Category: Investigations

Embakassi MP Babu Owino has been taking the heat lately following the airing of a piece on NTV highlighting the plight of DJ Evolve whom he had shot and hospitalized. The DJ is now coping with his new life, a situation he didn’t envision and people are mad.

Members of public have asked for a hurried prosecution of the case in which the ODPP has answered that Coronavirus has derailed the case.

While the focus is on Babu, there’s a long chain of other politicians who’re currently in office and have had similar murder cases and which we must never forget. We’re going to highlight those that are in the public domain.

Garissa Governor Ali Korane

Two years ago, Garissa county finance minister Idriss Mukhtar who was shot three times in the head, the intention was to kill him but luckily, he survived. Idriss has remained maimed and still in hospital with a bullet lodged in his head.

Governor Korane was accused of having hired a hit man to take out Mukhtar who was questioning his fake academic credentials. Dr Aden Mukhtar his father had said that his son had information showing that the county boss’ academic papers are fake. “He questioned the academic qualifications of Governor Ali Korane. That is why some people wanted him dead,” Dr Mukhtar insisted.

This would put the Governor at risk of losing his seat.

According to Dr Aden Mukhtar, the ex-county minister was one of the financiers and campaigners of Governor Korane in the last General Election as he sought to unseat the county’s first Governor, Nathif Jama.

Then, said Dr Mukhtar, there was optimism that Mr Korane would return the favour when he clinched the governorship. After all, they are from the same clan.

According to high ranking sources in the County Government of Garissa, Korane and the former CEC fought each other verbally, and the two parted ways never to see each other again, despite being from the same clan.

Since Mukhtar knew very well all the secrets of the Governor, he decided to reveal to authorities to take action against him. This could have brought down the governor, especially during a time when the war on corruption had been intensified.

Mukhtar was described as a thorn in the flesh for governors who find avenues to squander public money. Having worked with the former governor Nathfi Jama he would call Ethics and Anti-Corruption Commission to investigate him.

“Now that their tribe got the Governorship seat he thought he will get all he wanted that he missed previously. Korane knew his problems and avoided him so much. Then Idris after realising that he has been ignored, he went to CBK and extracted all the transactions of the county which could tarnish Koranes name and further being prosecuted for misusing county funds,”

The governor got tired of Mukhtar and dismissed him. He filed a case against the county government and the court awarded him Ksh50 million for unfair dismissal.

The Governor while knowing the intentions of Mukhtar decided to hire hitmen with the help of Fafi Mp Abdikarim Osman to finish him before he could leak his top secrets which could bring him down immediately. He paid the hitmen an undisclosed amount, and the deal was sealed. It was time for Mukhtar to die.

A mistake however happened at this juncture. The hitmen wanted more money. They approached Mukhtar asking for money in order to spare his life. Mukhtar was not going to bow, and he vowed that he won’t give out any coin to avert his death.

He instead recorded a statement with the police about his imminent death, implicating governor Korane.

That is what led to the August 23 incidence at Hurlingam mosque. The hitmen decided to complete their mission. He (hitman) fired his gun three times towards Mukhtar’s car, who was seated on the drivers seat as per the CCTV footage. Luckily for Mukhtar (and unluckily for the killers) he did not die on the spot. He was rushed to a Nairobi hospital.

Later, three men believed to be hired assassins were arrested (one was governor Korane’s cousin) and vehicle that was allegedly used impounded at a garage in Ngara. The vehicle had been repainted and the registration numbers changed.

David Mwai, who was the lone gunman captured on CCTV shooting Idriss at close range, died while in a cell at Parklands Police Station and, though police sources pointed at suicide, the family thought otherwise.

That was the last this case was heard of in public, with a dead witness clearly there was no case.

Two years later, Idriss is still in comma and with a bullet lodged in his head. The 35-year-old holder of Master’s in Business Administration and a PhD student at Kenyatta University, had his life disrupted forever regardless of the compensation.

The forgery case against the governor has never been heard and filed probably gathering dust in EACC offices. He’s still in office as his alleged victim is in hospital. Those files need to be investigated and ascertained if the fight on corruption is genuine.

Adan Keynan

In 2003, Adan Keynan was alleged to have killed Sheikh Ibrahim Ali Abdulleh.

The delegate and two of his associates were found dead, with gunshot wounds in a forest in Ngong.

The Somali peace talks in Kenya had been dogged by controversy and walk outs – and made little progress.

Earlier in the same month, Ahmed Rashid Mohamed, another delegate at the talks was also killed.

Mohamed, a senior member of the Rahanweyn Resistance Council was found dead at Mbagathi, the venue of the peace talks.

In a recent spat, Activist Mwangi posted on his Twitter linking the politician to the murders he wrote, “President Uhuru Kenyatta has appointed Adan Keynan as Jubilee Coalition Secretary. Who is Adan? The MP was alleged to have shot 3 men to death and had their bodies dumped in a forest in Ngong after a piece of land he was selling in Nairobi for Sh34 million turned out to be fake.”

Keynan was however acquitted of the charges based on lack of evidence. In a long ruling, the judge however cast his own suspicions. “I do note with deep sorrow that due to unavailability of evidence as per law, I have to decide as I have done, although this court did harbour some suspicion as to guilt of the Accused. I cannot base my decision on suspicion which should be, as I have indeed done so, on the facts before the court.” Said Judge Rawal in the closing statement.

Migori Governor Zedekiah Obado

By Lionel Faull and Paul Wafula

(A version of this story was first published by the Daily Nation in Kenya).

A cousin of President Uhuru Kenyatta has quietly accumulated a financial stake in SportPesa’s controversial gambling empire, Finance Uncovered can reveal.

The finding — discovered in details buried in corporate filings in Kenya, the UK and the Isle of Man — came as the president signed a law to axe a 20% excise duty on bets staked, a levy that contributed to SportPesa’s withdrawal from its lucrative Kenyan market last year.

The proposal to drop the duty was included as an amendment to the Finance Bill, which had been passed by the National Assembly last week. The final hurdle to it becoming law was the president’s assent on Tuesday night.

The president’s crucial decision is being analysed closely now it has been established that Peter Kihanya Muiruri, his second cousin, has over the past 14 months acquired stakes in three companies which are part of  SportPesa’s international gambling empire.

SportPesa is the shirt sponsor of English Premier League side, Everton FC.

After the government introduced taxes on bets placed by punters, and aggressively pursued gambling firms for its payment, it prompted a number of leading gambling firms to close their businesses in Kenya.

The taxes were brought in to both stem rampant gambling addiction in Kenya and also raise revenue from what has rapidly become a highly lucrative business.

Now it has been axed, it could see SportPesa, whose biggest shareholder and founder is Bulgarian national Guerassim Nikolov, re-enter the Kenya sport betting market and revive the wider gambling industry.

A SportPesa revival in Kenya would also benefit a member of Kenyatta’s own family.

A presidential spokesperson did not return calls or respond to a detailed text message asking whether Kenyatta knew about his cousin’s shareholding before he signed the bill into law.

The Kenyatta family business, managed by one the president’s brothers, has sprawling interests across the Kenyan economy, and individual family members also invest widely.

Shareholdings

Finance Uncovered, working with the Daily Nation in Kenya, accessed documents filed by SportPesa companies in Kenya, the UK and the Isle of Man.

The documents show Peter Kihanya Muiruri is a shareholder in three companies linked to SportPesa:

• The first is a 1% stake in Pevans East Africa, the company which owns SportPesa in Kenya. Muiruri appeared on the shareholder register for the first time in May 2019, shortly before a government clampdown on the betting industry began.
  Muiruri is now also a director of Pevans. Pevans has previously disclosed that it amassed Sh20 billion in revenues and generated gross profits of Sh9 billion (£70m) in Kenya in 2018.

• The second stake is a 0.5% shareholding in SportPesa Global Holdings Limited (UK) – a  company that owns SportPesa’s non-Kenyan betting companies in Tanzania, South Africa, Italy and Russia. It also owns a highly profitable UK business SPS Sportsoft Ltd, which provides IT services to SportPesa sister companies, including Pevans in Kenya. Muiruri acquired the stake last November. SportPesa Global Holdings made a profit after tax of almost £12m in 2018, according to its financial statements.

• The third is a 3% stake in SportPesa Holdings Limited (Isle of Man). This is an offshore company which receives SportPesa’s revenues from bets staked in the UK. Companies based in the Isle of Man, a small British Crown dependency and tax haven in the Irish Sea, do not have to publicly disclose their accounts so no financial information is available. Muiruri acquired the stake last December.

The value of Muiruri’s shares in the three companies is unclear, because up-to-date financial information for these companies is not available. It is also unknown at this stage how much, if anything, Muiruri paid for the shares.

SportPesa did not respond to the Daily Nation’s emailed questions.

The company was asked whether it had  lobbied the President either directly or indirectly for the reinstatement of its betting licence or any tax reductions.

The firm was also asked to disclose how much the president’s cousin paid for his shares in each of the three companies, and when he became a director in Pevans.

There is no suggestion of wrongdoing either by Muiruri or SportPesa.

Family connection

Muiruri himself is a low-key businessman. Little is publicly known about him. Muiruri’s mother is Uhuru Kenyatta’s first cousin, while his grandfather was the younger half brother of Jomo Kenyatta, Kenya’s first president.

In November 2016, President Kenyatta attended the funeral service of Muiruri’s father, the late Mzee Josphat Muiruri Kihanya, at the Holy Family Basilica in Nairobi and gave a short address. The presidency also issued a formal press statement paying tribute to the former civil servant, although it made no mention of the family connection.

SportPesa lost its betting license last July. The company announced it was withdrawing from  Kenya last September in response to what it called “the hostile taxation and operating environment in the country”. Their withdrawal led to 400 job losses and the sudden cancellation of its local sports sponsorships.

In February this year SportPesa also withdrew from its international sponsorship commitments, including a reported £9.6 million a year shirt sponsorship with Everton.

The 20% duty was only introduced last November, according to the Kenya Revenue Authority.

Tax about-turn

Reversing any betting tax was not on the cards two months ago, when the Departmental Committee on Finance and National Planning chaired by Joseph Limo published the Finance Bill for public comment on 8 May. At that stage, the bill contained no plans to tinker with any betting taxes.

Committee meeting minutes show that an obscure stakeholder group — identified only by a non-existent URL as shade.co.ke — wrote to the committee on 15 May proposing the scrapping of the 20% excise duty on bets placed. “It has made many betting firms cash strapped hence cutting down on their sponsorships to local sports clubs,” they said.

The committee agreed, noting that “the high level of taxation had led to punters placing bets on foreign platforms that are not subject to tax and thereby denying the Government revenue”.

In its justification for approving the amendment, the committee explained to the National Assembly that it would “reverse the negative effects of this tax on the industry which has led to closure of betting companies in Kenya, yet international players continue to operate”.

The committee turned down other proposals by the unidentified stakeholder group to amend other tax laws affecting betting, which included a reduction in withholding tax on players’ winnings from 20% to 10% and exempting the betting industry from digital services tax.

A gambling nation

As the committee was still considering the excise tax proposals in May, Finance Uncovered working with the Daily Nation published leaked betting revenue declaration figures from the industry for May 2019.

The data showed that punters had wagered more than Shs30bn (£234m) in just one month. SportPesa alone accounted for two-thirds of these betting revenues, according to the data which all betting firms submitted to the Betting Control and Licencing Board (BCLB).

Such huge revenues for a single month showed what is at stake for the gambling companies in Kenya.

The controversial 20% excise duty would have been levied directly on these revenues, and could — on the basis of the leaked revenue data — have been worth up to Shs72bn (£562m) in annual taxes for the Kenya Revenue Authority (KRA).

However, this was when the industry was at its peak, and before the government began its tax and regulatory clampdown last July, including suspending  the betting licences of gambling firms including SportPesa and its next biggest rival Betin.

Two other associates of the president already hold a significant chunk of equity in SportPesa both locally and internationally.

They are Paul Wanderi Ndung’u, a key fundraiser for Kenyatta’s Jubilee political party during the 2017 election (17%); and Asenath Wachera Maina (21%), whose late husband Dick Wathika is a former Nairobi mayor whom Kenyatta has described as a long-time friend.

In addition to these links, SportPesa’s Nairobi headquarters share the same office complex that also houses the Kenyatta family-owned investment holding company.

 This article was developed with the support of the Money Trail Project.

David Mwai used to operate a play station shop and a number of boda boda’s. He was approached one day with a job offer to kill someone. In Kenya, human life has no value. It’s cheaper to get someone killed than it is to bribe them. Lawyers and witnesses against powerful politicians have been killed in the past. It’s become the norm. The offer on the table for carrying out the job was Sh2.4 million. Mwai couldn’t resist.

Two years ago l wrote about how police murdered a hitman in their custody. Rebecca is alive but she can never share her story because she will be murdered like her husband. The man who hired the hitman is still the governor of Garissa @HonAliKorane. We live in a mafia state! https://t.co/brOA7f29Cu

— The People’s President (@bonifacemwangi) June 20, 2020

The target for this kill was Idriss Mukhtar and his lawyer Charles Kanjama. The client, according to Mwai’s family, was Ali Korane. Ali is the current Governor of Garissa. He was working in the airforce in 1982, during the attempted coup. During the purge that followed the failed coup, he was saved by his wife, as she happened to be General Mahmoud Mohamed’s daughter, the man who quashed the coup. His father-in-law went even further to cushion Ali, by ensuring that he was absorbed into the provincial administration. He rose from the position of District Officer to Provincial Commissioner, before becoming a Permanent Secretary in retired President Moi’s regime. After the NARC government came to power, Ali started a security company. He had links in the military, the police and the National Intelligence Service and his businesses thrived.

Last year, Ali ran for public office and Idriss Muktar joined his campaign team. Idriss later fell out with Ali Korane and decided to expose the Governor’s fake academic credentials. Korane had claimed he had a masters from Nairobi University and Idriss had evidence that Korane’s academic credentials were fake. It’s alleged that Governor Korane then engaged Mohamed Hussein Aden to deal with Idriss. It is Mohammed who is alleged to have recruited David Mwai for the job and offered to pay him Sh2.4 million. The assignment was to kill Idriss and his lawyer, Charles Kanjama, who was preparing a court case to challenge Ali Korane’s academic qualifications.

On 19th August 2018, David Mwai shot Idriss in the head outside a mosque in Kileleshwa. He was supposed to shoot Idriss seven times. He tried, but the gun failed after firing three rounds. Idriss was hit in the head once and is currently admitted at Nairobi Hospital with the bullet lodged in his head. David Mwai escaped on a motorbike after the shooting.

Before Idriss was shot, he had filed a report at Kilimani Police Station claiming that he was receiving death threats from the Governor and his security people. Police tracked Mwai to Dandora Estate and on 27th August, the 28-year-old was arrested, together with his wife, Rebecca Hajila. With the mother of his two babies in custody, Mwai was shown CCTV footage of him shooting Idriss Mukhtar. Police persuaded him to confess and turn state witness. This he did, with the hope of buying his wife’s freedom, since she wasn’t part of the crime.

