantov.
Until recently, these foreign directors owned 46 per cent of Pevans, 48 per cent of SportPesa Holdings Isle of Man, 47 per cent of SportPesa Global Holdings UK, and 100 per cent of in Kentech and Peg B.
The grand fallout and fight for the soul of a betting empire
On September 14, 2020 a letter landed at the Kenya Industrial Property Institute at 1.50pm. It bore the signatures of SportPesa chief executive Ronald Karauri and company secretary Robert Macharia — a fellow director and shareholder in the company — and informed the recipient that Pevans East Africa Limited had agreed to transfer the Sportpesa brand from Kenya to its UK-based holding company, Sportpesa Global Holdings Limited.
The deed of assignment executed by SportPesa Global was completed on September 15, 2020. Kalina Karadzohova signed on behalf of SportPesa Global while her husband, Nikolay Karadzhova, witnessed it from their apartment in the Isle of Man.
To anyone who had not been following the SportPesa story, there was nothing sinister in this move. Nothing to raise the alarm.Or temperatures.
To the corporate geniuses at SportPesa, this was child’s play. It was not the first time they were doing it, so it should have been a simple and brilliant plan for the firm, which had spent 15 long and cold months without any revenues in Kenya after the government withdrew its betting licence last July.
All its directors had to do was find another company that would obtain a betting licence and then acquire almost all shares in the entity as soon as the paperwork was in the bag.
Now, with full control, they would transfer its trademark, which is now one of SportPesa’s most precious assets, to this new entity for a song, in a transaction akin to moving your wallet from your left to the right hand.
That company turned out to be Milestones Games Limited. The plan went well… until Kenya’s betting regulator realised something was amiss.
The transfer of the brand to SportPesa Global for just Sh14 million also opened a new battlefront for the firm’s directors, with Ndung’u accusing his Bulgarian partners of going behind his back to make such decisions and plotting to dilute his shareholding in the company in order to weaken him. But the hottest fire was burning at Milestones, where the original owners were being fried by the Kenyan government for allowing SportPesa, the brand, to sneak in through their doors. On Thursday this week that plan ran into headwinds after the Betting Control and Licensing Board revoked Milestoness operating licence. A court suspended that decision pending determination of a case filed by SportPesa.
Before the drama on Thursday, SportPesa had been in operation for a few days courtesy of another court order that allowed it to use Milestones’ licence.
Interior Cabinet Secretary Fred Matiang’i said the government was not going back down on its decision to withdraw the licence.
“Kenyans can rest assured on this matter,” said Dr Matiang’i, breathing his usual fire. “We are not going to allow criminals, money launderers and all manner of shadowy characters to do all these funny things in our country.”
The decision to cancel Milestones’ licence was made after the betting regulator came face to face with the reality that the firm was just Pevans East Africa in disguise, and without the baggage of the Sh15 billion tax liability to Kenya Revenue Authority.
The Sunday Nation spent the last three weeks peeling off the layers of ownership of the new firm, and in the end discovered just how easily SportPesa had manoeuvred the landmines placed before it by Dr Matiang’i and the technocrats at the Interior ministry to get back to the betting game through the backdoor.
After realising that it would be difficult to come back through Pevans East Africa Limited, the directors called the meeting that agreed to transfer the SportPesa brand from Kenya to its UK-based holding company, SportPesa Global.
One of the documents used to effect the trademark transfer, a Form TM 14 lodged with the Kenya Registry of Trademarks in mid-September, lists SportPesa Global’s trade or business address as First Floor, Jubilee Building, Victoria Street, Douglas, Isle of Man 1M1 2HS in the United Kingdom.
The directors of SportPesa Global are listed as Kalina Karadzhova (non-shareholder), Ivalyo Bozoukov (one per cent shareholder) and Paul Wanderi Ndung’u (17 per cent shareholder).
