Category: Investigations

Kabuga, born in 1935, was a prominent political supporter and financial contributor to elements in the Rwandan government bent on committing genocide. He is accused of helping to plan a campaign of extermination that resulted in approximately 100 days of violence in 1994.

The Rwandan Genocide left 800,000 dead between April and June 1994 in a massacre that targeted the Tutsis, a minority ethnic group. Hutu militias began the killings after Rwandan President Juvenal Habyarimana, a Hutu, was killed when his plane was shot down in April 1994. The immediate conflict ended after a Tutsi militia, the Rwandan Patriotic Front, captured Rwanda’s capital city Kigali.

The allegations against him include giving violent extremist elements financial support for massacres, importing large quantities of weapons, and founding and directing the Radio Télévision Libre des Milles Collines, which broadcast messages inciting genocide. For these and other crimes the International Criminal Tribunal for Rwanda, now known as the International Residual Mechanism for Criminal Tribunals, indicted Kabuga on charges of genocide and war crimes and issued a warrant for his arrest.

Kenya Link

When former Kenyan dictator Daniel Arap Moi played host to Agathe Kanziga, widow of former Rwandan military dictator Habyarimana in the 1990s, many people believed he was consoling her and giving her survival tips in life as a widow considering his decades experience as a separated old man.

The case of Felicien Kabuga, however, could then later show what money can do.

He was a member of the privileged core of persons that surrounded the all powerful wife of Habyarimana and her feared brothers in the army.

With the domestic agitation for multiparty rule and the Rwanda Patriotic Front/Army (RPF/A) scoring victories on the battlefield, the ruling party MRND allowed other political parties to be set up. Kabuga used his wealth to thwart the progress of these parties by buying off members of the opposition, to sow disunity and infighting in the hope of frustrating coherence and elongating the stay of MRND in power.

Faustine Mugenzi and Pauline Nyiramasuhuko who thwarted the efforts of the Liberal Party, leaders of extremist CDR, Robert Kajuga and Ephrem Nkezabera the national leaders of Interahamwe were on Kabuga’s payroll.

With real possibility of a peace settlement in negotiations in Arusha, he set up and directed the operations of Radio RTLM, urging that the station should become the official radio of Hutu Power and funded Kangura Newspaper that were instrumental in indoctrinating the Rwandan people with an extremist Hutu ideology based on hatred and ethnic violence, and urging people to “work” by hunting and killing ethnic Tutsis during the genocide.

From 1992, through his company “ETS” Kabuga imported and distributed hundreds of thousands of machetes from Kenya in preparation for the genocide. Kabuga provided logistical assistance to the Interahamwe by supplying weapons and uniforms, and by providing transport to them in his company vehicles easing their mobility, speed and scale of massacres.

On  April 25, 1994, in the prefecture of Gisenyi, Kabuga, and others reached an agreement to create the National Defence Fund (the Fonds de Défense Nationale-FDN) in order to provide assistance to the ordinary Hutu folks to kill Tutsis.

This fund was created in order to buy weapons, vehicles and uniforms for the Interahamwe and the army throughout the country.

Kabuga was appointed as President of the National Defence Fund’s Acting Committee. On May 20, 1994, Kabuga informed the Interim Government about the existence of this fund and counselled the government on how to manage and use it.

In June 1994, Kabuga and others held a meeting in Gisenyi, in which attendees made a list of Tutsis who had come from other prefectures to seek refuge in Gisenyi which lists, were given to the killers.

When the genocidal regime fell, Kabuga fled to Switzerland but was officially ordered to leave the country. He went to Kinshasa, Zaire before settling in Kenya under the protection of former dictator Moi, Zakayo Cheruiyot, a former powerful civil service chief and one of Mr Moi’s closest advisers and one of his (Kabuga) nephews. Cheruiyot became the MP for Kuresoi South on a URP ticket in 2013.

In an exclusive interview with API a Norwegian based blog, Kabuga revealed details of his stay in Kenya.

Kabuga confirmed that he had lived in Kenya for many years and travelled in and out of the country using different names.

He said a number of senior security personnel in Kenya always knew of his whereabouts and were good to him. However, he complained he had to part with a lot of money every month to satisfy their demands.. Some of them even facilitated travel documents in time of need. “I bought houses for 3 security men and gave a lot of money to others who wanted to establish private businesses that they will be engaged in when they soon retire.”

When asked why he had to leave Kenya in a hurry, he said the officers had become greedy and wanted more and mote, some even started to threaten him of arrest if he did not become more generous.

Warned of possible arrest

One evening at eleven pm, two officers summoned him to a car park near Carnivore and warned him of a possible arrest because two of his protectors had been transferred to another province and could no longer be around to intervene whenever there were discussions about what to do with him. Kabuga said the two men advised him to seek refuge elsewhere because if he were to be arrested in Kenya, it would become an embarrassment to the government and those who have protected him all these years would easily be targeted. Kabuga said the changes in Kenya politics had made life difficult for him. Moi was out of power and Kibaki took the reign. It affected his businesses and properties. The changes that were being made all the time in the security service by the Police Commissioner destabilised his protectors. Some were posted outside Nairobi to remote areas and that put his security in danger

“The political situation was also not conducive any more because my friends are shifting allegiance because of the political landscape”, Kabuga told API.

“I bought houses for three security men and gave a lot of money to others who wanted to establish private businesses that they will be engaged in when they soon retire,” he said in the interview.

The freezing of assets

When asked then what his reaction is to the court ruling in Kenya freezing his assets, Kabuga said he was angered and would not entertain such a thing. “It is my sweat and those who take it from me will be made to give back forcefully,” he says roaring, adding “I have never stolen from anybody and I will not accept a court ruling that steals from me. Many people will be angry if Kenyans steal from me. Someone is misleading the judge or bribing him. Otherwise how can he do this to me?”

Investigations by a joint team of CID officers and investigators from ICTR, Kabuga and his wife jointly own a Spanish Villa in Milimani, House No. 6 on LR No.1/1154).

Mr Kabuga acquired the property in 1995 and three years later, KTC Ltd was contracted by the couple’s daughter Bernadette Uwamariya to manage it.

Although the physical address of KTC Ltd is not known, the company had been collecting rent and depositing it in an account that was owned by Mr Kabuga at the Commercial Bank of Africa. The account was then closed in 2005 and the Sh3.4 million in it wired to an account Mr Kabuga co-owned with Ms Mukazitoni in Belgium. Since then, KTC has been wiring Sh290,000 in French Francs every three months to Banque De La Poste in Belgium.

Initially, the rents were collected by Kenya Trust Company Limited who used to deposit the same in the Account No.24872 of Kabuga at the Commercial Bank of Africa, Wabera Street.

Wealth in Kenya

According to ICTR documents, Felicien Kabuga is a wealthy Hutu businessman is believed to have vast interests in Kenya.