The failure of the Justice system to pursue justice for my client Idriss Mukhtar, who was shot in the head, is a crime crying to heaven for vengeance. And a scandal of monumental proportion. It left me with a scar on my soul. It left his family wounded & desperate.#RuleOfLaw

— Charles Kanjama (@ckanjama) June 20, 2020

In his confession, Mwai said he was hired by Mohammed Hussein Aden, who worked for the Governor, through a lady known as Njoki. On Tuesday, 28th August, Mwai called his elder sister, Esther Wanjiru, and asked her to find his wife. He had been told she would be taken to Milimani Law Courts, but family members had already gone there and failed to find her. On Thursday, 30th August, Mwai called Esther and told her that he had confessed to the shooting and was ready to face the judge. He added that he’d been approached by some people, inside his cell, who said they could help him escape. Esther urged him not to do it, suggesting that they were tricking him, so they could kill him. Mwai had been given some documents to sign, but since he didn’t understand them, he had refused. That evening, during the 7pm news, Esther learned that her brother had allegedly killed himself. David Mwai’s evidence allegedly implicates Governor Korane as the mastermind and the person who would have benefited from Idriss’ murder.

The police, using telephone records, tracked down the people involved in the case. All of them have a connection with the Governor. The people in custody are the Governor’s bodyguard, his security advisor, and the lady who connected David Mwai with the Governor’s people.

The police arrested Governor Ali Korane, but following numerous phone calls, he was eventually released. Korane had threatened the investigating officers and pushed for the case file to be moved from Kilimani Police Station to CID Headquarters. The officers who had cracked the case were removed and new officers introduced to help cover up Korane’s involvement. Whereas, it is human nature to hate David Mwai for agreeing to be used as a killer, there is no excuse for the police to have murdered him inside a police cell. Mwai’s murder is to help a bigger murderer get away. I am not defending a cold-blooded killer, but it is wrong for one to be murdered inside a police cell. We live in a country with laws.

I have slept in almost every police station in Nairobi. Most police stations were built during the colonial era and the cells are horrible. The “windows” are just a small strip of an opening near the roof, barricaded with iron bars. As someone who has been arrested enough times, I can tell you for certain that you’re never alone inside a cell. Belts and shoe straps are confiscated and if someone brings you food, they must taste it first.

A country must be governed by the rule of law. David Mwai deserved his day in court, as do his masters, who hired him to kill, and his murderers too. If the killers of Mwai get away with murder, what will stop any other accused person from killing a whistleblower, a witness? David Mwai’s murderers were paid by the same person who paid David to kill Iddriss Mukhtar.

Six people are in police custody in connection with Idriss Mukhtar’s shooting, but the main culprit may not be among them. The police have denied David Mwai’s family access to view his body and his wife is still missing. Betrayed by law enforcement, now there is pressure on Iddris’ family to settle this issue out of court, using camels. Tradition, like political privilege, seems only to be invoked to defend the rich, never the poor. Iddris’ family wants justice. We want the laws of the land to be upheld.

Kenya can boast about being a regional hub for many things, but food sovereignty isn’t one of them, as the latest import dependency ratio on its food balance sheets shows. And not all of these imports are legal, or safe to eat.

The trade of substandard foodstuffs is controlled by criminal cartels that run from Kenya with regional links to Uganda, Tanzania and Somalia. While genuine traders follow Kenya’s import regulations, criminals are bringing in food products such as sugar, maize, rice, milk powder, vegetables and pulses full of mercury, lead and other insoluble matters unfit for human consumption.

Alice Ojwang, a lecturer on nutrition and dietetics at the Technical University of Kenya, says the country is seeing a surge in reports of infant mortality and diseases such as liver cancer. This is due to increasing levels of micro-toxins like aflatoxin in food.

Besides the problem of Kenya’s population eating substandard food, the livelihoods of smallholder farmers are also at risk. They have to grapple with high costs related to food production. For example fertiliser in Kenya is possibly the most expensive in the world. Seeds and production equipment are also costly. These factors have led to local farmers complaining about a lack of government protection from the competition posed by food imports smuggled into the country.

There are three main value chains and routes used by criminals to smuggle or import food into Kenya. The first is the Somalia-Kenya route where goods, mainly sugar, are smuggled into Kenya from Somalia’s port of Kismayo using lorries, vehicles and donkey carts.

One report estimates that 150 000 tonnes of sugar valued at US$400 million are smuggled into Kenya from Somalia every year, denying the Kenyan government the revenue owed to it. Other reports, including one from a United Nations monitoring group, have pointed out that charcoal from Somalia is smuggled alongside sugar.

The second value chain works along separate smuggling routes through the Uganda-Kenya and Tanzania-Kenya border crossing points. These points include both land routes (mainly Busia, Malaba, Lwakhakha, Namanga, Taveta and Isebania crossings) and inland waterway routes that comprise over 600 private jetties, landing sites and ports. Kenya imports most of its food from Uganda and Tanzania with the latest trade import valued at over US$660 million – most of which comprises agricultural-related products.

This inter-country trading is not illegal in itself, as it is protected by the East African Community (EAC) regional integration pillars of a common market and customs union. However food cartels work with criminals by smuggling other contraband and illicit goods for them, says Tom Ogwe, founder of Sub-Saharan Community Intelligence Analysts.

Ogwe says most of what crosses the borders is not inspected. He says contraband ethanol to make illicit alcohol, drugs (especially cannabis) and illicit firearms used by armed groups and criminals are key products smuggled by these food cartels for criminals.

The third value chain is through product specific duty-free importation windows periodically announced by the Kenyan government. In 2017 Kenya announced yet another call for importers to ship in bulk quantities of sugar and milk powder under the EAC customs management duty remission scheme. These regulations allowed Kenyan manufacturers to import sugar duty-free from Common Market for Eastern and Southern Africa member states.

Criminal entrepreneurs took advantage of this floodgate and gaps in the procedures to import substandard sugar and milk powder. What followed has been an uproar from genuine traders and their associations on one side, and a divided government with ministries shifting blame and responsibility by giving contradictory statements, on the other.

An expert on border security who asked to remain anonymous said it is almost impossible for the value chains of these complex criminal markets to exist without the criminals colluding with government officials. Reports such as the ENACT Organised Crime Index also indicate that these criminals are often helped by corrupt state officials.

These officials could include: the military patrolling Kenya’s borders, especially with Somalia; highway police who ease the movement of goods through checkpoints; customs and revenue departments; and the different bodies in charge of goods inspection and quality assurance.

Many government-backed food sector industries such as sugar and dairy are struggling to stay afloat in Kenya, leaving most of the industry to the private sector. A food security expert for Africa’s eastern and southern regions told the ENACT organised crime project that the Kenyan public is hungry and at risk of consuming unhealthy food that is expensive. Kenyans spend almost 60% of their disposable income on food, compared to South Africans who spend less than 20%.

Despite numerous government interventions to date, the road to Kenya’s food self-sufficiency is a long one. The high costs of agricultural inputs, the import cartels, government corruption, state-embedded criminality and unmanned entry points all contribute to the problem. Addressing the issue will take more than passing and implementing regional laws, of which there are already many. The seemingly endless government committees, task forces and inquiries are also having limited effect.

Inspectors and law enforcement agencies need to improve their detection of substandard goods in order to disrupt the criminal cartels. But for this to happen, there needs to be political will by the government to reduce clientelism and corruption within these agencies.

Mohamed Daghar, Researcher, ENACT project, ISS

This article was first published by the ENACT project.

With a membership of over 20,000 Urithi Housing is perhaps the biggest housing scam in Kenya’s history with up-to Sh10Bn of investors money he I g been gobbled by a heartless and fraudster management that sold heavenly dreams to gullible Kenyans who only had a dream of owning homes.

As we had told you in previous articles, Urithi sold hot air and after a lengthened and stolen grace period, the chicken is coming home to roost. There are saddening stories of many who invested their life savings, completed payments and have never been handed over the promised houses. In fact, most have never seen with their own eyes, the land and houses that they paid for. A few of the projects that they hit the grounds on are now lying idle either unfinished or completely written off before occupation.

Tired with excuses from the management that has perfected the art of buying time and selling excuses that don’t hold water as they keep on advertising and trapping other gullible Kenyans who don’t do due diligence, a group of tired investors have come together and said enough is enough.

While keeping their cards close to their chest, Kenya Insights is informed that the group is planning to stand countrywide demos and expected to stretch to the diaspora, a market that the scammers heavily looked into and trapped many who sent millions to the air.

While the besieged management led by chairman Samuel Maina has relentlessly tried to reach out to the fired group to calm down their toes, in a recorded phone call between the chairman and a leader of the whistleblower group, his explanations are not buying anything and infact fueling the fire. He simply can’t explain how the billions sent to the Sacco disappeared and no projects implemented as per the agreements.

Members of ‘Urith Scams’ are now saying they’re not taking anything less than their money refunds, handing over of the projects as they’re are and more importantly want the management held accountable including jailing.

While it was anticipated for the media to highlight the plights of the frustrated investors, the matter seem to have been met with cold water with suspicions that the media has been compromised not to air the interviews already held. We’re told royal media and media max journalists had been on the story that has now vanished since the start of filming over two weeks ago. This has left the defiant scammed investors to pursue the demos way and filing of reports with the DCI. This is expected anytime soon.

Urithi has closed all their branches countrywide and there are reports that the company is also being auctioned over debts.

Members are saying the management is totally incognito with the chairman said to have gone into hiding and only making limited online appearances.

We’ve been told of many disheartening stories of investors who lost most for Urithi. A story is told of a lady who lost her sight after going into severe depression on realizing he had been duped by Urithi. And that’s just a tip of the iceberg. Below are some of the shared confessions of scammed investors, shared on the common platform.

“Samuel Maina and UHCSL have sold “air” to thousands of hardworking fellow Kenyans from all corners of our Republic. For the projects actually on the ground, they have failed to deliver despite having our billions at their disposal. And worse, even the stalled projects are built on grossly inferior quality materials and workmanship..This is a National scam – not a small matter.” One member wrote.

“Personally Urithi has my Sh9.4m which l invested as part of my retirement plan. I retired 2 yrs ago and nothing from my investment….you can imagine what l am going through without a salary and no returns from my hard earned money.” Another disappointed member writes.

“I am Stephen…. Invested in two maisonnettes at Juja Gem….  5.3million …  Paid within 10months,  as per the sales agreement. I have been to Urithi offices so much the guards are tired of seeing me. The CEO Julius Macharia blocked me.  The Juja Gem project manager  Liaison manager Jane blocked me. The sales guys Hilary Kimei does not pick or return my calls anymore. Bringing curses upon them and upon their children and children’s children….  Because of greed. Stealing from everyone with no ounce of regret.” Another investor says.

“I am Benard invested in Gen Juja, I joined 2017 and I have paid 1.3m, I bought a house which is Incomplete up to now and ever since that time only stones standing which makes it weak and not safe to leave in even if finished.”

“Am a widow who took a Sacco loan of 1.6m in 2016 n invested in those sketchy skeleton structures having toilet facilities in the sitting room with no kitchen area  called OTG, all my children r out of school as i live in some ramshackle Structure that i can barely afford the rent, yet maina is leaving in a mansion in Garden Estate, n his children going to international schools,he owns properties worth over 400million along Thika road,surely is this man human?” Another member wrote.

“I already paid Urithi 1.21m for a house in their Highway Gem Gardens and a land in Malindi  through a loan in 2016. I was hoping to stop renting and live in my own house.. I only have papers to date.”

“I am Joyce… I invested with Urithi Ruiru Ridges 4m in 2017. We have been tossed around since then with nothing to show. No piece land, no title deeds. We were first shown a chunk of land on Kiganjo Road then later shifted to a place near Oakland which belongs to somebody else.”

“My Name is Floridah.. I invested in OTG  2016 paid 1.6m and Extra 40k for transfer of documents from OTG to my name once the houses are complete still serving loan, with nothing to show. I wish I knew I would built my own house with such amount.”

“Hi! I’m Mbogo. In 2016, I paid 1.6m in cash for a 2br apartment at Joska (Osteen Terrace Gardens). Up to now, all I get are empty promises.”

“Am Jane, I invested in Gem Juja and OTG, paid 4.35m then stopped 2018 when nothing was happening. My bal 230K. Maina messed up my retirement. Am current paying rent and it’s so hurting.”

“Am Francisca I invested 1.6 m with urithi  in 2016 in purchase of otg apartments, i took two loans from a bank and a Sacco to pay them fully, and am still servicing the loans up to date and i have only receipts to show and have been up and down following for my sales agreement with no success. Nimetanganga tanga kwa hizo office zao hadi nimechoka. What I need now is my money back.”

“Hi juz joined, I am from Ngata 3project,i bought 2 plots from very hard earned money in 2018,together with the other members it was a 5 acre land but urithi had only paid 1 acre, the owner waited to be paid for the agreed period of payment and when it passed he sold 3 acres so members have only receipts and no land, in April the the chairman subdivided the one acre to 8 members so the rest of us are still stranded not knowing whats the way forward, Mr Chairman some houses are breaking or are broken because of this, some of us are sick, we really need our land.”

“I took my pension and a bank loan all amounting to 750k. At first I was to get a house at tuala, then  I was told my money is not assigned to any project. So I was told to do a contract for otg 2, since 1 was full. This was April 2018. In the contact one clause is that if my payment is late I pay a certain penalty. I realised this is way to decimate my investment. In Oct 2018 I broke the contract in the way that was legal. They promised to refund my money back by April 2019, Nothing up to date. Empty promises,. How many times have I cried at ridgeway?”

“I had to sell my car to pay part of my loan n am a single mother now struggling to make ends meet with my rent, Maina n everyone who took our money u should know that God doesn’t sleep or slumber your days are numbered.”

“My name is Sarah… I invested with Urithi 2017  and paid Ksh540,000  for Konza standard gauge view project it’s now 3years since I completed the payment for the two plots.. and until now the titles are not issued…”

“I invested 1.8 million with urithi back in 2016 trying to buy a house and 2acres of land in Malindi which up to now I only hold urithis receipts. Am servicing a loan in many banks and one bank was almost taking my everything early this year bcoz of that loan. Mark you am a widow trying everything I can to sustain myself. I had planned to live in that house so that can be able to service my loan. Now am left with life full of regrets any am in total depression.”

“Am Jane. First I invested in the Ruiru Ridges  and Otg apartments.(total of ksh 3,200,000). Part of this money was from a loan from my sacco which am still servicing and my savings..Later I invested in  Juja Gem mansionets ksh. where I deposited ksh2,080,000  i was paying in instalments of even 10thousand. I stopped paying after realising that nothing was coming up after visiting the site. In total ave invested a total of ksh 5,280,000. I later realised that Ruiru ridges is pure air and both Otg and Juja gem mansionets have all stalled. I have made countless visits to Urithi’s office s in Thika and Ridgeway’s only to be tossed here and there before they closed the offices.Guys,pls pray for me before I commit suicide.”

The stories are many and as sad as they come. Urithi is not the first and won’t be the last to leave many families broken, many suicides, broken dreams and left many poorer. The system unfortunately, cushions these same crooks, Gakuyo of Ekeza who scammed many billions is now economic advisor in Kiambu county for Governor Nyoro. The crime ring always cover each other.