Three weeks after the letter to Kenya Industrial Properties Institute noting transfer of the SportPesa brand, Kenya’s betting regulator awarded a licence to Milestones Games Limited on October 6, 2020. Twenty days later, on October 26, 2020, SportPesa Global granted a non-exclusive licence to Milestone Games Limited to use the SportPesa trademark.
Company ownership records show that Karauri and another Pevans shareholder, Francis Kiarie, had assumed almost total control of Milestones Games’ shareholding via a company they co-own that was only incorporated on October 4, 2020.
Four days after SportPesa Global allowed Milestones to use the brand name, Karauri fired his now infamous tweet, declaring that SportPesa was finally back in business.
The betting licensing board had been walloped at its own game, and it immediately wrote to Milestones, accusing it of obtaining its license under one set of owners only to later transfer its shareholding to another entity, thereby circumventing its due diligence requirements on betting company ownership.
The board threatened to withdraw the license for a second time despite a court decision okaying the use of the brand name by Milestones.
When Milestones applied for its bookmaker’s license, its shareholders were Nob Five Limited (9,950 shares) and Wilson Ngatia Karungaru (50 shares). At the time, Nob Five Limited was owned by John Munene Nderitu (250 shares), Jackline Nyambura Kung’u (500 shares), and Joseph Muendo Mutua (250 shares). James Muigai Ngengi, a nephew of President Uhuru Kenyatta, was the addressee in correspondence between Milestones and the regulator.
But immediately it got the licence, a new company — Selenium Limited — emerged on its shareholders roll. Selenium Limited is owned by Karauri, alongside Francis Waweru Kiarie, another Pevans shareholder. Effectively, SportPesa would not have needed to change anything to get back to the game. Not even its CEO, office address, or gaming and payment infrastructure.
But why would Pevans do this? Why would it so willingly sell its biggest brand, the SportPesa name, to Milestones? It is hard to answer that question without insider information. What we know, however, is that SportPesa was coming back into the market clean, without the huge tax liability to KRA and minus the heavy cloud of money laundering allegations that was hanging over the head of Pevans.
Pope Francis has revamped the Holy See’s financial intelligence and anti-money-laundering unit following financial scandals, including an ongoing in-house corruption probe, Vatican officials said Saturday.
The changes involve the governance and organization of the Vatican’s financial watchdog agency, which has been renamed the Supervisory and Financial Information Authority, or ASIF, the Vatican said. Until Saturday, the agency was known as AIF, or Financial Information Authority.
The revamped authority’s president, Carmelo Barbagallo, a former Italian central bank official, said the changes ordered by Francis in the form of a new statute would strengthen the entity’s financial supervisory responsibilities.
Earlier this year, Barbagallo indicated he was pressing for supervisory authority that the pontiff signed off on Saturday.
Francis is intent on bringing greater accountability and transparency to the Vatican, building on efforts forged by his predecessor, Benedict XVI.
ASIF’s activities are being divided into three units: vigilance, rules and legal affairs, and financial information.
Its functions include “supervision aimed at the prevention and countering of money laundering and the financing of terrorism,“ according to the new statute.
In signing off on the statute, Francis cited the Holy See’s “progressive implementations of supervisory offices regarding anti-laundering, combating terrorism and the proliferation of the arms of mass destruction.”
Financial scandals have dogged the Vatican for decades.
One of the latest centres on a London real estate deal involving a $350 million investment by the Vatican secretariat of state. Vatican investigators are looking into the case.
ASIF’s predecessor agency was raided last year by Vatican police who seized confidential documentation as part of an investigation by Holy See prosecutors into the 2012 investment in a swank London residential building. Much of the money the Vatican poured into the investment came from donations from Catholic faithful.
When raided, the agency was conducting its own investigation of the deal, trying to discover who might have benefited from it. The sensational raid effectively torpedoed the agency’s own probe and led to the removal of its top two managers. Barbagallo was appointed a few weeks later.