He is associated with three companies, including Hashi Empex Limited at View Park Towers, Ndimo Company limited, Zadok Transporters and Zadok United.

Zadok was incorporated on October 15, 1998 and given certificate number 82983.

The directors of the company listed as Francis Ngira Batware and Jean Bosco Simiye of post office box 13781, Nairobi.

A Nairobi lawyer Ms Lucy Masua of box 34546, Nairobi, filed the papers for the incorporation of the company.

A physical check at the company’s offices at Young Traders complex near city stadium did not yield much.

The office is located in godown number six; there is no sign or name on the gate.

Besides the transportation business, Zadok is also involved in furniture at a shop in Panari House along Mombasa road.

Another company, Hashi Empex has its offices on the fifth floor of View Park Towers where they deal in petroleum products.

The files for Hashi and Ndimo could not be located at the registrar of companies.

Kabuga’s real estate holdings are suspected to include a large house in Athi River town and the Spanish Villas flats along Lenana Road in Nairobi.

He, however, has registered these properties using proxies.

He is said to own shares in a Westlands shopping complex and another in Kericho together with a minister.

In Naivasha, Kabuga is said to own shares in a hotel in the town centre.

The fugitive is also said to own vast interests in farming including a farm in Kajiado district, Njoro in Nakuru District and Eldoret in Uasin Gishu District.

Kabuga is suspected to be one who bought a large tract of land in Kilifi District that was once owned by the family of former Rwanda president Juvenal Habyarimana.

In 2002 the US offered a reward up to US $ 5.000.000 for any information leading to the capture of Kabuga. In 1997, when Kenyan detectives raided a Nairobi townhouse where Kabuga was alleged to be hiding, they found only a note written by a senior Kenyan police officer, warning Kabuga of his impending arrest.

In 2002, 27-year-old businessman William Mwaura Munuhe reached the American Embassy in Nairobi willing to reveal the location of Kabuga ( after he and Kabuga had had a disagreement) but the involvement of senior Kenyan police left him lying on his bed with a bullet hole in his head.

It emerged that Munuhe had hatched a high profile plot to lure Kabuga out of his hideout and deliver the fugitive to the law. As anyone could guess, Munuhe would have pocketed over Sh300 million.

But something went tragically wrong. The hunted man apparently sensed danger and went after his pursuers.

Munuhe was found dead in his apartment, with a charcoal stove in the same room. Apparently, his killers wanted it to look like he died from carbon monoxide fumes.

But his relatives insisted Munuhe never had such a stove, nor did he use any such apparatus to cook.

Days later, it emerged that just before Kabuga could be ensnarled, Munuhe lost contact with his collaborators and calls to his cell phone went unanswered.

The police sensed something was terribly amiss and they went to his house, where they found that he had been dead for hours.

Kenyan police confirmed Munuhue was an associate of Kabuga and Cheruiyot. Mr Munuhe implicated former Internal Security permanent secretary Zakayo Cheruiyot after an extortion bid flopped. He claimed that the wanted man used his fortune to buy protection from Mr Cheruiyot. Mr Cheruiyot denied the claims.

The United States did not confirm or deny whether Munuhe worked for them but however accused the governed hiding the fugitive.

In a speech given on August 28, 2006 during his visit to Kenya, then U.S. Senator Barack Obama accused Kenya of “allowing him (Kabuga) to purchase safe haven.”

The Kenyan government denied the accusation and described Obama’s statement regarding Kabuga as “an insult to the people of this country.” On Friday November 13, 2009 ICTR Chief Prosecutor Boubacar Jallow was likely to be in Kenya.

US Ambassador-at-Large for War Crimes Stephen J. Rapp, on Monday November 16, 2009, accused both the Kibaki and Moi governments of refusing to hand over the fugitive, with a price on his head, to the ICTR. Mr Rapp told a press conference in Nairobi that the US came closer to arresting Mr Kabuga in 1997, but the efforts were thwarted by the government of the time.

Mr Rapp, who served at the ICTR between 2005 and December 2006 and was also the chief prosecutor at the Special Court for Sierra Leone, said “Efforts were made to achieve cooperation but that failed.

In July 2012, Army marksman Michael Sarunei would become one of Kabuga’s casualties. Sarunei had told his family that his secret job was to guard Rwanda genocide suspect; he disappeared after taking photos.

A Kenyan oil tycoon wanted for a £61m fraud tried to use the case of “miracle babies” scandal pastor Gilbert Deya to halt his extradition from the UK.

Businessman Yagnesh Devani is wanted by Kenya over an oil scandal that threatened fuel supplies to east Africa’s biggest economy and led to high-level sackings.

Finally, his decade long fight to stop his extradition has been lost.

He faces 19 charges of fraud in Kenya, one alleges Devani and his firm Triton Petroleum disposed of millions of litres of fuel mortgaged to Emirates National Oil Corporation (Singapore) without its permission.

In a last ditch attempt to halt the proceedings Devani claimed that the Kenyan authorities could not be trusted to place him in a suitable prison and cited the case of alleged child trafficker Deya who was extradited to Kenya in 2017.

Deya, a self-proclaimed Archbishop, had set up a ministry in London and claimed to be able give “miracle babies” to infertile women through prayer.

But in reality, once the women were taken to Kenya they were convinced they were in Labour then given babies taken from local women.

He was extradited on the grounds that he would be kept in a self-contained cell, but six days after he left he claimed in a newspaper interview he was being kept in a “filthy dungeon” with 11 other offenders and was being eaten by flies.

Devani attempted to use this in London’s high court in a bid to show his human rights would be breached if he was returned.

Despite a judge at an earlier hearing halting proceedings due to the report, an appeal by the UK’s Secretary of State has been successful.

Lord Justice Underhill has rejected Devani’s claims and has ruled in favour of his extradition.

“The evidence before the judge was an online news report. It is unverified and is no more than anecdotal evidence that Kenya had breached assurances in respect of another person,” he ruled.

“Mr Deya was, to put it no higher, a witness whose reliability was highly questionable.

“In my view, the weight to be attached to this news report is limited. It has no special force. It does not begin to provide the evidential weight required to undermine the specific assurances given by senior office holders in Kenya. To make the finding which she did, the judge must have attached considerable weight to this report which it simply does not carry.

“In my judgment, it was an assessment of evidential weight which can only be described as perverse and as such represents an error of law. The article did not undermine the specific assurances given by the Kenyan officials. They are assurances which have been accepted in order to meet the respondent’s challenge that in extraditing Mr Devani his article 3 rights would be breached.

“Accordingly, and for the reasons given, I would allow the appeal and would determine that Mr Devani’s extradition to Kenya would not breach his article 3 rights.”

Devani, 55, was arrested by London’s Metropolitan Police in 2011 on suspicion of conspiracy to defraud.

Kenyan authorities allege the state-owned Kenya Pipeline Company (KPC) released petroleum products worth £61 million to Devani’s company, Triton Petroleum, in 2008.