The tradition of saccos, off plan and other alike scammers getting away with these crimes need to be stopped. Otherwise if nothing different is done, it’s another day another crime.

Please invest in due diligence before investing want project sold as a getaway from poverty. Help your people from getting scammed by doing the donkey job of background check.

Maina as you enjoy your drive in an SUV having a good time at home with your children this quarantine, someone outside their has a broken family, depressed and contemplating suicide. All this because they trusted you with their money and you vanished with it. A smooth criminal. This must come to an end.

 

Senate Standing Orders gives the Senate two options on how to proceed with the impeachment of a governor.

It can either appoint a special committee comprising 11 of its members to investigate the matter, or investigate the matter in plenary. Already the Senate has set up an 11-member committee to investigate the impeachment of Waiguru.

The committee includes Senators Abshiro Halakhe (Nominated), Michael Mbito (Trans Nzoia), Mwangi Githiomi (Nyandarua), Beth Mugo (Nominated), Anuar Loitiptip (Lamu), Philip Mpaayei (Kajiado), Cleophas Malala (Kakamega), Beatrice Kwamboka (Nominated), Stewart Madzayo (Kilifi), Judith Pareno (Nominated) and Moses Kajwang’ (Homa Bay).

Her Senate ‘trial’ will uphold or overturn her impeachment.

A report by the Public Procurement Regulatory Authority (PPRA) has lifted the lid on the multi-million tendering mess, part of which MCAs relied on to send Waiguru packing.

The PPRA report dated May 27 details how the Kirinyaga Executive breached key procurement laws, sometimes settling on the highest bidders at the expense of the lowest bids and taxpayers.

The questionable contracts include a Sh19 million tender for the upgrading of Kagumo Market; Sh14.5 million to procure a top-of-the-range Toyota Land Cruiser Prado as the governor’s official vehicle and Sh8 million contracts for the supply of pharmaceuticals.

The other tender questioned is for the design, development, installation and commissioning of an integrated hospital information management system valued at Sh50.6 million.

Even before Kirinyaga MCAs moved to unanimously impeach Waiguru on June 9, PPRA had threatened to refer the county to anti-graft authorities.

“You are required to respond to the observations mentioned above by 15 June, 202o. Failure to which the Authority will finalise the report and take further action pursuant to Section 38(1)(c) of the Act,” PPRA warned.

However, the Ethics and Anti-Corruption Commission has launched separate investigations into Waiguru’s administration, including claims she was irregularly paid travel allowances amounting to Sh10.6 million.

The county settled on the highest bidder without giving satisfactory explanations. This was cited in the upgrading of Kagumo Market where the evaluation committee settled on M/s Master Rock Construction Company Ltd despite not being the lowest bidder.

The lowest bidder was M/s Joames Investment Ltd which had quoted Sh19,145,740. Master Rock Construction Ltd on the other hand quoted Sh19,774,143 which was 628,403 more.

During the impeachment motion, the MCAs accused Waiguru of influencing a Sh8 million non-pharmaceuticals contract to Two Rays General Suppliers, which did not offer services to the county.

In their report, PPRA noted anomalies in the tender stating a number of crucial documents were never issued to the Authority to ascertain if the products were indeed delivered.

“The letter appointing inspection and acceptance committee, inspection and acceptance report, delivery note payment documents of Sh8 million to M/s Two Rays General suppliers Ltd were not availed to the Authority,” the report reads.

This was contrary to Section 34 of the Act which provides that “a public entity shall provide the National Treasury or the Authority with such information relating to procurement and asset disposal as may be required in writing.”

The PPRA also faulted the Kirinyaga county government for a skewed tendering process in the design, installation and commissioning of the integrated hospital information management system. The county mixed two procurement methods – Open Tender and Request for Proposal- in disregard of the law, it said.

The report further reveals that the accounting officer did not okay the decision to award the Sh14.5 million governors official vehicle tender to Toyota (K) Limited.

“The award letter to M/s Toyota (K) Limited was signed by Mr Patrick Mugo, Chief Officer, Finance and Economic Planning and the Accounting officer on 23rd August 2019 without any evidence of the delegated Authority from the County Executive Committee Member, Finance and Economic Planning,” the report states.

In February this year 2020 — A forensic investigator traced Sh3.4 billion in eight bank accounts linked to former Imperial Bank managing director Abdulmalek Janmohamed who is accused of being behind an elaborate fraud scheme that robbed the lender of Sh34 billion over a period of 13 years.

The Kenya Deposit Insurance Corporation (KDIC) told the court that the accounts were opened using fictitious names under the direction of Mr Janmohamed, who died in September 2015—just a month before the lender was placed under receivership.

Court documents show that the late Janmohamed and his associates used 12 companies to open accounts at Imperial Bank into which they deposited massive amounts that were then moved out of the bank before they were immediately closed.

The transfers were made by a section of the bank’s top managers, including current managing director Naeem Shah and his deputy, James Kaburu. The duo would then manipulate software systems at the bank to ensure the dummy accounts disappeared from the records.

Forensic investigators, FTI Consulting, uncovered the eight banks accounts linked to Mr Janmohammed that were built with cash stolen from Imperial Bank.

The accounts were registered as Gulshan Account, which has Sh364 million, Ali Shah account (Sh264 million), Barkat Khan account (Sh376 million), M Khan account (Sh341 million), B Mohamed Account (Sh337 million), Jionesh Shah account (Sh50 million), Zulfikar account (Sh376.5 million) and Hanscombe/Angelica account (Sh1.3 billion).

The accounts were in the names Zulfikar Jessa, Zarina Mohammed, Angelica Industries Ltd and Barkat Khan, which court documents show were fake names.

“The bank claims jointly and severally against the deceased estate and the 2nd, 5th and 6th defendants the sum of Sh3.4 billion which amount was illegally and fraudulently received in trust from the SB accounts, which accounts is made up as follows,” says KDIC in court documents.

Court documents did not reveal the banks hosting the eight accounts, which have nearly 10 percent of the cash believed to have been siphoned from Imperial Bank.

Proceeds of the fraud were mainly invested in real estate properties, offering fresh insights into the role that corruption and crime plays in driving Kenya’s housing market.

Mr Janmohamed left a vast estate, including prime real estate properties, shares in blue chip companies and loads of cash in various banks. The suit has also revealed a gigantic empire that Janmohamed left behind, which includes a five percent stake in Butali Sugar Mills and another five percent of Imperial Bank.

Other prominent companies he had a stake in are Old Mutual and Apex Securities. He also had shares in Sandview Properties, Allgate Limited, Serenity Limited, Plymouth Holdings, Upperview Properties, Downtown Holdings and Nature Stone Queries.

One of his companies, City Park Properties, owns office premises that rake in a total of Sh447,000 monthly. The Imperial Bank founder’s cash was saved in four bank accounts, one each at I&M Bank and National Bank of Kenya, and two at Standard Chartered Bank.

The Standard Chartered accounts were in foreign currency. Mr Shah and Mr Kaburu, despite revealing the scam to the Central Bank of Kenya (CBK), had not been spared as they were among the respondents in the suit. They admitted to making the illegal transfers but claim they did it on instructions from Mr Janmohammed.

The list of companies used in the fraudulent scheme includes E. Tilley (Muthaiga) Limited, Primecatch Exports, Mara Fish Packers, J Fish Limited, Victorian Delight, Ruby Red Limited, Value Pak Foods, From Eden Limited, Aqualite Limited, Marmo Granito Mines from Tanzania, Uganda’s Marmo Marbles and Fishways Limited.