The faithful flock of Lavington United Church will this Sunday be holding a fundraiser for their new sanctuary that is to be constructed on the corner of Ndoto Road and Margaret Kenyatta Road in Nairobi’s Lavington estate. Little do they know that every shilling raised will be aiding and abetting the greed and corruption at the church.
The proposed sanctuary has been the center of a controversial battle between the church and the residents of the surrounding Lavington estate. According to an article published on The Star on 1st December 2020, Lavington residents have taken the church to court to stop the construction of the sanctuary. In their suit, residents accused the workers of causing pollution though noise and effluent discharge. Through their lawyer Wilfred Mutubwa, the residents also say that the development flouts the zoning requirements for the estate.
The proposed sanctuary.
In a letter dated 21st October 2020, residents accused the Chairman of the Lavington United Church Committee Mr. Godfrey Kibua of breaking a promise by deceitfully refusing to provide the full set of building plans for an independent architectural audit. With the piecemeal plans provided, the residents ascertained that the building consists of 6 floors and a tower, a blatant violation of the ordninances and zoning guide as prescribed by Nairobi County’s Department of City Planning.
Court documents also show that the plot numbers in the Environmental Impact Assessment license issued by Nema are not the same as the plot number of the project site in the change of user approval issued by the Nairobi city county, a clear indication that officials within the church are out to deceive the authorities all in the name constructing a sanctuary.
According to documents in our possession, the corrupt church officials endorsed a doctored environmental impact assessment report of the project. Instead of interviewing residents, proponents of the project sought the views of MPESA agents, flower vendors, caretakers, students and even a shoe shiner. This goes to show that the greedy and corrupt members of the Lavington United Church committee not only acting in bad faith but are willing to cut corners and do whatever it takes to illegally put up their sanctuary.
We all know that a church is supposed to serve as a place of solace, worship, and fellowship for the surrounding community. But if this same community coming out to fight the church, then we as the faithful must do our part to investigate the matter, root out corruption within the church, and co-exist in harmony.
AP– Clinging to notions of widespread vote rigging that his own attorney general has disputed, President Donald Trump repeated a litany of baseless assertions Wednesday of political corruption, machine tampering and mysterious votes appearing out of nowhere that allowed Joe Biden to steal the election.
“This election is about great voter fraud, fraud that has never been seen like this before,” Trump said in a 46-minute address posted on social media.
“It’s about poll watchers who were not allowed to watch. So illegal. It’s about ballots that poured in and nobody but a few knew where they came from. … It’s about machinery that was defective, machinery that was stopped.”
None of those assertions are true.
A look at the claims and reality:
VOTER FRAUD
TRUMP: “You can’t let another person steal that election from you.”
THE FACTS: To be clear, no election was stolen from Trump.
One month after the Nov. 3 election and as states begin certifying their votes, Trump is clinging to false notions of voter fraud. But others in his administration have already said the election was secure. Attorney General William Barr said the Justice Department had seen no evidence of widespread fraud to overturn Biden’s margin of victory.
Biden earned 306 electoral votes to Trump’s 232, the same margin that Trump had when he beat Hillary Clinton in 2016, which he repeatedly described as a “landslide.” (Trump ended up with 304 electoral votes because two electors defected.) Biden achieved victory by prevailing in key states such as Pennsylvania, Michigan, Wisconsin, Arizona and Georgia.
Trump’s allegations of massive voting fraud have been refuted by a variety of judges, state election officials and an arm of his own administration’s Homeland Security Department. Many of his campaign’s lawsuits across the country have been thrown out of court. And his administration has already agreed to allow the formal transition of power to Biden to begin.
On Tuesday, Barr told The Associated Press that no proof of widespread voter fraud has been uncovered. “To date, we have not seen fraud on a scale that could have effected a different outcome in the election,” he said.
No case has established irregularities of a scale that would change the outcome. Lawsuits that remain do not contain evidence that would flip the result.
___
BALLOT ‘DUMPING’
TRUMP: “I go from winning by a lot to losing a tight race. It’s corrupt.”