The oil products were being held as collateral for bank loans to KPC.

The head of KPC was dismissed in January 2009 and the scandal caused ructions in Kenya’s fragile coalition government.

Police accused Devani of stealing £9.9m from Kenya Commercial Bank, one of the banks that had loaned money to KPC, and issued an arrest warrant for him.

Patrick Lumumba, the then director of the Kenya Anti Corruption Commission (KACC), said at the time Devani’s arrest hailed a new phase in the nation’s bid to stamp out corruption.

“His (Devani’s) arrest is a very major step against corruption. It opens a new phase in the fight against corruption in Kenya and is also a message to others — you can run but you can’t hide,” he had said.

Mr Lumumba said Kenya has had a long-standing request with the British government for Devani’s arrest and extradition.

He said Devani may have multiple citizenships, but had committed a crime in Kenya while living and working in the country and would be subject to Kenyan laws.
By The National

In a letter written to EACC and copied to Kenya Insights, a dossier dives in to unearth the dirty dealings the bank had indulged in. Read the dossier below.

Hello,
I am an employee of Paramount Bank and the various real estate companies that operate from the same offices at Sound Plaza.

PLEASE! PLEASE! HIDE MY IDENTITY.

I am an internal clerk at Paramount Bank and I have some information to share with you. This is what I have managed to gather from my junior position. I have been here for 1.5 years now. I can tell you this this is a crooked bank that enjoys protection from some Central Bank people. I can also tell you that proceeds of this are used in Real Estate developments by Anwarali Noorali Merali Padany, the Executive Chairman of the Bank and real estate companies. His son Ayaz Merali is the CEO. Every important decision in these companies is done by family only. The Africans are for show only and are only allowed to handle regular Kenyan accounts like staff members of his company’. This is just to cover for the illicit business that goes on there.

Paramount bank.

Used for money laundering and the proceeds invested in real est. Akila 1 and 2., Nuriana Apartments, Jannah Villas/Apartment and the Alina Villas in Lower Kabete for later.
Tormount holdings, one of the shareholders of the bank have been mentioned in illegal activities in the Panama report.

This is from here https://offshoreleaks.icij.org/nodes/10071671
Remember Paramount Bank at some point bought another Muhindi Bank, Universal Bank. These banks were all set up during Moi days for siphoning money out of Kenya and for money laundering. Merali was at some point taken to caught by another crroked Bank, Trust Bank for crazy dealing leading to the collapse of Trust bank. http://kenyalaw.org/caselaw/cases/view/54571.
Merali has for long been invoved in dirty deals with Lands officials using the bank as the money conduit. Here is one of the cases that bust and was documented. http://theinformer.co.ke/12363/paramount-bank-entangled-in- sh30million-loan-fraud/

The African workers in the Bank are kept busy with small accounts of Kenyans but the wahindis are served in a special room. Sometimes the bank is closed in the afternoon when money is brought in, systems reconfigured and money is cleaned. I was told by a guard who had observed the trend.
The elite Asian bankers who exclusively serve the Asians are paid double what we earn and all they do is act on laundering instructions from Merali.
We have separate toilets for Asians and Africans. Africans here are for dealing with the Africans, just for show. The same happens in their Real Estate arm. As you will see.

Real Estate.

Merali has developed Akila 1 & 2, Nuriana Apartments, Alina Villas and Jannah Villas/Apartments using laundered money. The homeowners of these properties can attest that they were forced to work with only one lawyer and they only had Paramount Bank as a mortgage option. This is how they hide their deals and use the information circle. It is also how Merali manages to show that his bank is a regular normal bank.
We are now dealing with a case of homeowners in Jannah Villas who are being asked to add over 3M each after 6 years of waiting for their Shares in the development and for their Titles.

Imagine Merali convinced them to buy the house and hand over management and sub titles by 3 months. 6 years later they have been told to pay more to get what they should have gotten 6 years ago. All these new charges are out of the sales agreement and since Merali never handed over management, he says he has the sole right to decide on all manner of costs and demand for them. He has threatened not to register the sub leases unless he is paid this money. He sold incomplete units without a sewer and a wall and is now demanding that from them. Absolute corruption and intimidation because he is connected at lands. This is how he recovers his bribery money by fleecing poor Africans.

Some of the owners are threatening to sue for 150m for loss of use of property, the have not been able to show ownership of their property despite paying in full 6 years ago. Some have tried to use the agreement to get loans but have been turned down by banks because they do not have the title or sub-lease. This will be messy becaue there are 80 houses and Merali only managed to sell half and hence has to find a way to recoup his investment by ovcer charging the poor African buyers. The house owners were not aware that Merali had not gotten approval to build the houses and therefore sold them illegal structures.

The title was only approved for construction in 2017 (4 years later) and at the time of the sale, the Title belonged to Tanad Properties and was not approved for apartments. Some of the leases were registered in 2018. 5 years later.

The houses were built without a sewer and used to drain to NAIROBI river in collusion with NEMA and County planning officials who are on a monthly salary from Merali through Paramount Bank in dummy accounts. They are now being asked to pay charges which they neither knew of or consented to as owners.
This case will be big and will expose the corrupt networks at Nema, Lands and County who have allowed Merali to continue conning Kenyans. It is the same officials who have allowed the construction of executive villas by Merali (ALINA VILLAS) in Lower Kabete that the late Wangari Maathai fought against https://nairobinews.nation.co.ke/news/multi-million-buildings-built-on- wetland-to-be-demolished. During this past demolition exercise, 250m was used to keep bulldozers away. These bribery costs are later passed on to buyers for spurious reasons. Sound Equipment Ltd is another of Merali’s companies and the owners of Sound Plaza Westlands, the HQ of Paramount Bank and Merali’s offices.

I will get more information and pass it over. This is information I have gathered from documents I have been sent to deliver across offices and I have used my phone to scan. Others are from the net.
Thank you.

The African Development Bank Group, on 20 April 2020, announced the debarment of Sinotec Company Limited, an energy solutions company registered in China. Pursuant to a decision by the Bank’s Sanctions Appeals Board, the company will be debarred for a period of 36 months for engaging in fraudulent practices.

An investigation conducted by the Bank’s Office of Integrity and Anti-Corruption established that Sinotec Company Limited misrepresented its experience, the value and dates of its reference contracts and its relationship with other bidders while participating in three Bank-financed tenders under the Regional Rusumo Falls Hydropower Project in Rwanda, the Uganda Rural Electricity Access Project and the Last Mile Connectivity Project in Kenya.

The debarment renders Sinotec Company Limited and its affiliates ineligible to participate in Bank-financed projects during the debarment period. The debarment qualifies for cross-debarment by other multilateral development banks under the Agreement for Mutual Enforcement of Debarment Decisions, including the Asian Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank and the World Bank Group.