E. Tilley (Muthaiga) Limited alone admitted to receiving Sh10 billion from the bank and has expressed readiness to return the loot.

~~~~~~~~~~~~~~~~~~~~~~
Status Quo

CBK Boss Patrick Njoroge survives wrath of   East Africa Court of Justice (EACJ) over Imperial Bank Limited Case.

The Bench of three judges of Principal Judge Monica Mugenyi, Audace Ngiye and Charles Nyachae ruled that it saw no reason to compel Dr Njoroge to appear as a witness at the Arusha-based court because he was not the custodian of the documents sought to be produced hence spared the agony of appearing before the East African Court of Justice to shed light on fraudulent activities at Imperial Bank Limited (IBL), which led to the collapse of the lender in 2015.

In the case, Pontrilas Investment Limited, a depositor at IBL, has accused CBK of laxity or possible involvement of its officials in the Imperial Bank fraud.

The depositor wanted Dr Njoroge called to produce documents and shed light on the regulatory role played by CBK and why the banking regulator failed to discharge its role as required.

The CBK placed the bank under receivership in October 2015 after the board of the mid-sized lender alerted it about alleged malpractices.

Former executives of the collapsed bank have been charged with involvement in a conspiracy to defraud the institution and depositors of Sh29 billion.

The judges said some of the documents sought from the Governor by Pontrilas Investment Limited were in the custody of CBK’s supervisory department, which has competent officers to bring them to court.

The judges also faulted the company for failing to state with specificity, the documents they wanted Dr Njoroge to produce.

“In our view, such a broad categorisation of the documents depicts non-knowledge of the specific documents required, lending credence to the possibility of a fishing expedition,” the court said. Pontrilas said the CBK had failed to meet its promise of recovering lost deposits, arguing it was doubtful about its savings.

The firm argued that Dr Njoroge’s presence would enable the judges understand the issues before court in relation to its regulatory functions and failures.

In June 2016, Imperial Bank directors sensationally claimed that senior CBK officials, who were complicit in fraudulent transactions, had become an obstacle to the bank’s restructuring and revival as part of a cover-up.

A Kenyan crime family residing in Uganda is on the run after their racket was busted. Hassan Majed and Hasma Majed booker under CHA/RB/2406/2017 in Tanzania are being sought by police for theft and robbery.

According to information availed to Kenya Insights, The Ugandan police arrested the mother of Haisam, it now appears they work in the cartel as a family including a sibling Asfura Dhalal or Talal. Their passports were confiscated by the authorities.

Sources talking to Kenya Insights, intimates that they gang has been specifically targeting forex bureau and use unexplainable tactics(assumed to be witchcraft) to blind and rob cash from the counters.

According to documents and footages seem by Kenya Insights, and in possession of the Ugandan police. The gang has been taped robbing Access Forex Bureau, Capital Forex Bureau, Jetset Forex Bureau, Paksa Forex Bureau Kabagala, Destiny Forex, Guild Frank Forex, Sky Forex, and Lloyd Forex all in Uganda.

The gang has run into trouble with authorities in Uganda numerous times and are continuously saved by the Kenyan embassy lawyers in Kampala. According to documents seen by this site, Advocate Mark Muhami who’s attached to the Kenya’s embassy has been protecting and bailing them out in a move that our source alleges is a conspiracy.

Questions are now arising as to how the Kenyan embassy lawyers are in the frontline in protecting documented criminals in Uganda.

Information that we have is they were initially in Kenya and are currently using trucks to sneak into Uganda where they’ve manipulated the system and will get refuge.

The authorities can use the below identifications to detect and detain the suspects.

 

By Kevin Motaroki

For years now, the French petroleum company, Total SA, through its Kenyan subsidiary, Total Kenya, has subjected its dealers to unfair and unethical business practices that have gone on unabated. This has led to many business owners operating under Total to run into avoidable losses or close shop.

Both Financial and Young Dealers told the Nairobi Law Monthly they are adversely affected by the unfair, intimidatory, and monopolistic practices by the petroleum company. Although they have raised issues around the hardships they face with the French petroleum giant, they have not been attended to.

Kenya is a renowned haven for foreign investors, whereby the government sides with monied corporations and individuals against its hardworking taxpayers; none exemplifies this reality better than Total Kenya. The oil giant has co-opted the leadership of the Energy and Petroleum Regulatory Authority (EPRA), which acts only at its behest to the detriment of ordinary Kenyan. Despite the numerous complaints that dealers have raised, Total Kenya seems always to have its way, perhaps aware that no complaint will be acted upon by the regulator.

Illegal charges and outright theft

The government, through EPRA, sets an operational framework that pegs wholesale and retail prices to regulate the oil business. Currently, the fixed fuel retail margin per product is Sh4.14 per litre, to which all petroleum retailers are entitled. However, dealers under Total do not enjoy this margin.

Following the increase in margins by EPRA, the dealers were subjected to false, additional charges to their fuel orders in a brazen bid by the marketer to cut into the margins. Among additional unsanctioned charges levied are Digital Tools, Research and development charges at Sh0.35 per litre, and HSSEQ – (Safety), Training and Assistance charges at 0.39 per litre.

Secondly, whenever fuel is transported from the port or depot, some of it is subject to be lost through evaporation, theft or spillages. Total Kenya imposes such fuel losses on the dealer, yet dealers have no involvement in the dispatch and transport of the fuel at any point; this is solely the prerogative of the marketer. This is a long-running bone of contention between Total and dealers. Why should dealers bear costs that have no bearing to them?

The extent of the losses ranges between 75 and 350 litres per order, which is a significant loss when charged on an individual dealer, who also has to contend with many other illegal levies imposed by the French giant. For perspective, a loss of 300 litres is equivalent to Sh33, 600 per order. Most stations order twice weekly; this equals to Sh268, 800 per month, or a cool Sh3.2 million per year! This is how much Total Kenya steals from just one dealer annually.

Other losses arise from leaking fuel tanks, whose repair the marketer is usually never willing to undertake, never mind that it is their responsibility; one would be lucky to have repairs done after months of following up, pushing, bribing and begging.

Sh4.14
Allowable margin that OMCs can charge dealers. Total charges additional levies illegally.

Intimidation and coercion

To eat further into dealer margins, Total has made addendums to existing contracts, which they have then forced dealers to sign – the alternative is having your station taken over forcefully, or for your agreement to fail to be renewed once it expires. It is a vicious cycle that keeps hardworking Kenyans enslaved to the global marketer. There are never negotiations before the multinational arrives at and implements such additional charges. The dealer is compelled to sign just to keep business afloat; sadly, many have had to shut down because of artificially-induced loss-making, abandoning millions, and years’ worth of investment.

If you make it through, it is a painful world of fees upon fees; even then, complain too much, and they take back your station under flimsy made-up reasons. For instance, it’s Total’s policy that a dealer should not run dry for any reason. The thing is, Total is responsible for delivering orders; a dealer makes an order through the procurement department, which then delays it, and gets a dismissal letter from a different department in the same company! You cannot hope to win.

There is also a mystery customer scheme. In a program set to ensure standards set are met across their stations, unidentified customers are sent by Total Kenya to check whether stations are compliant. If the marketer wants you out, it will fail your station on purpose and claim you are not operating as per their set standards and procedures. Meanwhile, because you do not know who made the complaint or its nature, you cannot hope to defend yourself.

Another method they use is rent. All dealers share their profits and losses with the global company. Whenever there are fluctuations in the marketer’s revenue, it imposes arbitrary rent increments on dealers to recoup and balance the sheet. So, here is a scenario where a dealer is barely breaking even – for conditions that Total, out of sheer greed and bad faith, manufactures in the first place – but they are slapped with additional rent charges, effectively forcing many out of business. Rent variations are governed under in Marketing Level Agreements, and dealers have to sign to agree to that upfront. When the decision is made to increase the rates, there is not much a dealer can do to wiggle out.

3.2M
Amount, in shillings, Total potentially makes annually off of one station through passing fuel delivery losses to its dealers.

Young Dealer’s empowerment paradox

In a well-played Corporate Social Responsibility effort, Total instituted the Young Dealer’s program, to empower managerial staff in petrol stations. The program’s mandate was to identify well-performing employees as potential future dealers and nurture them, through a five-year into owning and running petrol stations of their own. To start them off, the multinational issues stock to the ‘young’ dealer and terms it as debt. The same debt is the working capital for the young dealer; once they finish repaying their debt, the marketer is then supposed to hand over the station to the dealer, making them independent financial dealers.

Accounts of at least six Young Dealers, some of whom shared documents of ongoing court cases, show that the dealers have found themselves in a vicious debt trap that has reduced them to modern-day slaves. Many of the promises made by the marketer, even when put down in contracts, are bogus at best, and fraudulent at worst. Many tell of facing an uphill task of generating substantial revenues to run the station while reducing their debts. Enticed by the promise of financial independence, they have toiled away for years only to end up with nothing.

So what exactly is going on? It is a tale of unending woes.

Young dealers face the same challenges as financial dealers – unscrupulous charges on fuel orders, artificially-generated losses, arbitrary rent increases, and so on. The Young Dealers are also not allowed to offer equity, rendering them unable to compete for big corporate business.

Perhaps the most insidious tactic is that whenever they are making tidy profits, Total Kenya has always found a way to force them to move to less profitable stations. There is not another possible explanation for this except that the marketer is determined to keep them in debt. And when, by some stroke, one completes their terms and repaid their debt, they are taken round in circles, made to sign new contracts with hidden clauses and finally denied what is rightfully theirs, their initial contracts notwithstanding.

The last trick in the book is one we have described early on in this article. Whenever one has passed through every obstacle erected and graduated to become a financial dealer, a list of additional, illegal fees and orchestrated loss-making strategies are unleashed, compelling the dealers to give up the loss-making stations.

Since its inception in 2009, only five Young Dealers have been graduated. Out of these, three have had to give up their stations.

The Nairobi Law Monthly ran an expose on this issue in the April edition, after which newly-joined Twitter bots, seemingly hired by the marketer in a bid to redeem its image, took to commenting what was ostensibly a variation of the same script, to announce to Twitter Universe that we had lied; that they had graduated successfully from the Young Dealer Programme with the minimal or no fuss from Total, and that they were proof of the programme’s success. We asked them to name the stations they own so we could verify and subsequently publicly apologise. Not one responded.

Declined to comment

We also understand that Young Dealers are currently being made to sign already drafted success stories of the Young Dealer Program or risk losing their many years of investment – these are entrepreneurs who haven’t graduated yet, and who have everything to lose. The object of the new contracts is to say they have not been asked to pay additional levies, that they have not been transferred to stations at non-prime locations, and that they have nothing to complain about.

Before running this article, we reached out to Total Kenya and EPRA; both declined to acknowledge our inquiries or comment. EPRA is not sleeping on the job; that would be an understatement. The regulator, from our attempts to engage them and from testaments by dealers, seems to be working in cahoots with the marketer. The dealers speak of lacking a voice as they operate in fear of losing their investments in their own country due to unfair business practices orchestrated by an influential foreign investor.

Indeed, the impunity of Total Kenya and petroleum firms operating in Kenya, in general, has become the stuff of legend because they have and own collaborators both in the corridors of power and outside of it, who protect these companies and their officers for personal gain. The loser – every single time – is the hardworking Kenyan.

The social and economic effects of such long-term suppression are regular loss of livelihoods, disenfranchisement, and dispossession. The untold – incalculable – suffering on the part of dealers and their families, including depression and broken homes, is unimaginable.

Such is the bleak conclusion to the second instalment in a continuing series – on continued exploitation and subjugation on a scale that is difficult to fathom or swallow.

By NLM Writer

The Anti-Corruption and Economic Crimes Act (ACECA) provides circumstances under which a person is required to explain how he or she acquired funds and other assets. This has commonly been referred to as unexplained wealth orders.

The principle of unexplained assets is based on the aspect that a person who has assets that are not in any way comparable to his known legitimate source of income and the fact that he or she cannot not explain satisfactorily the source of the assets. With what you have and own, have you earned it?

When a public official cannot explain his or her asset that may be regarded as unjust enrichment. Article 20 of United Nations Convention Against Corruption (UNCAC) defines illicit enrichment as a “significant increase in the assets of a public official that he or she cannot reasonably explain in relation to his or her lawful income.” UNCAC was signed and ratified by the Republic of Kenya of 9th December 2003.

In Stanley Mombo Amuti v Kenya Anti-Corruption Commission [2019] eKLR (the Amuti’s case) where the Court of Appeal stated that “Entrenched in the Act is the concept of “unexplained assets” which is a legal innovation to combat the vice of “doubtful source of wealth, money laundering and suspicious corrupt practices.” Underlying the concept is the theme “You fail to satisfactorily explain the lawful source of assets, you forfeit it.”

Section 55 of ACECA provides for the basis of forfeiture of unexplained assets. Section 55(2)(a) provides that the Ethics and Anti-Corruption Commission (EACC) may commence proceedings under the section against a person if, after investigation, the Commission is satisfied that the person has unexplained assets. The process envisioned by Section 55 of the Act is regarded as a non-conviction based asset forfeiture.

Section 2(1) of ACECA defines “Unexplained assets” means assets of a person – “(a) acquired at or around the time the person was reasonably suspected of corruption or economic crime; and (b) whose value is disproportionate to his known sources of income at or around that time and for which there is no satisfactory explanation.”

Section 2(1) of ACECA offers a clear threshold in making the determination of what constitutes unexplained assets.

According to a report by EACC for the financial year 2018 – 2019, the Commission recovered public assets amounting to Kshs. 3,187,821,838.80/= during the period under review. The figure included Kshs. 317,000,000/= recovered from Jimmy Kiamba in an unexplained assets.

The main question in unexplained wealth proceedings that court must resolve is what should be believed between mere suspicion and persuasive cogent evidence that property was unlawfully acquired.

The Court of Appeal in the Amuti’s case summarized the threshold for existence of unexplained assets as per Section 2 and 55(2) of ACECA to be “i. There must be set time period for the investigation of a person; ii. The person must be reasonably suspected of corruption or economic crime; iii. The person must have assets whose value is disproportionate to his known sources of income at or around the period of investigation and iv. There is no satisfactory explanation for the disproportionate asset.”

The Commission upon completion of investigations contemplated under Section 55(2)(a) of ACECA it finds that a person has unexplained assets, is required to issue a person under investigations with a statutory notice as per Section 26 of ACECA.

Section 26 of ACECA requires a person to offer an explanation as to how the assets under investigations were acquired. The onus is therefore on the person to clearly explain how he or she acquired the assets.

In Assets Recovery Agency v Pamela Aboo; Ethics & Anti-Corruption Commission (Interested Party) [2018] eKLR Hon. Lady Justice Hedwig I. Ong’udi held that “Where the person against whom allegations have been made does not give a satisfactory explanation to rebut the allegations, it means what has been presented is not challenged.”

According to the Court of Appeal in Amuti’s case stated that Notice under Section 26 is a civil investigatory tool aimed at collecting information and data from a person suspected of corruption or economic crime. The Court further stated that the Notice may issue regardless of when the property was acquired.

One of the critical aspect in dealing with unexplained assets is whether one must be facing criminal charges or proceeding for court to seize or order forfeiture of the property.

Section 55(3) of ACECA provides that proceedings under the Act shall be commenced by Originating Summons and the proceedings are of a civil nature where the standard of proof is on balance of probability. The Commission during the proceedings is not required to prove that there was criminal conduct on the person who is under investigations. Hence in such proceedings, the question of innocence does not arise.

In Amuti’s case the Court of Appeal held that “The concept of “unexplained assets” and its forfeiture under Sections 26 and 55 (2) of ACECA is neither founded on criminal proceedings nor conviction for a criminal offence or economic crime. Sections 26 and 55 of ACECA are non-conviction based civil forfeiture provisions. The Sections are activated as an action in rem against the property itself. The Sections require the Anti- Corruption Commission to prove on balance of probability that an individual has assets disproportionate to his/her legitimately known sources of income. Section 55 (2) of the Act make provision for evidentiary burden which is cast upon the person under investigation to provide satisfactory explanation to establish the legitimate origin of his/her assets. This evidentiary burden is a dynamic burden of proof requiring one who is better able to prove a fact to be the one to prove it…”

The second common criticism against the provision of Section 55 ACECA is that infringes on a person’s right against self-incrimination as enshrined under Article 50(2)(l) of the Constitution. Further, that the Section offends Section 107 of the Evidence Act that provides for burden of proof.