TRUMP: “It’s about big leads on election night, tremendous leads, leads where I was being congratulated for a decisive, easy victory, and all of a sudden by morning or a couple of days later, those leads rapidly evaporated.”
THE FACTS: No mass corruption happened. Trump is actually describing a legitimate vote counting process, not a sudden surge of malfeasance that no one has seen before.
Indeed, news organizations and officials had warned in the days and weeks leading up to the election that the results would likely come in just as they did: In-person votes, which tend to be counted more quickly, would likely favor the president, who had spent months warning his supporters to avoid mail-in voting and to vote in person either early or on Election Day.
And mail-in ballots, which take longer to count since they must be removed from envelopes and verified before they are counted, would favor Biden. That pattern was exacerbated by the fact that many states prohibited early counting of mail-in votes that arrived before Election Day.
In addition, big cities are often slower to report their numbers, and those votes tend to skew Democratic. Likewise, many states tend to count mail-in ballots at the end of the process.
___
TRUMP: “In Wisconsin, as an example, where we were way up on election night, they ultimately had us miraculously losing by 20,000 votes. And I can show you right here that Wisconsin, we’re leading by a lot, and then at 3:42 in the morning, there was this. It was a massive dump of votes. Mostly Biden.”
THE FACTS: No, there wasn’t a “massive dump of votes” in the middle of the night. Milwaukee election officials finished counting the city’s roughly 169,000 absentee ballots around 3 a.m.
Wisconsin law requires the results of those absentee ballots be reported all at once. The count of the absentee ballots was livestreamed on YouTube for anyone to watch. When it was finished, Milwaukee police escorted the city’s elections director from a central counting location to the county courthouse to deliver thumb drives with the ballot data.
___
DOMINION
TRUMP, on Dominion Voting Systems electoral software used in many states: “When you look at who’s running the company, who’s in charge, who owns it — which we don’t know — where are the votes counted — which we think are counted in foreign countries, not in the United States — Dominion is a disaster.”
THE FACTS: Servers that run Dominion software are in local election offices, not in foreign countries. Claims that the company has foreign servers or ties to Germany or Venezuela are false.
It’s true that the company is privately held and does not disclose its financials, but the New York-based private equity firm Staple Street Capital has owned a majority stake in Dominion since 2018. Fictional claims that Dianne Feinstein, the Clinton family, Nancy Pelosi and Hugo Chavez are owners of Dominion have been debunked.
“There is no evidence that any voting system deleted or lost votes, changed votes, or was in any way compromised” in the 2020 election, according to a joint statement released by the federal Cybersecurity and Infrastructure Security Agency.
___
TRUMP: “In one Michigan county, as an example, that used Dominion systems, they found that nearly 6,000 votes had been wrongly switched from Trump to Biden. And this is just the tip of the iceberg. This is what we caught. How many didn’t we catch?”
THE FACTS: That’s a misrepresentation.
It’s true that a tabulation problem in the 2020 election involved a few thousand votes in Antrim County, Michigan. But that was the result of human error.
When the Republican-leaning county initially reported a landslide win for Biden, social media users grew suspicious about the Dominion election management system used to tabulate the data.
It turned out Dominion was not to blame, according to the Michigan Department of State. “There was no malice, no fraud here, just human error,” County Clerk Sheryl Guy told the AP. The tabulation error was corrected.
Eddie Perez, a voting technology expert at the OSET Institute, a nonpartisan election technology research and development nonprofit, agreed that the Michigan case was the result of human error involving voting technology, not the software itself.
___
‘DEAD’ VOTERS
TRUMP: “Dead people — and we have many examples — filled out ballots, made applications and then voted.”
THE FACTS: He’s repeating a false claim of dead people voting, particularly in Pennsylvania and Michigan. But there’s no evidence that this occurred, and officials in both states say the claims are unfounded.