At the expiry of the debarment period, Sinotec Company Limited will only be eligible to participate in Bank-financed projects on condition that it implements an integrity compliance program consistent with the Bank’s guidelines.

The Regional Rusumo Falls Hydropower Project was financed by the African Development Fund, a constituent entity of the African Development Bank Group, and aimed at developing sustainable energy infrastructure to increase power generation and access to electricity through the construction of a hydropower generation plant and of transmission lines and substations.

The Uganda Rural Electricity Access Project was financed by the African Development Bank. The objective of the project was to support long-term and short-term development strategies of the Government of Uganda through improving access to electricity by building medium and low voltage distribution networks and last mile connections to the grid.

The African Development Bank also financed the Last Mile Connectivity Project to increase electricity access through the supply of distribution material, construction of low voltage distribution lines as well as capacity building activities.

At a time when South Sudan’s government most needs to generate resources for urgent public health-related challenges including the Covid-19 pandemic, one of its promising revenue streams is beset by mismanagement and corruption. The Sentry’s latest investigative report reveals how South Sudan’s promising gold-dominated minerals sector is riddled with corruption involving President Salva Kiir’s relatives and inner circle, military leaders, and other high-level officials. Published today, the report further exposes illegal mining now underway in Eastern Equatoria state, where the governor has ties to numerous mining businesses, as well as the Ministry of Defense’s involvement in problematic mining licensing deals.

“Untapped and Unprepared: Dirty Deals Threaten South Sudan’s Mining Sector” warns that, without strong reforms, abuse in the minerals sector could spur the same kind of resource-driven violence that plagued the petroleum industry throughout civil wars fought on South Sudanese soil dating back to the 1980s.

John Prendergast, Co-Founder of The Sentry, said: “Through close relatives and allied government officials, President Salva Kiir is linked to dozens of mining companies in South Sudan. The president’s core network has used its control of the minerals sector to consolidate its grip on South Sudan’s state revenues and natural resources. If South Sudan’s people are to benefit from the country’s mineral wealth, including lifesaving healthcare urgently needed in the face of a global pandemic, financial institutions should take immediate steps to identify and monitor the bank accounts of those in power, their business networks, families, and inner circles.”

The Sentry further established that Kiir’s close associates and lower-level ministers have held shares in no fewer than 32 South Sudanese companies established to extract minerals. The government has yet to disclose crucial information about their ownership structures, activities, or open applications for licenses, undermining public scrutiny of a sector already at heightened risk for corruption and raising questions about who benefits from South Sudan’s mineral wealth.

Sophie Lombardo, Investigator for The Sentry, said: “Without swift action, South Sudan’s mining sector may fall into the same traps as the oil sector, which has helped drive war in South Sudan for decades. Military interests abound, either through joint ventures with private investors or companies controlled by the Ministry of Defense. The Sentry’s investigative findings reveal opaque and questionable deals that raise significant concerns about secret off-budget revenues within an institution marred by a history of abuse.”

J.R. Mailey, Investigations Director at The Sentry, said: “Today, widespread corruption, mismanagement, and poor oversight in the mining sector are intertwined in a vicious cycle. Individuals linked to criminal activities have received numerous mining licenses, as have companies with little technical or financial capacity, raising serious questions about how licenses are granted. The mineral sector in South Sudan is still in its early development stage, however, so the implementation of critical reforms can deliver enormous benefits for the future of the country. Policy action is needed now, such as the creation of a regularly updated public online register disclosing the beneficial ownership of mining sector businesses.”

Report highlights:

Although South Sudan took welcome steps to reform the mining sector in 2012, some government officials, their relatives, and their close associates have fostered a weak regulatory environment susceptible to exploitation.

Memoranda and articles of incorporation reviewed by The Sentry reveal that politically exposed persons–both President Salva Kiir’s close associates and lower-level ministers–have held shares in no fewer than 32 South Sudanese companies established to extract minerals.

Kiir’s daughter partly owns a company with three active mining licenses.

A company with three mining licenses lists former Vice President James Wani Igga’s son as a shareholder.

Ashraf Seed Ahmed Hussein Ali, a businessman commonly known as Al-Cardinal who was placed under Global Magnitsky sanctions in October 2019, reportedly owns the company currently holding the most mining licenses.

In the gold-rich region of Kapoeta, state government officials have issued licenses independently of the central government, a probable violation of South Sudan’s Mining Act that has allowed illegal mining to take place on land previously allocated by Juba to other companies.

South Sudan’s military has developed problematic mining interests in an effort to address budgetary shortfalls.

Key recommendations from the report:

South Sudan government:

Create a public register disclosing beneficial ownership. Key company ownership information remains inaccessible to the public. A regularly updated public online register would promote good governance and serve as a vital accountability tool for anti-corruption advocates, civil society, and political parties. Moreover, such a move would encourage legitimate investment and demonstrate the government’s commitment to building a more transparent system.

Conduct a retroactive audit of the mining sector. Numerous red flags in South Sudan’s mining sector highlight the country’s susceptibility to state capture. In order to assess the effectiveness of the process of awarding licenses to technically competent, legitimate enterprises, the Ministry of Mining should hire an independent external party to retroactively audit all mining companies currently operating in South Sudan. The ministry should further investigate the beneficial owners of mining companies and determine whether politically exposed persons have unfairly profited. As an example, independent audits have been required prior to resuming certified exports following the moratorium implemented as part of the government-led Kimberley Process initiative to clean up the diamond trade.

United States government:

Issue responsible investment reporting requirements. The US Department of State should encourage responsible engagement in South Sudan’s mining sector by implementing investment reporting requirements for US persons. Much as it did in Myanmar, the agency should require companies to file publicly available reports detailing their due diligence, community engagement, human rights, anti-corruption, and environmental efforts within their operations and policies.

Issue a public advisory listing typologies and enhanced due diligence measures. Building upon the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN)’s two anti-money laundering (AML) advisories referencing political corruption in South Sudan, the United States should consider issuing an update or a separate advisory sharing with financial institutions the latest methods and trends used to launder the proceeds of illegal mining and the extractives industry.

Expand US sanctions authorities. South Sudan’s conflict dynamics have evolved significantly since then-US President Barack Obama issued EO 13664 in 2014. The US president should issue a new executive order, or amend EO 13664, to provide additional authorities for targeting illicit financial activity.

Update sanctions designation criteria to include family members. The current order should be amended to permit the designation of individuals who are the spouses or dependent children of (i) any person whose property and interests in property are blocked pursuant to EO 13664 or (ii) any South Sudanese person blocked pursuant to EO 13818.

Target captured business sectors. A new executive order should limit or prohibit US persons from conducting business with foreign persons who are active in key sectors of South Sudan’s economy that are captured by regime elites, including the mining and oil industries. Business prohibitions or requirements to report publicly on due diligence measures could emanate from this effort.