Section 55(2)(b) requires EACC to ensure that a person who is under investigations for unexplained assets to be afforded a reasonable opportunity to explain the disproportion between the assets concerned and his or her known legitimate sources of income. If the Commission is not satisfied with the explanation, it may file proceedings under the section.

In Jimmy Mutuku Kiamba & 3 others v Ethics & Anti-Corruption Commission & 4 others [2018] eKLR Hon. Lady Justice Hedwig I. Ong’udi stated that, “64. Sections 55 and 56 of the ACECA have provision for a person suspected of having corruptly acquired assets to give an explanation. It cannot therefore be said that they are condemned unheard in violation of Article 50 of the Constitution. Once the matter is filed in court, the person is again given an opportunity to present his/her case.”

The third common criticism is that Section 55 of ACECA offends the right to property as enshrined in Article 40. However a clear reading of Article 40 shows that there is a clear rider on the right to property. Article 40(6) provides that the rights under Article 40 do not extend to any property that has been found to have been unlawfully acquired.

The Court of Appeal in the Amuti’s case held that “The right protects the sweat of the brow – it does not protect property acquired through larceny, money laundering or proceeds of crime or any illegal enterprise. When an individual is alleged to have assets disproportionate to his known lawful source of income, is asking such a person to explain and account for the unexplained disproportionate assets a violation of the constitutional protection of the right to property” The answer is in the negative. There is no violation of the right to property if an individual is requested to explain the source of his assets that is disproportionate to his legitimate source of income … Those who acquire property unlawfully cannot claim protection provided by the legal system. It is in this context that Article 40 (6) of the Constitution provides that protection of the right to property does not extend to property that has been unlawfully acquired.”

The Court of Appeal decision in Amuti’s case was challenged at the Supreme Court and it was dismissed the appeal for want of jurisdiction which means that the decision by the Court of Appeal was proper. Hence settling with finality on the law in relation to unexplained assets.

In a Press Statement issued by EACC after the Supreme Court decision, the Commission through the Chief Executive Officer (CEO) Maj. (Rtd) Twalib Mbarak, welcomed the decision terming it as ushering a new dawn in the fight against corruption in Kenya and strengthens jurisprudence on lifestyle audit.

Corruption is a cancer that has affected all of us and one of the ways to deal with it is by utilizing the principle of unexplained wealth order which is a critical tool.

There is no doubt that the Amuti’s Case has set a precedent and a proper basis for dealing with public official who use their position to unjustly enrich themselves. The decision will have a huge positive impact in dealing with corruption matters. The case has in do doubt given fresh impetus to EACC to go after the ill-gotten wealth.

It is clear that one of the greatest weapon in fighting graft is ensuring utilization of Section 55 of ACECA by EACC. Having unexplained assets/wealth may be equated to unjust enrichment. How did a public official whose salary is known acquire the wealth he or she has? Does the wealth exceed his or her known source of income?

The aim of unexplained assets is to ensure the same is recovered and to ensure that those who engage in corrupt activities do not in any way enjoy their illegally gotten wealth. It is not simply a legal question but a moral one, to account for what you have and own.

We should never as Kenyans allow the law to be perverted by unscrupulous individuals to their personal selfish gain. Corruption has millions of countless victims who must and should always have a voice.

It is therefore invigorating to see EACC actively utilizing the various provisions of the law on unexplained assets for the sole purpose of recovering stolen Kenyan wealth. It is with no doubt that Kenyans are looking forward to EACC seizing more assets for the single sake of public good. (

Africa Star Railway Operation Company which is majorly owned by China Road and Bridge Corporation (CRBC) was contracted in May 2017 to run the passenger and cargo trains on the SGR. Africa Star manages the ticketing system, landing and offloading of cargo and collection of passenger fares, including non-cash revenues including M-Pesa.

The National Assembly’s Budget and Appropriations Committee (BAC) said and warned that Kenya Railways has not paid Sh38 billion to Africa Star Railway Operation Company Ltd, the Chinese company contracted to operate the trains hence Madaraka Express passenger and cargo trains risk being grounded over Sh38 billion in unpaid bills.

In its report on the 2020/21 Budget, the committee chaired by Kikuyu Member of Parliament Kimani Ichung’wa said that failure to pay the money could see the company pull out of the daily operations, a move that could ground the passenger and cargo trains.

“Pending bills arising from operations of the standard gauge railway have accumulated to Sh38 billion and this may force the operator to pull out of the daily operations of the project,” Mr Ichung’wa said.

Kenya Railways, the infrastructure owner, however said that it had not received any protest letter from Africa Star, adding that it has also not seen any communication from Parliament over the matter.

“As Kenya Railways, we have not received any communication from Africa Star. We have also not received the report from Parliament and at the moment we cannot comment,” Kenya Railways said.

Kenya railways have always disputed the pending bills claim ever since. 

Under the contract between Kenya Railways and Africa Star, the operator has the right to manage the ticketing system and any associated software and hardware.

Africa Star can only foot repair bills of less than Sh100,000 under the contract that requires Kenya Railways to pay the maintenance fees. Further, the operator cannot be held responsible for any legal claims from third parties involving damage to property, death, illness or personal injury.

The Sh38 billion in pending bills add to the Sh420 billion that Kenya borrowed to build the modern line from Mombasa to Nairobi and purchase of engines and coaches. They also pile the woes facing the Madaraka Express amid struggles to meet revenue targets through the passenger and cargo trains, which fell by eight percent in the four months to April from similar period last year.

Data from the Kenya National Bureau of Statistics shows that the SGR cargo and passenger trains generated Sh3.92 billion in the four months to April, from Sh4.27 billion in a similar period last year.

The data shows that cargo revenues fell to Sh3.57 billion in the period under review from Sh3.72 billion while the passenger trains raised Sh354. 9 million in the four months to April from Sh548 million last year.

The revenues are expected to fall further following suspension of passenger services in April to curb the spread of the coronavirus disease. It is still uncertain when the government will ease restrictions that were imposed to curb the spread of the respiratory disease.

Last year, the government through the Kenya Ports Authority (KPA) and the Kenya Revenue Authority (KRA) ordered that all imported cargo be transported aboard SGR cargo trains effective August last year.

The decision that was meant to shore up revenue collections by the SGR, however, led to job losses for truckers, which culminated in numerous protests.

Operation costs of the SGR are estimated at Sh12 billion a year and the underperformance in revenues prompted the directive on cargo transport from the Port of Mombasa to Nairobi and beyond.

Transport and Infrastructure Secretary James Macharia has severally defended the cargo transport directive, saying it was meant to improve efficiency at the port in line with international requirements.

Kenya Railways also increased passenger fares from Sh700 to Sh1,000 for first class travellers in 2018 in an effort to shore up the trains’ revenues. This was followed by scrapping of the subsidy offered to children between the ages of three and 11 that had been in place since May 2017.

Kenya will start upgrading the old ‘metre gauge railway (MGR) line from Naivasha to Malaba next month at an initial cost of Sh3.5 billion. The line will be linked to the SGR line at Naivasha. The upgrade that is set to be completed in 12 months is part of the government’s plans to move cargo destined to Uganda and the neighbouring countries from the Port of Mombasa.

What made the Anglo Leasing scandal so extraordinary in the Kenyan history? First, it involved 18 separate contracts entered into by the government (13 under Moi’s regime and 5 under Kibaki’s regime). The contracts generally dealt with government procurement in the security sector, and took the form of lease finance and suppliers’ credit agreements.

Supplier credit agreements are particularly accommodating of countries working towards increased development, such as Kenya. Most of these contracts involved either highly inflated prices or undelivered goods by ghost suppliers after payment.

Second, at the top level alone, it involved a crowd of at least twenty people, cutting across the private and public sector. Businessmen and government officials at different levels were associated with the scandal in different degrees.

The ghost of Anglo Leasing and Finance Limited

On 22 November 2005, John Githongo presented President Kibaki a chronological account of how the infamous Anglo Leasing scandal developed.

Githongo began the account by addressing a contract between the Kenyan government and ALFL, a supposed British-incorporated company with offices in the city of Liverpool. The engagement had started in the year 2000, when the Department of Immigration within the Ministry of Home Affairs (that fell under the Office of the Vice President) was contracting a new passport issuing system that would produce tamper-proof passports to eliminate fraud, forgery and inefficiencies tender for supplier companies to submit bids was issued. One company was selected for meeting the required specifications of the tender. However, as the Ministry’s budget for the 2000/2001 financial year did not cover the proposed contractual costs, no agreement was reached with the successful company.

In 2002/2003, the tender process was opened again and none of the bids were considered successful. After the second process, the Ministry expanded the range of immigration service solutions, and went beyond just tamper-proof passports.

The Ministry’s needs were: 1) high security new generation passports; 2) a secure passport issuing system; 3) high security new generation visas; 4) a high security visa issuing system; and 5) computerisation of machine-readable immigration records. This change made the cost swell and Treasury got involved.

Unsolicited proposals

In August 2003, the Permanent Secretary in the Vice-President’s Office received an unsolicited proposal from a company for the supply and installation of an “Immigration Security and Document Control System, (ISDCS)”. The company offered a credit facility of 2.67 billion Kenyan shillings repaid at an interest of 5 percent over a period of 62 months to ease funding. That company had inside information. They had what the government needed, and they also knew that funding challenges had halted previous tenders. That company was Anglo Leasing (ALFL).

It is evident that Githongo and the Public Accounts Committee (PAC) appointed to investigate the Anglo Leasing scandal felt that it was too much of a coincidence that the ALFL had such specific knowledge of the Ministry’s challenges and needs.

The fact that this proposal was not immediately dismissed—or at least flagged—for its suspiciously detailed insight into the Ministry’s needs and challenges points at collusion in the contracting process. Despite this, the Immigration Department awarded ALFL the ISDCS contract in December 2003.

The public was first made aware of the scandal through documents tabled by Maoka Maore, former MP for Ntonyiri, in April 2004. The documents showed that 91 million Kenyan Shillings (3 percent of the 2.67 billion shillings total amount due) was paid as a commitment fee for the ISCDS project.

In his dossier, Githongo reveals that in total, about $ 4.7 million was paid for Anglo Leasing’s ISDCS project.

The creators and contractors of the Anglo Leasing scandal

The information about ALFL that Githongo received from several sources suggested that the company was in fact non-existent. He confirmed this when he took a trip to the United Kingdom.

Githongo established that the company was connected to notorious Kenyan businessmen.  Not by chance, these companies had won most large contracts to supply goods and services to the security and defence sectors at highly inflated prices.

At the request of Githongo, the KACC and Controller and Auditor-General listed their main suspects within government and President Kibaki authorised their suspension.

Suddenly, on 14 May 2004, Anglo Leasing and Finance Ltd refunded the Kenyan government 95 million Kenyan shillings from a Swiss bank for the immigration services.

The ‘refund’ issued by Anglo Leasing was as a blessing to some government officials. It was the leverage they needed to try to stop investigations into the scandal. Politicians also asked Githongo to go easy and prevent a bigger mess. By this time, Githongo’s head had a price.

The second Anglo Leasing Contract: C.I.D Forensic Science Laboratories

It came to Githongo’s attention that ALFL had another contract for USD 40 million to build the C.I.D Forensic Science Laboratories. Under this supplier credit agreement, USD 5 million was paid for no work done.

In this case, ALFL had a different address than the one given in the immigration services contract, supporting the suspicion that ALFL was a phantom firm. Further, the 2004/2005 budget allocated over KSh 450 million to Anglo Leasing.

Whether the president was aware of the Forensic Science Labs contract is uncertain. When Githongo furnished him with a copy of the Forensic Laboratories contract, Kibaki ordered that all payments be halted and that the people behind Anglo Leasing be unveiled.

The Ministry of Finance’s 2007 request for a forensic audit and valuation of the contracts was done by PWC. The contracts were categorised as: cancelled contracts; fully paid contracts and partly completed contracts.

The cancelled contracts were those where some sort of ‘refund’ was paid as compensation to have them closed and buried. ALFL paid back Ksh. 370 million for the Forensic Science Laboratories for the C.I.D. and 95 million Kenyan Shillings for the ISDCS; Infotalent and Silverson Establishment, also reimbursed the Kenyan government. In the end, over Ksh. 1 billion was recovered from the scandal.

The Vice President himself was not held accountable for the botched contracts even though the immigration services contract originated in his office. Other contracts dealt with the National Security Intelligence Service; the National Anti-Terrorism Centre, Kenya Prisons, the Police Airwing and the Administration Police.

Today 2020

The Ethics and Anti-Corruption Commission (EACC) has been given the green light to review the unfulfilled contracts between the government and foreign firms associated with billionaires Deepak and Rashmi Kamani, which saw Kenyans lose billions of shillings in the Anglo-Leasing scandal.

The Court of Appeal has overturned a 2008 decision by Justice Joseph Nyamu, which barred government from hiring audit firm PriceWaterhouseCoopers (PwC) to probe the contracts between the Treasury and two firms, Midland Finance & Securities and Globetel Inc, which saw billions of shillings  paid but no security equipment delivered.

Solid evidence

A five-judge bench has now ruled that Justice Nyamu’s decision had far-reaching findings against the government, which were not supported by strong evidence.

The appellate judges added that the orders of the then High Court judge were final in nature and even if the parties were to proceed to arbitration, the government was already adjudged the wrong party.

Justice Nyamu barred the Ministry of Finance from hiring PwC to investigate whether the government got value for money in the 18 Anglo Leasing security-related contracts.

PwC was to audit the procurement of a supplies contract between the government and Midland Finance & Securities Ltd and Globetel Inc signed in May 2003.

The companies were to install nationwide dedicated digital multi-channel security systems telecommunication network for the Administration Police and the Provincial Administration known as “Project Nexus”.

Lawful contract

A legal opinion by Attorney-General Amos Wako said that all pre-contract authorisations had been obtained, and that the contract was lawful.

The report later found that the government had paid for unfulfilled contracts, or paid up to five times more than the market price.

PwC was to establish whether there had been pricing, finance and other irregularities, and whether the government got value for money.

But the two firms moved to court, arguing that it would be used against them, yet the AG had sanctioned the contracts. Justice Nyamu agreed and stopped the government from investigating the contracts.

Irregularities

Justices Martha Koome, Hannah Okwengu, Asike Makhandia, Daniel Musinga and Sankale ole Kantai noted that PwC was required to find out whether there was value for money for goods and services and whether there were irregularities that could lead to civil or criminal actions.

The judges said no criminal charges were preferred against the two companies, and their case was based on the fear of what would happen, or was likely to happen.

“We further agree with the submissions by counsel for the appellant that the said provisions cannot be construed to oust criminal jurisdiction, which is independent, especially for acts that occur post the supply contracts. We, therefore, find the apprehension that the 1st and 2nd respondents’ rights were about to be violated was rather premature and not ripe for litigation,” they said.

Kenyans remain hopeful to see these public coffers tried, charged and convicted and assets recovered even though Justice delayed is justice denied.

It wouldn’t be the first time that the Urithi Housing is coming under fire for under delivery of projects. The room has been getting hotter by the day with investors who now fear they might have been conned going out of their way to demand for their money and arrest of the besieged managers. We’ve been writing for ages about Urithi Scams including recently the Qweto scam but not many listened.

Samuel Maina, Chairman of Urithi Sacco we’re told is in hiding as angry investors move from office to office looking for him but he’s nowhere to be found. We’re told he could be hiding in a city hotel where he’s signing several notes. Almost all Urithi offices across the country have remained closed.

Urithi has failed to deliver many projects that they promised their investors, despite having received payments, there’s so little or nothing to write home. All this pointing at yet another Ponzi scheme in the line of many. Disgruntled investors are now taking positions with a common telegram group where they’re sharing their experiences and planning the next action.

So far, the coordinated team is working with media houses largely RMS to conduct interviews, site visiting as they prepare an explosive expose. They also plan to drag the management to the DCI and have them charged for obtaining money with false pretense. They hope to recover their money. Some are struggling to pay off loans they took for projects that they can’t see.

According to a report sent to Kenya Insights, we’re told of projects that Urithi sold but in teal they never existed.

Projects that never existed;

Qwetos
Ruiru Oakland
Birmingham
Tola 3h
Tola 4
Juja terrace gardens
City edge
Nanyuki
Kingongo land
Nakuru houses
Own a room 2
Fish pond projects
Most Gem projects not built
Kikambala heights in Mombasa
Vipingo in Mombasa
Nakuru about 6 projects

Projects about to be auctioned

Nyumba Mia 1
Panaroma
Utange houses in Mombasa

Projects paid less than 20 percent of the total sum

Ruby gardens
Muranga
Twiga
Nyumba mias