The false claim that deceased voters cast ballots “comes up every election,” said Jason Roberts, a professor of political science at the University of North Carolina at Chapel Hill.
Experts told the AP that it is common for state voter rolls to include voters with birthdates that make them appear impossibly old, but these are usually explained by human error, software quirks or voter confidentiality issues.
“A similar complaint was brought before a PA court — and soundly rejected,” the Pennsylvania Office of Attorney General said in a statement. “The court found no deficiency in how PA maintains its voter rolls, and there is currently no proof provided that any deceased person has voted in the 2020 election.”
Tracy Wimmer, a spokesperson for Michigan’s secretary of state’s office, told the AP that on rare occasions a ballot received from a voter may be recorded as though that person is too old to be alive. This can occur when an incorrect birth year is entered on voter rolls.
Some of the claims about dead voters appear to stem from a federal lawsuit that alleges Pennsylvania failed to “maintain accurate and current voter rolls” that include 21,000 apparently deceased registrants. But that is not the same as votes from dead people being cast and counted. The Public Interest Legal Foundation, a conservative group based in Indiana, amended the lawsuit on Nov. 5 against Pennsylvania Secretary of State Kathy Boockvar.
The group has taken legal action in a handful of places to try to force voter roll pruning. In December 2019, the group filed a lawsuit against Detroit election officials alleging that the city had over 2,500 dead people on the voter rolls — including one born in 1823. The lawsuit was dropped in June 2020 after election officials updated voter rolls.
___
POLL WATCHERS
TRUMP: “In Pennsylvania, large amounts of mail-in and absentee ballots were processed illegally and in secret in Philadelphia and Allegheny counties without our observers present. They were not allowed to be present. … They were thrown out of the building.”
THE FACTS: He’s incorrect.
Trump is wholly misrepresenting a court case in the state and what happened at voting places. No one tried to ban poll watchers representing each side in the election. Democrats did not try to stop Republican representatives from being able to observe the process.
The main issue in the case was how close observers representing the parties could get to election workers who were processing mail-in ballots in Philadelphia. Trump’s representatives sued to allow the observers to get closer than the guidelines had allowed. A court ruled in favor of that request.
The counting in Philadelphia was being livestreamed, and Trump’s lawyers admitted in court that their campaign had observers in the room — “a nonzero” number of them, as they put it. Poll watchers have no role in counting votes.
A parliamentary committee heard that Ministry of Health acting Director General Patrick Amoth sent a text message to suspended Kenya Medical Supplies Authority (Kemsa) CEO Jonah Manjari allegedly asking him to give a commitment letter to a company to supply Covid-19 materials.
In yesterday’s deliberations of the National Assembly Public Investment Committee, Kaloleni MP Paul Katana produced a text message that he said Dr Amoth sent to Dr Manjari pushing a tender for Roxxy ventures.
Mr Katana claimed that the proprietor of Roxxy Ventures, a Mr David Munene, had earlier talked to Dr Amoth seeking assistance to get the tender.
The text that Dr Amoth sent to Dr Manjari, according to Mr Katana, read: “Hi Daktari, please consider as earlier discussed.”
“Did you at any time send this message to the CEO?” asked Mr Katana. Dr Amoth refuted the claims, saying he at no time influenced any tender at Kemsa.
“I’m not aware of the message and I did not text the CEO,” Dr Amoth said. It is not clear whether Roxxy Ventures got the tender as it is not on the list of pre-qualified companies that supplied PPEs. Dr Amoth, however, admitted that many people came to his office to look for tenders to supply Covid-19 materials but he directed them to Kemsa.
“I can confirm that many people came to the Ministry of Health and specifically to my office wanting to supply the items. But I directed them to Kemsa because that is the procurement entity for the Ministry of Health,” Dr Amoth said.
He also denied having any relationship with the eight companies mentioned on Tuesday that Dr Manjari offered commitment letters to in total disregard of the law.