United Kingdom and European governments:

Issue a public anti-money laundering advisory to financial institutions warning about the extractives industry’s corruption risks. The UK’s National Crime Agency (NCA) and relevant national authorities across continental Europe should issue public AML alerts or advisories on corruption in the extractives sector, citing the risks of laundering the proceeds of corruption in oil, gold, and other natural resource sectors requiring licenses. In order to assist financial institutions in updating their customer due diligence and ongoing monitoring frameworks, an advisory should include typologies and red flags identifying methods that bad actors could use to siphon illicit funds out of South Sudan. These advisories would complement the alert issued by the NCA in February 2020 on illicit money flows related to South Sudanese political corruption.

A freight cargo company is in the spotlight over links to an alleged tax evasion syndicate through the import of undervalued and undeclared goods estimated to have denied the public at least Sh 5 billion in taxes.

The matter unraveled last month after cargo cleared by Rolling Cargo Company Limited was allegedly lost on its way from African Cargo at Jomo Kenyatta International Airport (JKIA) to Eastleigh at firm’s cargo warehouse.

According to police Occurrence Book dated April 9th, Mohamed Hassan Mohamed, the director of Rolling Cargo Limited reported that he had lost 750 cartons of assorted mobile phones valued at Sh120 million while on transit.

Mohammed said motor vehicle registration number M/V KBZ 628X went missing before reaching the destination within Eastleigh section 111, the case was reported on 10/4/2020 and on search the M/V was recovered within Mara road and seven cartons of assorted mobile phones recovered.

“Offence: stealing c/section 268 as read with 275 of the penal code ref my CR 134/72/2020, my OB 75/10/4/2020, it was reported by one Mohamed Hassan Mohamed c/o 0722722441 and the director of Rolling Cargo limited, Nairobi, that 0n 9/4/2020 he hired m/v KBZ 628X ISUZU driven by one Daniel Kavuti, Kamba male aged 40years,” a report by DCI Buruburu, Kamukunji sub county read in part.

It adds: “The same was to Transport 750 cartons of assorted mobile phones valued at sh 120,000,000 from African cargo at JKIA to Eastleigh at rolling cargo warehouse. The said motor vehicle went missing before reaching the destination within Eastleigh section 111.”

In what detectives from the Directorate of Criminal Investigations (DCI) suspect to be a larger tax evasion conduit through smuggling and importing valuable and undeclared goods in form of electronics, the firm is suspected to be part of a cartel that evades paying taxes when importing electronic cargo from the Middle East such as Dubai and China via JKIA.

DCI investigators and officials’ customs department at KRA are now pursuing possibility of mis-declaration of the consignment or conspiracy to smuggle taxable products.

On Monday, the sleuths while on a fact finding mission to the African Cargo Facility over the entry of contraband electronic goods, stumbled on newly arrived consignment of electronic goods mainly mobile phones.

Its included mobile phones waybills (# 071 35925960, Awb# 071 3592 5956, Awb# 071 3592 3370, Awb# 071 3592 3366) and other of the previous shipments.

According to police sources, the goods had been undervalued to evade levies due to the government, which led to the conclusion the existence of an organized cartel that has been fleecing taxpayers of billions of shillings.

A waybill (UIC) is a document issued by a carrier giving details and instructions relating to the shipment of a consignment of goods. Typically it will show the names of the consignor and consignee, the point of origin of the consignment, its destination, and route.

Forensic experts from the economic crime section of the DCI have already been deployed to comb through a mountain of company records and contracts with various traders drawn from Nairobi’s CBD, Eastleigh, and Eldoret.

According to the investigators, the freight cartel’s illegal activities include allowing contraband goods into the market, false declaration of the value of imports to attract less tax or failing to inspect all containers, thus allowing substandard goods into the country.

In addition, the firm in cohort, with KRA rogue officials were said to be colluding with corrupt traders to facilitate false declarations to deny the taxman requisite taxes such as import duty. They also allow in counterfeits in exchange for bribes.

“This Rolling Cargo Company Limited has been stealing from Kenyans by undervaluing the goods they bring in the country, in adding to failing to declare their manifest,” a senior detective involved in the investigation said.

“He is a major player of substandard electronic goods that doesn’t have CoC( certified by a Verification company from country of origin) into Kenya,” he added.

According to CR 12, Omer Abdi Gule and Mohamed Abdi Gulet are listed as owners of the Rolling Cargo Company Limited while Stella Nyamu is listed as a sole secretary.

Bank of India is facing a staff revolt over the manner in which a senior manager is handling employee issues. They are also unhappy that the bank’s headquarters in India has ignored their complaints. We have learnt that frustrated staff are plotting industrial action to protest the move by a manager, Vinay Nagar Upkari, to unilaterally convert their Christmas bonus for 2019 into loans to be deducted from the salaries.

They have also accused Upkari of being anti-Christian and treating his juniors as slaves. Back and forth correspondence between staff and the management has not alleviated the staff’s concerns, forcing them to consider a strike or go-slow. On January 7 2020, Upkari authored a memo informing the staff that “Competent authority has decided that henceforth, installment with respect to Christmas advance to be included under loan deductions for computation of staff loan eligibility”.

This communiqué did not go down well with the staff, who responded, through a letter addressed to the Head Office in Mumbai, under the title: Unethical and Biased Approach of Vinay Nagaraj Upkari (AGM, CE Office, and Nairobi) for local (Kenyan) employees of Bank of India, Kenya Centre. “We would like to draw your kind attention on our email dated 13th January 2020 and 14th February 2020. We are feeling sorry to say that despite knowing all the facts by all the 03 emails, the bank has not taken any action against Mr Vinay Nagar Upkari. He is an anti-Christian person and treating us very badly like his slave, as we are not the employees of Bank of India. He has issued a circular on 07th January 2020 without having any authority for deduction of Christmas advance installment for the purpose of calculation of deductions in other loans as it never happens in the history of Bank of India, Kenya Centre.”

Another issue is the flooding of Kenyan branch with ill-qualified Indian expatriates at the expense of well qualified Kenyans. “Bank of India has flooded the India based officers at the cost of trained and professional local employees. chief manager (IT) and the senior manager (operations) have no professional qualification for their respective post, (they are simply general banking officer from India) while, the trained IT and HR persons are easily available in Kenya,” the letter further stated.

The staff also accused Upkari of flouting Central Bank of Kenya regulations. “Johannesburg branch (South Africa) is functioning under Bank of India, Kenya Centre and Mr Upkari is doing audit of Johannesburg, branch (South Africa) for a long time and enjoying the foreign trip(s) every quarter and getting all the remuneration at the cost of local con-current auditor (Local employee of Bank of India) at Bank of India, Kenya Centre. Normally, this concurrent audit should be done strictly by local concurrent auditor only.” “It is important to note that a compliance officer of the center cannot be a concurrent auditor.