Portlands
Rumuruti
Konza
Kisaju
Oletepesi
Rongai houses
Jogoo 8
Mwariki c
Ngata 1
Ngata 2
Park view 1 which is 100 acres
Park view 2 which is 20 acres

“All those projects are incomplete because of lack of funds and the reason is as explained. The chairman and his board never invested our money but took their kids and relatives kids to Riara group of schools…..he drives a V8 and owns properties at Ridgeway kiambu ..I have done enough research to know that Daniel kamau one of Urithi board members check him on that Urithi board members book ….this guy owns a classic flat along thika road that is worth ksh 200 millions and he lives in a house that looks like palace in garden estate Nairobi.. ..The house is worth alot of money….Kelvin was a board member he has gone mentally ill and he is talking like a parrot and saying all what they have been doing and how money was spent.” Says the report sent to Kenya Insights.

“It’s alot of research I have done it’s sad and anyone in their right mind can now see what am talking about…… I will die fighting rightfully for what belongs to me and I need that spirit here ….and before we are dead others will have gone ahead of us….Any warriors that goes in a battle it’s either they WIN ,LOOSE OR DIE ……am in for the three choices and those spies he is putting in my group go tell him…… I already told him and he knows.” It reads.

“Urithi has more than 32,000 .. I did my calculation as members sent receipts to me and already the 257 members have done a total contribution of ksh,703M and by the way not all members sent their receipts .This is money that has receipts …you can even do a simple math just say the 257 members paid ksh 2m and you will get close to ksh504,M…… Remember some members were paying 5million for the houses in juja Gem phase 1 and 2……. You members in this group I don’t know how much you paid but as you can see the figures are huge.”

“The company was founded on lies they did first project so well and gave members their titles to win our trust and most companies out there are doing this and it’s a BAD and Demonic TRICK that has left most families miserable……… because we saw them issue titles we join…..Never again join saccos in the name of buying houses in a gated community go buy a house or land from private owner also if you know people planning to invest in saccos stop them and warn them ….educate them on the trick that this saccos use.”

Many frustrated investors who continued to wait for rain in the desert are coming out.

“All members should know that there is a real possibility of recovering our money back or the land if we legally pursue  the chairman and his board in Both criminal and civil way. All those who had made statements We shall all apply a fresh using the  media houses. I will fully engage the  media houses to be with us at the DCI as we record those statements so Make sure  all your documents are in order. The chairman of URITHI and his board members have committed multiple counts of  offenses by obtaining money under false pretenses and especially for those members who bought non-existent properties. They also breached the contract because they didn’t deliver within the time frame .. The law is on our side so don’t loose hope. I will fully engage the media in every step. He used the media houses to scam Kenyans and I will use  the same media to expose his scams.He used the media to collect our money and I will  fully engage the media to get this money back. Stay here don’t go don’t loose hope. I won’t take bribes like what others are doing but I will bring this Sacco’s scams to an end. Sacco society regulatory  authority will also be investigated to find out why such saccos exist.” Writes the group’s coordinator on their telegram group.

“I invested in Sagana II Urifarm. They lied that they’ll make up that access road and do a lot of stuff after we pay them. I paid 60% of the money and waited to see any effort on their side. When I saw nothing was happening I wrote to them last year demanding my money back…that’s when I realized that these are heartless goons who conned us.” One investor writes.

“I invested in City Edge and my Siblings. 12Pieces of Plots.. City edge/City edge revised. Over 5years after Pushing for Titles, all we got was decorated papers they call Certificate. Only to hear the Land was a Scam, because they didn’t own it. Mr Maina you will know no Peace in Jesus Name!” Another investor wrote.

“It’s very painful indeed, to keep on paying loans and many of us are struggling with life coz we knew we could have saved alot by now only if we were given our keys as planned, my heart is bleeding.” Another disappointed investor writes.

“I was in Kenya in December and I visited their Office the one in Mountain mall to pickup my documents ‘sale agreement’.  I had to extend my flight for another weeks so can wait them officials sign my sale agreement.  I was very disappointed and even left the country without knowing where all my investments were. No one was willing to take to the site.” Another investor opens up.

The confessions are many and disheartening as we watch through yet another story of Kenyans who toiled to have their own homes, bite the dust.

Subdued investors are now making some demands which are not limited to returning their money with accrued interest for the number of years. “A case of OTG.. We invested 1.6M four years ago…. Today if they are to refund we are not taking anything less 3.25M in fact that is the current price Urithi is selling the incomplete shumbles.” A member suggested.

Transfer of properties to members.

“If it goes this way members must know the below Example is OTG. From sources inside Urithi the project is 80% paid up..the bal of 20% is allocation of chairman and his goons and that is what they keep advertising.” The member expounded.

“What is on the ground is 30%.investment ..if they were to transfer the project… It is plus 50% in cash that is paid up and in their possession.. On top of that they add 25% of the total cost for inflation ..4 years down the line the cost of materials, labour, utilities like power, water, sewer etc has gone up.. Plus ware n tare.. Most buildings that are not roofed has wasted and rusted away.”

Members are also demanding for the 15k share capital be returned plus interest accrued. “The goons collected half a billion in shares only and they have the audacity to pay 400 Bob of dividends that happened once.. Shame on then.” A member wrote.

 

Kenya Insights has received complaints from parents of sister schools Crawford International and Makini Schools which are both owned by a South African firm, ADvTECH, a private education group.

We’ve weighed on both cases and the complaints are synonymous with the firm’s management taking the punches for being too dismissive and not listening to parents who’re part of the school.

Frustrated parents have reached to this writer in a bid to raise the matter as they’ve managed to compromise the mainstream media from highlighting their plights and fear that the schools could sink with their money.

Crawford School sits in Kiambu’s Tatu City. It has its set of troubles between the management and parents and this will come later.

Parents of Makini Schools in Nairobi are a worried lot given the precarious state of affairs at the institution under the leadership of South African investor Advtech.

That Makini has enjoyed a rich education legacy in Kenya spanning 40 years cannot be gainsaid.

As an academic giant, the school has produced top students in the Kenya Certificate of Primary Education (KCPE) over the years.

Admired by Kenya’s middle and upper classes and some foreign expatriates for its discipline and as one of the few upmarket schools that offer the 8-4-4 system, the Makini brand has grown exponentially to the envy of its competitors.

In the recent past, however, the institution has been embroiled in vicious take-over wars, acute leadership gaps, a cavalier attitude of new managers and a gradual shift of focus from academic excellence to profiteering, at whatever cost.

So bad is the state of affairs at the school that the new owners, Johannesburg Stock Exchange (JSE) listed Advtech, have deployed a propaganda machinery to cover up serious financial shortcomings in their home country.

The big question among parents is: Who will come to their rescue if the foreigners vanish?

A summary of the genesis of Makini’s troubles is in order. All seemed well until May, 2018, when the original owners sold the school to a UK company—Scholes Ltd—with little information to the parents.

Between late 2019 and early this year, the Scholes, apparently unable to run the school, sold it to Advtech. So, in less than two years the school ownership has changed hands three times.

As worrisome as the change of management has been within this short period, parents are intrigued by calibre and high turnover of the top leadership of the school.

A quick online search on the qualifications of the executive director, Martin Sharman, shows he has a wealth of experience in retail sales and zero experience in education matters.

The communication director, Katya Nyangi, lacks the requisite professional qualifications in either communications, education or any relevant field and was previously supporting the previous owners with domestic errands.

Sharma and  Nyangi, who are employees of Scholes and Makini, have single-handedly been running the show and issuing incongruent instructions with no regard to school heads, the new owners (Advtech) or parents’ concerns.

Currently the school is going through a serious crisis. Different levels of managers are making decisions, issuing contrasting instructions and pulling in different directions at the instigation of Advtech, Scholes (who never exited the scene) and Makini Schools. Interestingly, all the owners and top managers – Advtech and Scholes, including Mr Sharma— operate from outside the country.

While the new owners are completely unknown to the parents, their financial standing and attitude towards parents raises more questions than answers.

As of June 2019, Advtech was rated as highly indebted where its liabilities outweighed it assets by more than Sh36 billion.

An article by the Wall Street Journal on Advtech’s balance sheet gives a stern warning that its debt obligations pose grave risks to its business.

These fears over indebtedness have created an aura of pessimism and doubt among parents on Advtech’s capacity to run the school.

Aware of its financial standing, the company recently rolled out an e-learning programme at school in the guise that it was free only for them to force parents to pay for it.

Makini’s e-learning is the epitome of an “off-plan learning” model where parents are forced to pay Term Two (May –August) fees now, with a promise to give a proper education once actual learning resumes.

Although, and in good faith, parents accepted Makini’s offer, they fear the faceless Advtech with their debts could run away with their money which averages about Sh1 billion a year.

The parents are aware of pyramid schemes orchestrated by crafty and broke foreign companies such as CMC Di Ravenna that was contracted to construct the Kimwarer and Arror dams only for this to turn out to be a pyramid scheme.

Makini parents are not ready to be part of the statistics.

Efforts by the Parents to ameliorate the situation at the institution with the new owners has been futile and obstinately rejected.

In their latest communications the company stated that it has no obligation to take into account parents’ concerns when levying new charges and that their decision was final.

The government has opted to fund the renewal of the Metre Gauge Railway (MGR) line to Malaba with an initial budget of Sh3.5 billion thus dropping an expensive Chinese contractor for the upgrade of the old railway track from Naivasha to Malaba to link the century-old line to the standard gauge railway (SGR) line at Naivasha.

In the same breath, it has dropped a private financier and the use of the Chinese contractor who had quoted in excess of Sh50 billion to upgrade the line and link it to the Mombasa-Naivasha SGR line.
Funding from an unidentified private backer was seen as a cheaper option compared to building a new modern line with Chinese loans, but the upgrade costs derailed the project.

In an interview on Tuesday, Transport CS James Macharia is recorded saying that Public Private Partnership (PPP) arrangement was taking too long, prompting the government to drop it and seek a cheaper financing model.

Government will fund it and the estimated cost is about Sh3.5 billion, but after proper documentation this could be plus or minus,” Mr Macharia said. “I would say that about a month from today, it will start and will take a year to complete. We want to do it as an extension of the SGR and it has to be seamless”.

Sources familiar with the earlier PPP plan which was to begin action last year 2019 July said that a quotation for the upgrade by the Chinese contractor had surpassed the envisaged budget by more than three times, sending the government back to the drawing board. And based on Chinese quotation, the private contractor was going to charge tremendous sum of money to recover their investments.

In the midst of financial desperation and increased level of unemployment in the country, fraudster(s) managed to publish a fake tender deal on Daily Nation newspaper dated 31st May 2020 taking advantage of the world wide status quo as many would scramble to win the tender to get back on their stable feet.

“We are aware of a potential scam involving a foundation office in Nairobi, Kenya. Please know that we do not have any office in Nairobi, Kenya, and ask that you report any fraudulent activity to local authorities in Kenya.’

In response to this scam alert, Bill & Melinda Gates Organisation said.​

“Please be advised that the Bill & Melinda Gates Foundation, Bill Gates, foundation employees, grantees, or partner organizations do not:

• Request administrative fees for awarding a grant. The foundation’s grant-making procedure can be found here.
• Host internet lotteries or offer prizes of any kind through email, postal mail, telephone, fax, or in person
• Request registration fees for conferences or summits
• Request information about bank accounts or other private information
• Approach individuals in person offering grant opportunities
• Solicit donations at any time
• Offer investment opportunities”

The statement goes on to say:

“The foundation is aware of numerous forms of fraudulent correspondence including, but not limited to: email, postal mail, fax, and telephone, all claiming to be from, or associated with, the Bill & Melinda Gates Foundation. They are circulating in a number of different languages and often include foundation logo, photos, links, or other information taken directly from our official web site, www.gatesfoundation.org.

Unfortunately, scams claiming to be from or associated with the foundation are growing in volume and, in many cases, can be quite sophisticated. Our security team is working with law enforcement to make every effort to stop such scams, but unfortunately, we cannot stop them all.

If you doubt the authenticity of any type of correspondence claiming to originate from the Bill & Melinda Gates Foundation, please email [email protected]. This alerts the foundation to the potential scam and allows for it to be investigated and remediated, if necessary.’

Seems the Fraudster(s) had not dug more policy information on the operation of Bill & Melinda Gates Foundation hence published some extraordinary requirements that have never been part of BMGF or of its partner organizations. These extraordinary requirements include Application fee which in this scheme is Ksh4,100 per each category (which are 7) summing to 28,100 for an individual. A jackpot win which seemed to be the target of the scheme. The fake tender Notes Better that it reserves the right to reject any bid and cancel wholly the procurement process or in part without assigning or giving any reason(s) for its decision.

Its likely that a number of people have already fallen into the trap, the fraudsters regained the money used on the ad and probably walked away with millions. Because many people don’t do enough due diligence.

Talking of Due diligence, it’s really sad and high incompetence that the entire DN approved an advert like that without doing a background check to verify it’s authenticity. How half a page ad with false information could pass so many begs a lot of questions. This is not the first time fraudsters are using the media and nation to con unsuspecting citizens. It’s the responsibility of the media house to cushion their readers from scammers and that can be done by a simple background check.

On this the scammers claimed they have an office in Kenya, cloned the official B&MG website to make it look surreal. But nation having received their share of the advert payment went ahead and placed the ad without doing a verification, it’s unethical and irresponsible their side.

 

 

Addis Ababa, May 23, 2020 – Documents handed to Addis Standard by a whistleblower in late 2019 and our investigations that followed revealed that funds belonging to the Ethiopian expat community in Lebanon were misappropriated by the Ethiopian government and secretly used to pay $600,000 US worth of fees owed to an American lobby firm in 2019.

The contentious money transfer was carried out in April of 2009 via Ethiopia’s consulate in Jeddah, Saudi Arabia and the money was deposited into a back account belonging to Washington DC based legal entity, DLA Piper, best known for its PR and lobbying works in the 2000s for the Ethiopian government. DLA Piper’s name became a household name among Ethiopians for having successfully convinced American lawmakers to quash a bill condemning Ethiopia’s human rights record back in 2007.

But the whistleblower’s documents, whose authenticity Addis Standard confirmed after months of investigations, reveal that not all the money used by the Ethiopian government officials to pay for DLA Piper’s services, belonged to the Ethiopian government. They also reveal that a number of government representatives, including ambassadors to at least two countries, and Foreign Ministry staff, were well aware of this.

Among the documents obtained are letters and receipts confirming the money transfer and filed away as part of an audit carried out by the Ethiopian consulate in Jeddah in 2015. The payment to DLA Piper using $600,000 in misappropriated community donations, was overseen by former Ethiopian consul general in Saudi Arabia, Tekleab Kebede Aregawi, and former Foreign Ministry finance department staffer and Ambassador to France, Nega Tsegaye.

The money was the entirety of a fund dedicated to the interests of Ethiopian domestic workers languishing in Lebanon. The sum was accumulated through fundraisers at community events, as well as private donations by members of the community and religious organizations over the course of a decade. When scores of Ethiopians fled Lebanon’s political instability and military conflict in 2006, the money was transferred from Beirut to Jeddah, entrusted with Ambassador Tekleab Kebede to safeguard it until Lebanon had stabilized and the community could be rebuilt.

But the money was never returned, the Saudi based Ethiopian consulate hasn’t made any mention of it and inquiries by members of the community in Lebanon have gone unanswered. Ethiopians in Lebanon were aware that the money was transferred to Jeddah but weren’t ever notified or consulted about what happened to it next. Plans to use it for charitable causes related to migrant workers went up in smoke.

Migrant workers in Lebanon aren’t protected by that country’s labor law. Under the institutionalized “kafala” system, Ethiopian domestic workers are underpaid, often mistreated or murdered by their employers. Overwhelmed with the number of Ethiopian women hospitalized after jumping off the balconies of high-rise buildings to escape abusive Lebanese employers, community leaders opened the account with the goal of soliciting public help to pay their medical fees. The money was also designated for covering costs related to the delivering of bodies of deceased maids to their families in Ethiopia for burial.