The eight companies that won tenders cumulatively worth Sh2.1 billion in complete disregard of the law include Regal Freighters, Northlink GSC Ltd, Meraky Healthcare, Everywhere Distributors, LA Miguela Holdings Ltd, Shop and Buy Ltd, Midlife Biological Ltd and Komtel Kenya Ltd.
Dr Amoth also admitted to the MPs that he does not know the whereabouts of Covid-19 supplies donated to Kenya by Chinese billionaire Jack Ma even as he said that Kemsa never consulted the ministry on the procurement of the Personal Protective Equipment. He said that upon official receipt of the Mr Ma’s donations at the Jomo Kenyatta International Airport (JKIA), they were taken by technical officers while he headed to a press conference.
He told the Abdulswamad Nasir-led committee that, on the day the donations arrived at the JKIA, he went to receive them together with the Ethiopian Ambassador and that the donations were never opened at the airport as earlier stated by the ministry of health.
“I’m actually the one who received the consignment together with the Ethiopian ambassador. The consignment was later taken by our technical officers. I went to a press conference after that and I don’t know what happened thereafter,” Dr Amoth said, adding: “It was just a ceremonial handing over at the airport. We could not open the consignment to confirm whether everything was intact. I cannot tell whether part of our donation remained in Ethiopia because they too had their own donations from Jack Ma.”
This comes as the Director General told the committee that the Sh6.3 billion worth of PPEs that are rotting at Kemsa were bought without technical advice from the ministry.
“Our technical advice and the quantity of Covid-19-related materials was never sought by Kemsa. Had we been consulted, we would have given the correct number of PPEs to be bought based on the projections that we had made,” Dr Amoth said.
He further told MPs that, despite his office writing to Kemsa to give it a status update on the number of stock it has, the agency never provided the stock update and continued to buy Covid-19 materials.
Mr Nassir told the DG that it was not prudent for the country to spend billions of shillings in buying PPEs that are currently rotting at Kemsa stores.
“Don’t you think it was not worth spending billions in buying PPEs that we don’t need and we have ended up keeping them in stores?” asked Mr Nassir said.
“Looking at the stock held by Kemsa and the numbers we have, probably they did not need all those PPEs,” Dr Amoth said.
Appearing before Parliamentary Committee, Kenya Medical Supplies Agency (Kemsa) officials revealed that they had received death threats as cartels pushed for awarding of COVID-19 supplies tenders.
Appearing before the parliamentary Public Investments Committee (PIC), suspended Kemsa procurement boss Charles Juma turned the tables on the suspended CEO Jonah Manjari claiming that he bypassed the procurement office to award tenders in excess of Sh2 billion for Covid-19 essentials to choice companies.
Juma told PIC that the commitment of eight companies, Regal Freighters (Sh270 million), Northlink GSC Ltd (Sh135 million), Meraky Healthcare (Sh140 million), Everywhere Distributors Ltd (Sh118 million), La Miguela Holdings Ltd (Sh180 million), Shop N buy Limited (Sh970 million), Medlife Biologicals Ltd (Sh240 million and Komtel Kenya Limited (Sh283 million) were all issued in Manjari’s office.
Singling out Shop N buy Ltd and Nanopay Ltd, the suspended procurement boss said they were approved and issued with commitment letters by Manjari without the knowledge of the procurement office.
Juma told PIC that Manjari was more involved in the procurement process than his office.
He claimed that the suspended CEO ignored his advisory on budget expenditure that had exceeded the allocation and instead went ahead and awarded tenders, without involving the procurement office.
He claimed that Manjari cautioned him on the individuals involved in the process, a caution he translated to mean a threat to life.
“He told me that I did not know the intrigues of the procurement.
“Several times I went into his office and he told me how I did not know who he was dealing with and how he was told that he could disappear. I perceived this a threat to my life,” Juma told the committee.
He added: “I had no control of the whole procurement of Covid-19. If I did, we would not have been where we are now.”