He has violated the norms of Central Bank of Kenya and Reserve Bank of India. While doing concurrent audit of Johannesburg branch (South Africa), he used to put his comments and observations as auditor and at the same time he is recommending as risk and compliance officer for closure of audit reports/remarks (which were audited by him) to competent authority, which is the gross violation of guidelines and more important thing that he is doing at the cost of local con current auditor of the Kenya centre.

The reputation of the center/ industrial rotations is at stake. Hence, you are once again requested to take immediate action in this regard.” We could not get a comment from the management as the MD said he would seek clearance from their headquarters first before responding. He spoke through a spokesman, which leaves a lot to be desired.

It’s highly likely that if you’ve seen the giant billboards in many streets here in Kenya, you’ve certainly noticed the brand. Arguably the most prolific force behind the billboards is identified as Magnate Ventures, a company ran by a highly reclusive billionaire Stanley Kinyanjui, who started it in 1998.

The entrepreneur is among President Uhuru Kenyatta’s close friends, whom he hangs out with in private and was a part of the clique that came together in 2017 to sponsor his reelection bid that saw over Ksh1 billion raised in one sitting.

He was one of the conveners of the Friends of Jubilee Foundation that was was bent on coming up with funds to oil the Jubilee Party’s bid to retain power.

Magnate Ventures describes itself as the pioneer of outdoor advertising; billboards, street signs, hoardings and event branding in East Africa, with operations based in Nairobi Kenya.

According to its website, it commands a 50% market share in Nairobi, 40% in Mombasa, 60% in Kisumu, 63% in Eldoret and 57% in Nakuru, and boasts over 1,200 billboards.

Kinyanjui runs the company alongside his younger brother, Robert Kinyanjui, as reported by How We Made it In Africa Magazine in 2013.

While the profile beams of glamour, scandals are creeping in. EACC is now following leads and investigating claims that the company had been evading taxes in the last 7 years.

According to a whistleblower report sent and received by EACC, Magnate has evaded upto Sh3B in taxes. “I’m aware that that fir a period of at least 7years, Magnate Ventures has undeclared it’s income by understating the number of billboards owned.” Reads the report obtained by Kenya Insights.

It continues, “Magnate Ventures owns over one thousand (1,200) billboards countrywide. However, in a deliberate attempt to gain a tax benefit, Magnate Ventures has been declaring that it owns about 100 billboards in Nairobi while the true declaration is contrary to their declaration.”

The report goes further to implicate the Nairobi’s Governor Sonko, “all this has been done with the full knowledge and connivance of the Nairobi Governor Sonko and the planning department at Nairobi County whom have participated in sharing our bribes given by Stanley Kinyanjui of Magnate Ventures. This has resulted in the loss of over Sh3B in taxes to the people of Kenya.” Reads the report to the EACC.

Kinyanjui is however not new to fraud claims, last year, the president’s close ally was linked to faulty Sh600m airport security tender. At JKIA, DCI sleuths probed how a multimillion tender for supply of scanners was awarded to Magnate Ventures Limited, which supplied faulty machines.

Kenyans will be curious how this case goes now that KRA claims to tighten the noose on tax evaders and reportedly rewarding whistleblowers handsomely. We will be following and update you on how everything goes. The letter was received by the KRA commissioner Investigation and Enforcement Department in 27th April, 2020.

Mobile Lenders in Kenya are really the bottom of the barrel, initially, the field remained unregulated and attracted many crooks who banked their hopes on the desperate and uninformed citizens to not only give loans at exorbitant interest rates but also invaded their privacy.

Okash, Opesa both of which we’ve gathered are owned by Chinese nationals have been a Centre if bad press and they have themselves to blame. We’re going to come back to this later on.

Kenya Insights has obtained communications between the company’s directors and their debt collectors showing a total disconnect and a rogue employer.

The firm has about 600 agents most are now working from home after police raided their offices for working despite government’s directive of working from home. Now, the workers are being asked to work for almost 12 hours a day as credit collectors and are under constant threats. They work 6 days a week. “We’re really suffering from these Chinese but we’re desperate as we have no other jobs and they’re taking advantage of this to harass us, please help.” One of the workers talking to this writer said.

In their contract they signed with the company that we’ve seen, they should be working from 8am to 5 pm which is 8 hours a day and lunch break of one hour, now they’re forced to work for the 12 hours a day with a 30 minutes lunch break and are constantly under threats. We also gather that a Chinese only identified as Yu is on the frontline and often call the agents directly and he doesn’t have nice words.

They’ve obviously contravened the terms of the contract and abusing their power on helpless Kenyans. As they sit comfortably in Beijing, they’re making life more unbearable for Kenyans who now have to deal with Wuhan virus and rogue employers.

One of the least-acknowledged and perhaps most insidious aspects of digital credit is the way it is expanding the reach of governments and corporations into people’s everyday lives. Financial technology, or fintech, is commodifying the routine habits of Kenyans, transforming their behavior into reputational data to be monitored and assessed.

Then there is the issue of data capture. Safaricom is not only dominating Kenya’s once cash-based, “informal” economy through services like M-Pesa; it is also collecting a great deal of data on customers and their consumer habits through their phones. According to the watchdog group Privacy International, mandatory SIM card registration laws have enabled “a more pervasive system of mass surveillance” throughout Africa.

Fintech companies have gained unprecedented access into the lives of ordinary Kenyans. They use everything from GPS data to how often people call their parents to social media feeds to assess customers’ creditworthiness. As Sofia Zab, former Director of Marketing at Branch, told Kenya’s Standard Media: “We use smartphone data to build a financial identity for applicants. Our machine learning algorithms analyze over 2000 data points to make lending decisions. This includes M-Pesa transaction SMS, call behavior and handset information.” Credit analytics firms like the American startup Cignifi are also culling data from unbanked African populations to develop predictive algorithms.

The accumulation of digital credit histories is particularly worrisome in a country that lacks sufficient data protection laws. Many apps have terms of service (like Tala’s privacy policy) that reserve the right to disclose users’ information to third parties.

Last year, a particularly brazen privacy violation occurred when late-paying users of the loan app Okash discovered the company was texting friends and relatives requesting that they “kindly inform” debtors of their loan obligations. As one Twitter user complained, “Okash does not value privacy. If you default [on] your payment by 3 days, they hack your personal contacts and start calling people…They be calling your dad, mum, sister, friends, your ex, landlord…seriously.”

Okash have zero regards for privacy and they continue to operate despite all the cries. Only recently, The CBK announced new regulations concerning information submitted to Credit Reference Bureaus (CRBs) in what has been hailed by Kenyans as one of the wisest moves from the regulator.

In the new directive by CBK, no Kenyan will be blacklisted on the CRB for defaulting less than 1,000 shillings and that all those listed for defaulted below 1,000 shillings should be delisted with immediate effect. Okash and Opesa were blacklisted.