It was starting in 2005 that money belonging to the Ethiopian community and Ethiopian consulate in Beirut began to be transferred to the Ethiopian consulate in Jeddah. The community was made aware of the decision prior to the transfer of assets to bank accounts belonging to the consulate in Jeddah. The then consul general in Jeddah, Ambassador Tekleab, was to return all assets once Lebanon’s political turmoil and Israel’s bombing campaign of Lebanon were over. While it is unclear how much money belonging to the Ethiopian consulate was transferred, money originating from the community’s domestic worker fund totaled 640,000$.

But the community has never recovered its money. Despite the consulate in Beirut hiring new staff and Ethiopians returning to Lebanon in large numbers, the Jeddah consulate has neither returned the money, nor has it publicly acknowledged that it even had it. Community members, who sought to use the money to build on previous efforts to assist worker abuse victims, hounded the Ethiopian government for answers as to what had happened to their assets transferred to Saudi Arabia. One community leader went as far as visiting the Foreign Ministry’s headquarters in Addis Abeba to obtain answers. Her efforts bore no fruit and the diplomats involved in the ruse remained mum. The collective silence aided in covering up all traces of the subsequent transfer of these funds to DLA Piper in the United States. The files leaked to Addis Standard provide answers for those who spent the last decade wondering what happened to the money.

In addition to uncovering the names of those who funneled over half a million American dollars in donations to an American law firm, Addis Standard has identified several other public officials, who were uninvolved but later learned of the deal with DLA Piper after investigating on their own. These officials also played their part in ensuring nobody would be held accountable for the 2009 embezzlement by maintaining their silence and refraining from notifying the public.

Among them, Ethiopia’s former consul general to Lebanon, Ambassador Halima Mohamed. Ambassador Halima was well aware that the bulk of the community in Lebanon is formed by women who in 2009, earned as little as 100$ monthly, toiling seven days a week in Lebanese homes.

Despite their low income, Ethiopians rallied around the need to help fellow nationals in distress, says Hiwot, who will only go by her first name. Hiwot has lived in Lebanon for nearly two decades and was among those who donated to the fund. According to her, the disappearance of such a large amount of money without a trace, “dealt a blow to the moral,” of members of the Ethiopian community.

“It was sad, because it took us a long time to gather that much money. Ethiopian officials in Jeddah know about it, I’m sure. No way can this much money be lost. But nobody has told us anything.”

What happened to over half a million dollars a decade ago is a discussion topic often brought up in community circles. There are those who have resided in Lebanon for decades, some of whom will still ruefully recount the various projects planned for the benefit of the people upon the collecting of the money. The truth about exactly what happened to 640,000$ belonging to the domestic workers of Lebanon has remained a closely guarded secret. Until now.

How the money ended up in Saudi Arabia

Lebanon was rocked in February 2005 by the assassination of its former Prime Minister Rafic Hariri in a car bombing that left 22 people dead in Beirut. The attack was the trigger for protests by outraged Lebanese who demanded and eventually forced the resignation of Hariri’s replacement, Prime Minister Omar Karami. Demands by protesters centered around the ending of neighboring Syria’s three-decade old military presence in the country and the enacting of democratic reforms. The demonstrations by millions brought the country to a halt very much like the Lebanese protests of 2019-20 did prior to the outbreak of covid-19 in the country. But in 2005, they were coupled by a wave of political and sectarian violence. Bombings and targeted killings killed and wounded scores, including migrant workers.

It was during the turbulence in the aftermath of Hariri’s assassination that Ethiopians residing in Lebanon first started leaving the country. But a year later, Lebanon’s problems were exacerbated. Tensions between Israel and armed entity Hezbollah boiled over after the latter carried out an ambush in Israeli territory that killed eight Israeli soldiers. In retaliation, Israel announced it would deploy its air force to bomb Hezbollah targets in Lebanon. From July to August of 2006, Israeli warplanes reduced countless buildings across the country to rubble and killed over a thousand civilians. The devastation of the aerial campaign brought about an exponential increase of Ethiopian migrants seeking to flee the country.

Ethiopia’s top diplomat at the time in Beirut was Consul General Adem Nurhussein Adem. Based in Lebanon since 2004, he was depicted in media reports at the time as exasperated, overstretched and having trouble dealing with endless requests from Ethiopian domestic workers desperate to flee from Israeli bombing raids. “Many of them are illiterate,” he told the Baltimore Sun back in 2006. “Some don’t know what a passport is, and most have run away from their sponsor, so they are illegal.”

Hiwot recalls this period “like it was yesterday.”

“The lucky people left the country early. The Israelis bombed the airport and even roads in Beirut. So many Ethiopians packed buses headed to Syria, which was a safe destination back then.”

The International Organization for Migration (IOM) later helped fund the returns of Ethiopians stranded in Lebanon. Starting from 2005 and continuing into the 2006 Israeli aerial bombing campaign period, Consul General Adem Nurhussein authorized several emergency transfers of assets belonging to the Ethiopian consulate in Beirut, to bank accounts in Jeddah.

In Lebanon, migrant founded associations aren’t permitted to legally register. There are no formally recognized Ethiopian citizen run organizations in Lebanon, other than the Beirut based Ethiopian consulate. This complicated things for the migrant run Ethiopian community in Lebanon. Unable to open a bank account in its own name, the community reached an agreement with the consulate to collect funds and place them in a separate bank account under the consulate’s name.

The community and consulate agreed that the money would be accessible by the community leadership at any time and no amount of community funds would be moved without the community’s explicit permission. Meseret Workneh was among the community appointed treasurers. She has since relocated back to Addis Abeba where she was reached by Addis Standard.

“It was a chaotic time,” she begins. “Our community had fallen apart, people were doing everything they could to escape Lebanon.”

Meseret says that it was during the bombing campaign that Consul General Adem Nurhussein gathered the remaining consular staff and community leaders for an emergency meeting.

“He explained to us that even the future of the consulate in Beirut wasn’t secure,” Meseret recalls. “We would one day be able to rebuild our community. Until we do, the funds from our bank account would be transferred to an Ethiopian consulate in Saudi Arabia.”

Meseret tells Addis Standard that the consul general promised assembled representatives that once calm was restored, the community could request the return of their funds from the consulate in Jeddah. “I had my doubts. But what alternatives could we provide? We were in a war-zone and the fear was that the money would be stuck and even irretrievable in a Lebanese bank.”

According to Meseret, several consulate staff members had defected from their positions and there were legitimate concerns that even the top diplomat might do the same.

Consul General Adem Nurhussein did end up fleeing Lebanon sometime in 2008, defecting from the government and starting a new life in the United States. Prior to his defection, he came off as frustrated in interviews with various media outlets. Swamped with cases of abuse, imprisonment and deaths of Ethiopians, he told a Lebanese journalist that his office was dealing with 148 suspected suicides of Ethiopian nationals between 2007-08. “We receive as many as five cases of abuse per day,” The Consul General stated. He also blamed Lebanese authorities for not doing more to stop what he referred to as “modern day slavery.” In comments made to Spanish media outlet El Mundo, he again lashed out. “My complaints don’t even reach top officials.”  He accused employment agencies of serving as “slave traffickers.”

From Jeddah to Baltimore

In 2010, Ethiopia appointed Asaminew Debele as its top diplomat in Lebanon. His appointment as Consul General coincided with an upsurge of new arrivals of Ethiopian citizens in the country. After the ample reports of death and injury of Ethiopian domestic workers, Addis Abeba had banned traveling to Lebanon for employment in 2008, just prior to Adem Nurhussein’s defection. The ban was the first of several such attempts at dissuading Ethiopian women from migrating to Lebanon, all of which have proven ineffective. The Ethiopian government did little to enforce the ban, which led to increased demand for the services of human traffickers. These traffickers continue to facilitate the travel of plenty of Ethiopians to Lebanon, many of whom have ended up dead and victims of horrific abuse.

Consul General Asaminew Debele quickly realized that the consulate had a disaster on its hands. Daily reports of abuse, suicides, and women hospitalized after leaping from tall buildings in a bid to escape their suffering, marked his tenure which ended in 2012. Today, retired, he made it clear to Addis Standard that he has no fond memories of his time in Beirut.

“I couldn’t sleep at night. Every week we had staff looking at dead bodies of our citizens in the morgue. Everyday our phone would ring, and girls crying, would pour their hearts out to us and beg us for help. We couldn’t keep up,” the former career diplomat said over the phone.

It is unclear if the consulate did all it could in its capacity to assist its citizens, as the institution is often slammed for its reluctance to get involved. It was during Asaminew Debele’s tenure as Consul General that the highly publicized incident caught on camera of a domestic worker named Alem Dechassabeing pulled by the hair, dragged, beaten and shoved into a vehicle by Lebanese recruitment agent Ali Mahfouz, made headlines. She was later reported to have died by suicide. Ethiopians around the world criticized the general consul for his inability to save her life, especially after it had emerged that the abuse caught on camera happened just outside the consulate.

But Asaminew states that he was never given the authority to fulfill his mandate. “I realized soon after my arrival there that I was merely a figurehead. The government has never allocated us the funds nor the resources to deal with problems of that magnitude.”

“The issue of Ethiopians in Lebanon was never given the attention it needed during my tenure. They were completely helpless and neglected.”

The former general consul says he worked with the community and did what was in his power to assist his compatriots. Including, cooperating with efforts to recuperate the missing 640,000$.

“I investigated and was able to find out that after Adem sent the money to Jeddah, Ambassador Tekleab confirmed his having received it,” Asaminew told Addis Standard. “But I have never been given a straight answer for what happened to the money after that.”

“The money belonged to the community. We had so many bodies in the morgue. This money would have served to send them home for burials by their families.”

The files obtained by Addis Standard don’t specifically name Ambassador Tekleab Kebede. But according to Asaminew, the talk in Ethiopian diplomatic circles was that Tekleab used his office and his proximity to high ranking officials to pursue business dealings. “It’s an open secret,” is how he put it. “He was younger than many of his peers and yet was allowed to retire with benefits before most of them,” the former consul general chuckled. “The man went from being a diplomat in Saudi Arabia, to suddenly being nominated for some lucrative business position in Dubai. That doesn’t just happen!”

Ambassador Tekleab Kebede’s tenure as consul general ended in 2011. He was subsequently switched to a role in government promoting Ethiopian business interests. He was part of a nine man Ethiopian government delegation led by then deputy Prime Minister Hailemariam Desalegn in June 2011, which traveled to Riyadh to urge the Saudi government to pursue business interests in Ethiopia. Soon after, he was employed by the Dubai Chamber of Commerce, and headed their Ethiopia office.

In 2016, Ambassador Tekleab was appointed the Chairman of the Board of Directors for the “Ethio-Diaspora Grand Mall” project and was tasked to oversee the construction of a 2.6 billion birr mall in Addis Abeba with Ethiopian expatriates serving as shareholders. Local media reported extensively on it and Ethiopian embassies around the world advertised the availability of shares. It is unclear what happened afterwards as construction is yet to begin and the project appears to have been abandoned with no explanation given.

Ambassador Tekleab spent 15 years as consul general in Jeddah. Before that, he was the consul general in Ottawa, Canada, and was a board director for the Canadian branch of the Relief Society of Tigray, an organization he served as a spokesman for over a decade.

The whistleblower who collected and eventually handed over the files to Addis Standard claims they had breif access to some of the Jeddah consulate’s files and insisted there could be more files revealing more wrongdoing that needs to be investigated by the government. “I wanted the whole truth to come out. The public deserves to know,” the whistleblower who prefers to remain anonymous explains. “There have been rumors of corrupt practices being carried out at embassies across the Middle East for years. If they were thoroughly searched, more files revealing more wrongdoing would be found.”

Nebiyu Sirak, a long time resident of the Kingdom and known for his written activism decrying the suffering of migrants in Saudi Arabia, penned a series of articles for various blogs detailing the woes of migrants in the country. According to Nebiyu, Ambassador Tekleab’s lengthy tenure in Saudi Arabia was fraught with allegations of corruption and nepotism enabled by his office. Nebiyu wrote extensively about some of these allegations, including that of a community initiative back in 2010, which saw Ethiopian residents of Jeddah raise money to support jailed migrants in the city. The charitable effort’s leadership was disbanded by ruling party members dispatched from the consulate, according to Nebiyu, who wrote that money raised disappeared into the coffers of the consulate.

“Corruption was rife during (Ambassador Tekleab’s) tenure as consul general,” Nebiyu explained to Addis Standard. “There are countless incidents. Around thirteen years ago, there was the open theft of around 100,000 SAR (around $26,588 US) that was raised for the building of a monument in Ethiopia commemorating Ethiopian-Saudi ties. The monument was never built and the money never retrieved.”

It’s a damning allegation about a man who, during his time as consul general, tended to avoid the media spotlight. Ambassador Tekleab Kebede appears to have only willingly courted interview requests when the agenda topic centered around Ethiopia’s business interests. For instance, he was known for his lobbying for Saudi businessmen to invest in Ethiopia’s fertile farmland primarily in the Gambella region. That endeavor largely failedand resulted in the Ethiopian government being accused of displacing indigenous peoples.

In Ethiopia meanwhile, Ambassador Tekleab is listed as a board member of the Parkinson’s Patients Support Organization (PPSO) and runs a number of businesses, including TKA Import and Export. That company is listed officially as an exporter of agricultural products, but on another business listing, the company is also recognized as an exporter of gold bars from Africa.

Reaching Ambassador Tekleab Kebede was a task on its own. None of his businesses contacted were willing to provide his contact information. “He’d never give anyone his number,” Nebiyu Sirak explained. “He doesn’t use social media and can be untraceable. He would use multiple numbers to avoid dealing with the multitude of issues facing Ethiopians in Saudi Arabia.”

Nevertheless, a self declared close confidante eventually gave Addis Standard a list of phone numbers said to belong to the former diplomat. Ambassador Tekleab appeared startled at being reached by phone, but surprisingly remained on the line to address queries linked to the controversial 2009 money transfer.

Ambassador Tekleab was the man in charge of the Jeddah consulate both during the initial transfer of funds from Beirut to Jeddah and during the 2009 payout to DLA Piper. But when asked about such dealings, he strongly denied knowing anything about them. “What are you talking about?” was how he reacted.

“The embassies and consulates across the Middle East sometimes transfer money from one office to another,” Ambassador Tekleab said. “But this transfer from Lebanon to Saudi Arabia never happened. And any talk of money being sent to the US is untrue.” When told that Addis Standard was in possession of a document that suggested otherwise, he simply said: “I’ve never heard of such a thing. It’s against our working protocol.”

However, Ambassador Tekleab was willing to speak at length, a refreshing change considering that officials in Ethiopia normally dodge such inquiries. The longer he discussed the topic the more his position began to gradually shift. He was eventually told a fellow diplomat in Lebanon had named him as being the recipient in Jeddah when the community’s money was transferred there from Lebanon. He had claimed at that time that this couldn’t be true, but he was asked if he was insinuating that Consul General Asaminew Debele had lied.

“I never said that,” Ambassador Tekleab now said. “I said I don’t remember. I can say with the utmost certainty that no money was sent to America. Money may have been sent from Beirut to Jeddah. There was a working relationship between those two consulates. It’s common to send money between offices. But the part about money being sent to an American firm is false.”

Addis Standard: “So there may have been a transfer from Beirut to Jeddah of $640,000 US.”

Ambassador Tekleab: “It’s possible. I can’t recall but it may have happened. We transfer large amounts of money and it’s impossible for me to remember each and every transfer. But I can say with the utmost confidence that no money was sent to the US. And any money that was transferred was done so with the authorization of my superiors in Addis Abeba.”

Addis Standard: “Is there the possibility that someone at the Jeddah consulate might have completed a transfer to the US without your knowledge?”

Ambassador Tekleab: “No. That’s impossible. Everything goes through me. We have a finance officer, but I was the one who had to okay anything coming in and out of Jeddah. This is why I can tell you with certainty that your claim isn’t true.”

“Beware of what you publish,” he warned. “What you are claiming is a fabrication. You are going to bankrupt your profession.”

But the documents Addis Standard is in possession of suggest otherwise. The authenticated documents make it very clear that it was the money from the community’s account that was delivered to the United States. And by Ambassador Tekleab’s own admission, the 2009 transfer to DLA Piper couldn’t have been completed without his knowledge. So, while his name isn’t on the document, it’s virtually impossible to rule out his own complicity. However, there does appear to be some truth about what he said regarding the involvement of a superior.

Among the files Addis Standard spent months analyzing, a faxed document from the Foreign Ministry to the Jeddah consulate. The letter sent by a Foreign Ministry official, requests the transfer of $600,000 US to a Baltimore bank account belonging to DLA Piper. The letter, translated from Amharic reads approximately as follows:

The letter includes information for DLA Piper’s account at a branch of the M&T Bank. It is signed off by the then Foreign Ministry finance department official, Nega Tsegaye, who went on to become Ethiopia’s ambassador to France and Spain. A career diplomat, Ambassador Nega is now back in Addis Abeba, currently working as the Director General for the Foreign Ministry’s Public Diplomacy Communications office.