Juma said he told the suspended CEO to discuss the overshot of the budget with suppliers and to cancel the procurements. Despite the advice, only one company’s letter was revoked and the eight were still awarded.
Juma also dragged the name of Nairobi Senator Sakaja into the Sh7.8B scandal.
He quoted a third party — his secretary (Pamela Kaburu)— as having informed him that the senator was at CEO Jonah Manjari’s office when the latter was pressuring them to draft a commitment letter for Shop N Buy.
The company is among 50 companies on EACC radar for their role in the questionable deals that have left Kemsa with a Sh6.2 billion stock it is unable to dispose of — unless at a loss.
Speaking under oath, Juma said the letter that handed the firm Sh970 million worth of supplies was backdated to April, yet it was processed in June.
“The commitment letter for Shop N Buy was raised on June 5. The CEO called my secretary and instructed her to prepare the letter and backdate the same to April 30.”
Juma said that when he questioned the secretary further, he was informed that the CEO’s personal assistant had asked for the format of the commitment letters.
The Ethics and Anti-Corruption Commission has allayed the fears that the case that was to be probed under 21 days and extended to over 100 days has gone cold. The CEO Twalib Mbarak reiterated his stand that the investigations are at an advanced stage citing complexity of the case as the factor behind the delay.
EACC had initially forwarded the names of six individuals culpable but the DPP was dissatisfied and returned the files for further investigations on October 2.
Kemsa is facing a possible loss of Sh3 billion following procurement irregularities in the purchase of PPE and face masks for Covid-19 emergency response.
The medical supplier has Sh6.2 billion stock of Covid-19 response items it is unable to dispose, unless at the said loss.
On virtually on every street in the Nairobi central business district (CBD) you will not fail to spot gangs of middle-aged men frantically waving to catch the attention of motorists searching for parking slots.
For a fee of Sh200 directly paid to them, one is assured of parking even though such payments should be channelled to the county government, which manages the parking bays.
Most of City Hall officials assigned to oversee the payment of parking fees routinely turn a blind eye on the dealings that run into millions of shillings every day.
Unknown to the public, the collections by the parking boys are later shared with the county government officials who prefer to hang around corner shops and other secluded points away from the prying public eye.
Some of the officials even drop their conspicuously branded overcoats and reflector jackets, hoping to remain unnoticed as they preside over the theft from their employer.
And now, an audit has revealed the depth of theft of billions of shillings in parking revenue in Nairobi — involving county officials and shadowy gangs that have taken over the city’s parking bays.
A report by the Nairobi County Assembly’s Budget and Appropriations Committee lays bare how “cartels” in the parking department continue to siphon money from the City Hall’s top revenue earner, second only to land rates.
“Whereas Nairobi County had the potential to collect higher revenue from parking fees, corruption, and a lack of innovativeness had led to dismissible collections.… petty cartels had taken over parking spaces and were in collusions with senior county officers diverting most of the realisable fees and that a significant number of parking spaces had been taken over by rogue matatu operators,” the reports reads in part.
Annual collection from parking fees has been on the decline at the county government from the Sh2.34 billion collected in the financial year 2016/17 being the highest ever realised with slightly half of annual targets being recorded.
The report revealed that the annual on-street parking revenue has been reducing every financial year although it has the potential of collecting more.
In the financial year 2015/16, City Hall realised Sh2.017 billion as parking revenue against a target of Sh5 billion.
This then increased slightly to Sh2.034 billion in 2016/17 financial year against a target of Sh64.32 billion before plummeting to Sh1.9 billion in the following financial year while in 2018/19 financial year, Sh1.95 billion was recorded from parking revenue stream even after the target was reduced to Sh2.7 billion.
Exposing the extent of the rot at the parking services department, the report revealed that Sh437,500 is lost every day from on-street parking alone. This translates to about Sh13 million in a month and Sh157 million annually.”…that the fair estimate for 6, 125 parking slots, attracting an average turnover of 1.5 vehicles a day, would be Sh1,837,500 per day; but the department would collect Sh1,400,000 showing a variance of Sh437,500 per day.