One of their worst conditions and permissions when allowing their app reads “In the event we cannot get in contact with you or your emergency contact, you also expressly authorize us to contact any and ALL PERSONS IN YOUR CONTACT LIST”

Talking of exploitation, the company is notorious. When asked to share their experiences, it was nothing but chaotic, stinking to the high level.

The Government MUST investigate OKASH/OPESA. We can't have apps like these which exploit Kenyans and mine their data unknowingly. These folks are Notorious!

Share Your Opesa/Okash Experience on the Replies.

— BRAVIN YURI (@BravinYuri) April 21, 2020

https://twitter.com/henzeljenzel/status/1252666574508523520?s=21

https://twitter.com/itstrevorke/status/1252671868622049283?s=21

Opesa are real thugs. Borrowed 2k. Now I owe them 7k. This guys charge a late fee. Then continue to charge a late fee for the late fee.

— senussi (@Senussireagan) April 21, 2020

In Kenya, the impact of technology has affected the market economy greatly. The rate at which innovations relating to the use of technology to enable access to finances is rising remains unparalleled. In 2007, Vodafone, through Safaricom, launched MPESA mobile money transfer. The obvious gap that Vodafone sought to fill was that of financial access and inclusion, especially amongst low and middle income earners. MPESA has since metamorphosed into several other services. Kenya is currently facing an influx of lending platforms. It is therefore important to conduct an audit of the legal framework governing this sector to determine its efficiency in the dynamic market economy.

One emerging concern related to digital lending is harassment of borrowers upon default of payment of the loans from lending applications. The Central Bank of Kenya (“CBK”), established under the Central Bank of Kenya Act, (“CBK Act”), is the lead regulator in the financial sector. However, the texture and architecture of the CBK Act anticipated regulation of operations typical financial institutions such as banks.

The provisions of the National Payment Systems Act could be utilised by the CBK, for reason that these digital lending apps operate within its framework. Since 2018, the CBK has hinted at a digital lending charter to regulate digital lending. The charter should contain clauses that will tame lenders from harassing borrowers. To also address concerns of extortion and hidden unconscionable profits on the part of digital lenders, there is need for a provision requiring borrowers to be supplied content on financial literacy. This will help inculcate policies on transparency and disclosure in this sector.

One other concern that must be addressed in this sector is that of infringement of privacy, seeing as borrowers and their acquaintances have their privacy violated in several ways. Privacy includes treating all borrowers with the utmost respect and dignity as they use the digital lending applications.

In the current market practice, upon default of loan repayment, some random persons in the contact list of the borrower are contacted in the guise of enforcing repayment. This is used as a form of default guarantor to the digital loan. In reality, contacting random persons about a loan taken by another without their knowledge subjects the borrower to shame and unintended disrepute. In Indonesia, digital loan applications have been reported to form WhatsApp groups using the contact details of the borrower and an automatic message sent to the chat asking the members to tell the defaulted borrower to repay the loans.

Therefore, at the point of installation of the digital lending applications, there is need to ensure that the consent pop up notices give the borrowers options as to the levels of access that they consent to. It is also significant to ensure that failure to consent to use of data does not deny borrowers a chance to utilise the credit facility as this amounts to coerced or constructive consent.

There is also need to disclose the data obtained and the purpose of obtaining such data. During use of the digital lending application, when personal information changes, the digital lending applications need to put in place measures to facilitate rectification of such information. Additional data sought from the data subject, should be done properly, following strict guidelines as to consent.

It’s unlikely that these people will change their rogue ways of operations so it’s either Kenyans stay away from them or the government bundle them out and save the many at their mercies. But there’s a drop of some hope, Central Bank Governor Patrick Njoroge has intensified attacks against digital lenders, dismissing their role in the credit market, which he mockingly likened to a “flea in the economy.”

Since January, there has been a lot of frustration and uncertainty over the state of Kenyan students in China, especially Wuhan City, where the first case of the coronavirus was diagnosed.

Soon after the spread of the virus, Kenyan students trapped in the region decried frustration caused by a lack of basic supplies, which prompted many Kenyans to lobby for their return to Kenya.

The Kenyan government in response disbursed Sh10M to cushion the students but that money never reached. According to a student’s letter dated 4th April shows only Sh14,000 was given to each student.

“I am in Wuhan and the GOK sent us money to be distributed equally to 86 students. However, the embassy declined to do so and only sent 14000 to each student. Remember we have been and still under total lock down since January 23rd.” The letter reads.

According to a breakdown tabled in parliament by the Health CS Mutahi Kagwe in how they’ve spent the Sh1B given by the world bank, Sh10M was listed as having been spent on Wuhan student in what is a blatant lie according to the students.

“Who are these ghosts that have benefited from the 10 million funds set aside for the Kenyan students in China? To date sources say they’ve not received the funds yet its clearly billed as having been disbursed and spent under mitigation measures.”Kalekye Kasina, a health journalist posed.

The journalist has been in close contact with the students and has consistently been highlighting their plights.

The question that now remains unanswered and must be answered especially by the foreign affairs ministry is where the money disappeared to. The CS, Ambassador must issue a statement and breakdown of how they spent the Sh10M. As it remains, this is a scandal.

Standard Gauge Railways (SGR) project has been a bone of contention, a divisive subject among Kenyans. The problem is that, on one hand, you have intellectuals trying to tell Kenyans how this is a white elephant, something that was and still is a waste of money, on the other hand you have two groups, one group loves it that their journey to and from the coast of Kenya to Nairobi has been shortened to a few hours, the second group just don’t care about governance at all, they are here as passengers.

In February 2020, news broke that SGR landscape designers had used a whoping Sh1 billion on buying grass. Grass, that natural green vegetation that is first to grow in plenty when plantation burns or soil is shifted. How can it have possibly cost a billion shillings to plant it? 

Well, the noise died down amid the danger posed by COVID-19, the pandemic and Kenyans moved on to the next topic. Well, not so fast. 

At least, the original contract, a copy of it, had finally left its lock-and-key-thrown away into the sea cabinet. Kenyans, I mean journalists at the Nation Media Group had got hold of it and had analysed it, therefore confirming the intellectual’s narrative that SGR was overpriced, unnecessary and a cash cow.

It is common knowledge, from online sources and from articles by economists notably David Ndii(From Game Changer to Railway to Nowhere: The Rise and Fall of Lunatic Line 2.0) The Elephant – Speaking truth to power and others like the Ufungamano Group that the SGR project costs were inflated.

Ndii, a force critic of the SGR project has consistently termed it useless.

The Government of Kenya (GoK) and China Road and Bridges Corporation (CRBC) had pushed through with an unnecessary project which made no economic sense so as to grease the hands of leaders both in Kenya and China.

The intellectuals argued that the Metre Gauge Railway (MGR), which the Lunatic Express runs on should’ve been upgraded at a far cheaper cost.

What the SGR contract which has been seen by KenyaInsights says, the level of theft of Kenya money that had been loaned from China was unprecedented to say the least. The railways runs at a cost of Sh1 billion per month, which is unsustainable and losses are bound to accrue from its running. It is even better, ironically, to stop the trains than to run them.