Unlike Ambassador Tekleab, Ambassador Nega Tsegaye wasn’t open to discussing the matter. “I don’t know what you’re talking about,” was his answer when reached on the phone by Addis Standard. “You’re talking about a matter from over a decade ago. It isn’t fit to be discussing such matters over the phone.”

When asked if he was willing to be sent an email further clarifying the matter for a story, his tone became aggressive. “Go ahead! Publish what you want. I’m in the office with someone now. Sorry.” The line went dead.

Unlike Ambassador Tekleab, his name and signature are very visible on the document and they point to his being a participant in the money transfer that has hoodwinked the public.

DLA Piper

The lobbyist firm at the center of the story is one with a controversial track record. The Ethiopian government and DLA Piper’s crowning achievement would be the latter’s work in permanently stonewalling congress from passing HR2003, or the Ethiopian Democracy and Accountability act of 2007. The bill would have called for a US condemnation of Ethiopia’s human rights situation and would have ushered in sanctions, including barring entry into the US of Ethiopian senior officials found responsible for human rights violations. But DLA Piper staffers went into overdrive, recruiting the involvement of Republican lawmakers and circulating pamphlets which sold Ethiopia as an important ally in the war on terror. It worked. The human rights initiative was shelved, despite relentless efforts by some Ethiopian American activists.

In 2006, DLA Piper was paid a tidy $50,000 US monthly, solely from consultation and public lobbying for the Ethiopian government led by the late Prime Minister Meles Zenawi. Gary Klein, a DLA Piper spokesperson went on the Deutsche Welle’s Amharic language program and made the astonishing claim that Ethiopia had no political prisoners both prior to and after the election violence of 2005. Klein’s comments provoked outrage among Ethiopians, who on at least one occasion, protested outside the law firm’s Washington DC office.

Gary Klein of American lobbyist firm DLA Piper, remembered amongst Ethiopians for telling an Ethiopian radio host that Ethiopia had no political prisoners preceding or immediately after the controversial 2005 Ethiopian Elections (Image: Bloomberg)

DLA Piper incurred the wrath of human rights activists and Ethiopian political opposition figures as well as a lot of bad press. In April of 2009, likely due to the pressure, DLA Piper announced that it would be ending its work on behalf of what it referred to as the “democratically elected government of Ethiopia.” The company issued a statement that was picked up and republished by a number of Ethiopian outlets, including Opride.com. In its final notice, the firm also mentioned having “worked with the (government of Ethiopia) in London and Brussels as well as Washington DC.”

The documents Addis Standard is in possession of, show that DLA Piper’s payoff made with embezzled Lebanese community funds, came about a week after their public announcement. The documents render it clear that the money transfer to DLA Piper was for work done with Ethiopian embassies in London, Brussels and Washington DC, making them strikingly consistent with the widely publicized statement issued by DLA Piper cited above.

Phone calls made by Addis Standard to DLA Piper’s media spokesman Josh Epstein went unanswered, as did an email.

A decade old dilemma for Ethiopians in Lebanon

For Ethiopians in Lebanon, the disappearance of the money was a reoccurring source of frustration that would boil over every time meetings between the consulate and members of the community took place. Hiwot remembers this well and explained the source of continued tension.

“Girls were being beaten and raped with regularity in Lebanon,” Hiwot says. “The Ethiopian community opened a shelter with its own money which we used to house victims. The consulate never helped us cover the costs and we struggled to do so.”

Hiwot says the money could have made a massive difference for the good Samaritans in the community who were forced to scrounge together whatever they had to rent a small two room apartment which would be used as a shelter. Demands for the consulate to recuperate what belonged to the community reached fever pitch as the consulate showed less of a willingness to investigate.

Meseret Workneh, who was one of the treasurers appointed to look after the community’s finances when the initial transfer to Beirut took place, made it a personal mission to get to the bottom of the affair.

“It made my blood boil because domestic workers who had jumped from five story buildings couldn’t afford the healthcare needed. Survivors with broken legs sometimes left the hospital being supported by friends because some couldn’t afford the crutches.”

She believes that due to her incessant probing of the matter, she was targeted by the Ethiopian government.

“First I lost my position in the community leadership,” Meseret recalls. “Then my residency papers expired despite my submitting renewal documents to the consulate on time. Because I had no residency papers, I was arrested by Lebanese police and spent two days in jail. I’m sure someone in the consulate withheld my renewal application as a punitive measure.”

Meseret says that during Asaminew Debele’s tenure, the consulate in Beirut was far more receptive of requests to investigate the matter. “I cannot blame Asaminew. He looked into it, but I’m certain they threatened him to remain silent. He risked his pension just by asking around.”

In May 2012, after the uproar caused by the tragic death of Alem Dechassa two months earlier, the Ethiopian government sent a delegation from the Foreign Ministry’s Women’s Affairs office to meet with Ethiopians in Lebanon to fend off allegations it neglected its citizens there. Frehiwot Asrat, who later became Head of Ethiopia’s Women Affairs Directorate General, was among those who traveled to Beirut as part of the delegation.

Addis Standard obtained another document containing the minutes of the meeting between members of the community and the public officials, produced by the community and signed by round-table participants. It shows that the meeting was chaotic to say the least. Members of the community slammed the consulate for its inaction. Others demanded justice for Alem Dechasa. Meseret Workneh, the community’s finances head at the time was accused of corruption during the meeting, at the same time, the issue of why her residency permit was purposely allowed to expire was also explored.

Amidst multiple accusations of corruption, the issue of the missing community funds was also raised. “Previously, the community managed to raise a sum of US$640,000 before it was sent to Saudi Arabia. Where is that money?”

A community representative, perhaps having lost hope in ever recovering the money added, “if the money is still there, we request that it be donated to the Grand Ethiopia Renaissance Damn project.”

The document reveals that there was a lot of heated back and forth between community representatives, consular staff and citizens. Frehiwot Asrat is portrayed as having attempted to mediate between feuding entities and the report doesn’t describe her as addressing any specific claims.

Meseret Workneh, who faced pressure to stop asking about the missing money and was jailed when she alleges consular staff allowed her documentation to expire, wouldn’t let up. Later that year, she went to Addis Abeba and demanded an audience with the Foreign Minister’s finance department. But unfortunately for her, she was accommodated by none other than Ambassador Nega Tsegaye. At the time, she wasn’t aware that he was behind the money’s disappearance.

“At the Foreign Ministry, I told them that we lost over half a million dollars in donations,” Meseret Workneh remembers. According to her, the former Ambassador to France was furious.

“He got angry. He told me that in order to process my request, I had to bring him receipts for each donation. Receipts for 640,000 dollars in donations! It was clear to me that he was unwilling to look into it.”

When it became clear that Foreign Ministry personnel wouldn’t cooperate, Meseret says her pursuit of the money ended. She believed it was futile from this point on. When told of the existence of a document revealing that Ambassador Nega Tsegaye himself was behind the money’s disappearance, Meseret expressed dismay. “It definitely makes sense now,” Meseret told Addis Standard. “Had I raised the issue with a second employee in that office, things might have turned out differently.”

After his encounter with Meseret, the furious former ambassador to Spain rang Consul General Asaminew Debele up.

“He was angry. He said, ‘why did you send her to me?’ I tried to explain that I didn’t, but he wouldn’t listen,” Asaminew recallecd the details from eight years ago. “He silenced Meseret and that was that.”

Institutional Silence

As the years went by and the plight of Ethiopian domestic workers in Lebanon saw no let up whatsoever, the appointment of new diplomats would for some spell a new opportunity to get things right in Lebanon. Ambassador Halima Mohamed, a career diplomat and former ambassador to Italy was appointed as the new consul general. She was the Oromia region’s Culture and Sports bureau head in the nineties. Her being a woman, some believed, would perhaps push her to take a greater interest than her predecessors. She remained in Beirut until 2017.

Ambassador Halima is remembered for having more resolve than the likes of Asaminew Debele. An activist in the Ethiopian community told Addis Standard that unlike her predecessors, Ambassador Halima made a sincere effort to deal with the Lebanon issue. She even tried to get to the bottom of the mystery surrounding the missing $640,000 US.

The whistleblower’s files appear to confirm that assertion. Addis Standard is in possession of a faxed document showing what appears to be the response by the Ethiopian consulate in Jeddah to a request by its Beirut counterpart for full clarity into what happened to the money.

Dated June 26^th, 2016, the letter shows that the Ethiopian consulate in Beirut, by that time run by Ambassador Halima Mohammed, did ask for answers to what was in the eyes of Ethiopian residents in Lebanon, a cold case. It had been five years since Ambassador Tekleab Kebede had left Jeddah. The letter was stamped with the official consulate seal and that of the new consulate general, Ambassador Wubshet Demissie.

“As per the letter written on June 9^th 2016, our mission has been requested to clarify what happened to money deposited from Beirut as part of emergency measures taken due to Lebanon’s instability at the time.”

Ambassador Wubshet Demissie goes on to confirm in the letter that records do indeed show that $640,000 US was sent from Beirut to Jeddah. The letter goes on to explain that due to a transfer of $600,000 US to DLA Piper made on April 15^th 2009, only $39,895.00 US of the original amount remained.

The message clarified as other documents have, that the money was used to cover the expenses of consultancy sessions given to Ethiopian embassies in the US, UK and Belgium.

What this document reveals is that Ambassador Halima Mohamed was made aware that the large sum of money belonging to the women she was appointed to serve was in fact transferred to DLA Piper. The message to her office from the Jeddah consulate’s, then headed by Ambassador Wubshet Demissie, clarifies that Ambassador Halima had learned of what happened to the community’s money by June 2016. But she never revealed the truth to Ethiopians in Lebanon to a burning question they had for over seven years. Her subsequent silence on the matter is puzzling.

Ambassador Halima, who is currently the Director General of Foreign Ministry’s ethics commission, wouldn’t respond to multiple calls and text messages to her phone requesting clarity as to why she never spoke up.

The author of the letter, however, was reached by Addis Standard. Ambassador Wubshet Demissie, consul general in Jeddah, was relocated to the Foreign Ministry in Addis Abeba in 2018.

The Ethiopian government’s former man in Saudi Arabia gave his version of events and made a lot of revelations.

“From what I remember, this money belonged to the community and the Ministry of Finance wasn’t aware of it,” Ambassador Wubshet said, “I recall that at a meeting with then Foreign Minister Dr. Tedros Adhanom, both me and Halima raised the issue of this money with him.”

“After learning of the facts, Dr. Tedros decided that as this money didn’t belong to the Ethiopian government, it had to be returned to the community using necessary procedures.”

There is nothing on the files suggesting that World Health Organization Director General Dr. Tedros, who was Ethiopia’s Foreign Minister at the time, was aware of the Ethiopian government’s manipulation of funds belonging to the Ethiopian community in Lebanon. But Ambassador Wubshet went on to tell Addis Standard that after Dr. Tedros had ordered the money delivered back to the community, he had believed that the money had since been returned and that the matter was taken care of. Ambassador Wubshet appeared to express shock when told that this wasn’t the case. Like the other diplomats, he claims to know nothing about the transfer to DLA Piper’s M&T bank account.

“I haven’t heard anything about this money being used for embassy sit downs with an American lobbyist firm,” he said. When reminded that he was being contacted due to his name and signature being found on a document confirming that he was well aware of the consulate delivering payment to DLA Piper for its services, he simply said he couldn’t remember.

“I do remember an audit being performed at that time. But I don’t remember signing any such document.”

“The audit was carried out after Ambassador Halima Mohamed requested the government look into allegations that the consulate in Jeddah had taken money belonging to the community in Beirut.” According to Ambassador Wubshet, the audit was carried out by Ambassador Nega Tsegaye himself.

He admits to having received messages from Ethiopians in Lebanon requesting the return of the money. “I understand that many Ethiopians in Lebanon live in desperate situations. It’s understandable.”

When asked if it would be reasonable in 2020 for Ethiopians in Lebanon to request that the Ethiopian government return money they lost back in 2009, he answered in the positive.

“Absolutely. We agreed to this long ago with Dr. Tedros Adhanom. This money didn’t belong to the government. There are procedures for money like this to be returned but there’s no question that it belongs to the Ethiopian community in Lebanon. The truth is, the federal government aside the individuals involved wasn’t aware of the money’s existence until we started discussing it.”

Ambassador Wubshet also appeared to agree that if a consul general was to send assets from one country to another, he’d require the participation of someone in Addis Abeba. This is consistent with the fact that Ambassador Nega Tsegaye helped facilitate the bank transfer that Ambassador Tekleab Kebede finally executed.

Ambassador Wubshet’s testimony, if accurate, would also confirm that Ethiopia’s consul general, Ambassador Halima Mohamed, had thoroughly investigated the disappearance of the money, before choosing to remain silent for the duration of her tenure in Beirut.

Ambassador Wubshet Demissie’s relative openness on the topic might be deemed the conduct of someone with little or nothing to hide. But the former consul general in Jeddah, who revealed that his office had received requests for information on the missing money, has never answered any such questions from the public. He gave nobody any indications that the issue of the money had reached the upper echelons of government and until he was told that a document with his name on it suggested his knowledge of all the details, he too, like his counterpart in Lebanon, preferred to avoid all talk on the subject.

In addition, Ambassador Wubshet’s claim that the government was made aware of the issue years later appears to be untrue. This document below reveals Ethiopia’s state coffer heads were made aware of DLA Piper’s payment package already on June 17 2009 at the latest. Barely a month after the lobbyist firm received their payment.

In 2006, another document from Ethiopia’s consulate in Jeddah revealed another side of Ambassador Wubshet Demissie. The document, a 52 page internal memo penned by Ambassador Wubshet himself, was leaked to Ethiopian media and was something of a guidebook for embassies and consulates seeking to exert influence over the Ethiopian expatriate communities they were supposed to tend to. Among the recommendations, the recruiting of community agents who would serve as ruling party ideologues in Ethiopian communities around the world.

Wubshet’s guide to “constituency building,” was focused on wiping out the political opposition’s influence and turning expat communities into regime loyalist camps that would fight to combat the spread of news or reports that counter the state narrative. All in all, it appears that Ambassador Wubshet had intended to get Ethiopians in the diaspora to do what the government ended up paying DLA Piper millions of dollars to do.

Ethiopian women who flock to the Middle East for jobs as domestic workers do so with the hopes of escaping unemployment, dim prospects and poverty. Once in countries such as Lebanon, domestic workers are at the mercy of their employers due to the kafala system’s enabling of horrific abuse by employers. Cases of deaths of Ethiopian maids in Lebanon have been reported as far back as 1995 with no known case of anyone being brought to justice by Lebanese courts.

Another reason for the staggering number of victims is the lack of involvement of Ethiopian diplomatic institutions when it comes to cases of abuse and murder of domestic workers. It would explain why none bothered to address complaints of money disappearing.

The documentation detailing the money trail of $640,000 US of money belonging to the community in Lebanon going from Beirut to Jeddah and finally to DLA Piper in the US is authentic. None of the parties interviewed provided anything that could refute what is stated and certified by official signatures and stamps. Ambassador Tekleab issued flat out denials, even initially stating that there had been no emergency transfer of money from Beirut to Jeddah, before shifting and stating that he could no longer remember. Ambassador Nega Tsegaye meanwhile, personally blocked a Beirut resident’s attempt at digging for the truth at the Foreign Ministry and hung up when a journalist sought to question him about his name and signature on a faxed transfer request suggesting his involvement.

Humanitarian crisis in Lebanon today

Eleven years later, Ethiopians in Lebanon remain in circumstances that are just as dire if not worse than what former consul Asaminew Debele described. Ethiopians in Lebanon have been pleading to be evacuated from the country since November as a late 2019 financial meltdown in Lebanon has put many domestic workers out of a job, penniless and at risk of starvation. It’s a situation that has been compounded by the subsequent outbreak of covid-19 in that country. Repatriation of stranded, jobless Ethiopians on the brink of starvation seems unlikely. When pressed on the issue Foreign Minister Gedu Andargachew stated that time would be needed to prepare quarantine locations for large number of arrivals. However, Foreign Ministry’s Director General for Middle East Affairs, Ambassador Shamebo Fitamo suggested that domestic workers in Lebanon aren’t a priority for the government. In a recent tweet, Ambassador Shamebo says “Why you don’t worry about 110 million public Health not to be infected?”.

Ethiopian government officials have made it clear that the repatriations of Ethiopians in Lebanon is simply not on the cards. But for those in dire need of aid, urgent financial support at the very least would dispel fears of an increase in hunger and homelessness among stranded migrants in Lebanon. After all, among those now stranded, are those who a decade ago, saw their own money disappear with the $ 640,000 US transferred to an American lobby firm. AS

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Editors’ note: A picture of an Ethiopian diplomat with Prince Sultan Bin Abdulaziz was erroneously published in this story and was subsequently removed. We regret the error.