“Topping the list of blame, are inspectorate officers seconded to the department to enforce compliance by motorists who are accused of compromised enforcement.
Revenue from parking fees is divided into four cluster streams including on-street and off-street parking, public service vehicles (PSVs) seasonal tickets and loading zones for purposes of easy collection of revenue.
For this purpose, the parking department has 396 parking attendants and 56 inspectorate officers. But instead of carrying out enforcement, the officers have turned into fierce “cartels” who have turned the money-spinning revenue stream into a fiefdom.
There are 12,000 parking slots declared by City Hall. Out of this; 3,250 have been allocated to MCAs, county staff and diplomats.
Loading zone — the parking reserved for government agencies and small and medium enterprises for loading and off-loading goods for one calendar year for a defined fee — have taken up 1,601 slots. Out of this, 1,135 are.
Matatus, paying seasonal tickets, have been allocated 1,024 slots leaving 6,125 private motorists.
And it is in this last two categories that the county government is at the mercy of the cartels who run rugged the two revenue clusters.
In the financial year ending June 30, 2019, the county reported having collected Sh1.88 billion as of March 30, 2019, a huge figure with three months to the end of the financial year.
However, there was a catch. Either the county officers were exaggerating figures or were stashing money collected.
The committee noted that the stated revenue collection figure was not as per tabled documents.
The department indicated that they had collected revenue of Sh1.88 billion as at March 30, 2019, whereas the third quarter Revenue Report by the office of Controller of Budget, tabled before the county assembly, showed the total revenue collected at Sh1.54 billion, indicating a discrepancy of about Sh400 million.
And there was more. The officers revealed there was no clarity on the number of parking slots and the number of vehicles that operated within the precincts of Nairobi County.
“From the submissions by the sector, the committee was taken aback that there was no clarity on the number of parking slots and vehicles that operated within the precincts of Nairobi County,” read the report.
“This presented a loophole as the department could not identify how much revenue was collected during that period.
“To show how entrenched the scheme is, a report by Nairobi Assembly Public Accounts Committee last year revealed that in the financial year ending June 30, 2017, a total of 1,305,440 vehicles parked in the 6,125 slots during the financial year but only 402,401 or 31 per cent, paid for parking.
During the year, 25,700 vehicles were clamped for non-payment, as per JamboPay system records, yet unaccounted for clamps (vehicles unclamped without valid reasons) totalled to 15,388 or 60 per cent of the total clamped vehicles, denying the county at least Sh30.8 million in revenue.
As a result, City Hall collected only Sh1.97 billion against a target of Sh3.54 billion from on-street parking.
In a 2018 report by the watchdog committee was even worse. The 2015/16 financial year report revealed that out of the 2.12 million vehicles that used the county’s parking slots that year, only 1.3 million paid parking fees.
This means that 795,600 vehicles or 38 per cent of the motorists did not pay, robbing the county of more than Sh1.23 billion in revenue losses annually.
The report further says of the 27,358 vehicles clamped for non-payment of parking fees in the year, 10,672 or 39 per cent were released without payment or requisite approval.
The trend, according to the report, was blamed on fraud and collusion among motorists, parking attendants and senior county treasury officials.
According to the JamboPay Sacco Manager, 401 saccos with 27,000 matatus had registered to pay seasonal tickets in Nairobi.
But the report revealed that slightly half, at 14,000, of the matatus are compliant with 13,000 non-compliant.
The excuse county officials used was that they did not have control over the JamboPay system and that the parking department had limited scope to enforce saccos compliance because the county did not have control over the number of vehicles that paid per sacco.
Last year, parking services director Tom Tinega came under fire from the Budget Committee for ordering all the 397 matatu saccos in Nairobi to stop paying seasonal parking ticket fees through JamboPay and instead resort to banking the money directly to county bank accounts.