During its planning and construction, the contract reveals that the managers were the greediest of all greedy of the earth. China which prides itself with tough stance against corruption had allowed its staff abroad to engage in blatant abuse, disrespect and theft of resources. 

Apart from the sensational reports that we’ve seen in some quarters, and the manner in which some people still believe that anyone raising issues with costs surrounding infrastructure projects especially SGR are anti-government or hates the Kikuyu government to be exact. No it is not.

According to the contract, there are some information that was left out that was not covered by the mainstream media. The information reveals the level of theft of Kenya taxpayers money, the money was a loan taken in the name of Kenyan taxpayers signed by then Managing Director of Kenya Railways Nduva Muli.

Mr Li Qiang was the General Manager of CRBC and a representative of Chinese government in Kenya. The contract’s names is: Supply and Installation of The Facilities, Locomotives, and Rolling Stocks for the Mombasa – Nairobi Standard Gauge Railway Project.

3). The affiliate firm of China Road & Bridge called China Communication has now been awarded thro' single-sourcing the management of SGR.

— jacob juma (@kabetes) April 30, 2016

4). China Communication Co. will manage, operate and maintain Kenya's SGR with a guaranteed min. return that has been guaranteed by Treasury

— jacob juma (@kabetes) April 30, 2016

5). The Group GM of China Rd & Bridge E.Africa Mr. Li Qiang is the MOST CORRUPT Chinese on African soil.

— jacob juma (@kabetes) April 30, 2016

(Jacob Juma a once influential billionaire who broke ranks with his peers going on to expose their underworld dealings and would later be assassinated wrote in a memoir about the GM on his page “The Group GM of China Rd & Bridge E.Africa Mr. Li Qiang is the MOST CORRUPT Chinese on African soil.”)

6). Mr. Li Qiang is distributing tens of millions of dollars in cash and in various bank accounts all under the code name MK.

— jacob juma (@kabetes) April 30, 2016

7). Mr. Li Qiang should be charged with high treason and corruption even in China.

— jacob juma (@kabetes) April 30, 2016

The claims of inflated costs of the SGR project was in January 2020 supported (not that he didn’t also reveal it in the past) by the African Union High Representative for Infrastructure Hon. Raila Odinga in a local TV station. During the interview Raila said that he and former President Mwai Kibaki in the coalition government had tendered the SGR project at a lower cost, but when President Uhuru Kenyatta and his deputy William Ruto took over in April 2013, they cancelled the contract and re-tendered a fresh at inflated costs. 

“Before we left government with Mwai Kibaki, we awarded SGR tender to a company at USD2.5billion. But when jubilee came in in 2013, they canceled the tender and awarded it back to the same company but at USD4.5billion. Obvious inflation of figures”, Raila Odinga, told NTV Journalist Joseph Warungu.

The contract showed people who were on a frenzy to get rich quick. 

Inflating the costs

Perusing through the contract, it is not a mean fit, the document is big but one cannot escape the charade of Section 13 Appendix A: Non-Binding Bill of Quantities area. This is 44 pages of pure thuggery.

The looters of our country led by UhuRuto saw it fit to raise the prices of basic commodities to levels unpresented for example a mere bench cost Ksh180,000. The prices were quoted in United Stated Dollars (USD) and the conversion rate for this article will be USD 1 for Ksh100.

A battery forklift that costs about Ksh900,000 was bought at Ksh1.37 million. 

Acetylene cylinder normally worth Ksh5,000 was purchased at Ksh38,040.

A good lighting arrester retailing for between Ksh500 and Ksh3000 was sold to Kenya at the price of Ksh11,680.

It is important to note that the prices given already have a mark-up and that the price quoted by the looters of Kenya, the difference is what they took home.

The level of theft that was carried out in this project makes the government and all those that benefited in the inflated costs term real news as fake.

KenyaInsights.com is aware that the Chairman of the Transport and Public Works Committee in Parliament who is also the Pokot South Member of National Assembly David Pkosing told Voice of America (VoA) news that the news about Kenya paying for grass along the SGR route at Ksh1 billion were rumors and fake news. 

“Let them petition parliament and tell us this is inflated for this reason we known. They have no evidence. People when they don’t have evidence, they create rumors and peddle what I call fake news”, Pkosing said.

Though the Kenya government has not made public what they agreed with the Chinese government as pertains to the SGR Project, the contract also revealed as already reported that Digital voice recorders cost as little as Sh2,000 in Nairobi. These small costs here and there multiplied by the number of the gadgets being bought added up to billions of shillings.

CRBC also billed Kenyans Sh38 million to install a passenger guiding system, Sh14.6 million for each security system at the railway stations, Sh26 million for each luggage inspection system and Sh14 million for passenger monitoring systems at the stations.

The company also said it bought 46 A3 laser printers at Sh513,700 each for use at the stations during construction. The Nairobi station received five of these printers. These printers currently cost between Sh40,000 and Sh75,000.

Each of the intermediary stations also got a 30KW generator for use in case of power outage; Mombasa and Nairobi got two. The diesel generators, according to the contracts, were acquired at Sh4.26 million each. When the Nation asked around, we were told we could have one for Sh1.5 million.

Additionally, Kenyans paid Sh5.4 million for each of the 31 boreholes dug by CRBC in the intermediate stations. The Sh5.4 million is for drilling alone minus equipping and commissioning. The entire SGR from Mombasa to Nairobi has seven stations, which means each one was supposed to have three boreholes, a geological impossibility.

CRBC also said it needed to import six ZX7 DC/AC arc-welding machines as each station needed six of these for construction. These, according to CRBC, were bought at Sh442,872 each. We were able to get the same for Sh25,000 from Chinese manufacturers.

Initial plans fail and current suffering

The SGR was initially planned to run from the port of Mombasa in Kenya, through to Kisumu and into Uganda. The looters built it in phases, looting huge chunks of money and going for a new loan for the Nairobi – Naivasha line, which apart from paying in cash, they made sure Chinese officials have a bigger stock of Rhino Horns, elephant tusks, lion tooth and leopard hides by passing it through our National Park.

The sickness in this contract saw a bus that normally costs about Ks5 or Ksh6 million was purchased at 25 million. A van that cost Ksh2.4 million was bought at Ksh12 million. Mark you, the contract, in the first pages states that all imports were tax-free. 

The Chinese staff, who are mostly derived from the scum of society, brought to Africa as punishmesnt lived lke Kings. According to the contract, over Ksh235 million was used for their entertainment. It is true that the chief engineer had at his disposal over Ksh5 million in telephone costs/ airtime.

If the cost of SGR from Mbsa to Nrb is $3.8b, why should the GK allocate $1.48b in a single yr yet the project is fully funded by Exim bank?

— jacob juma (@kabetes) February 18, 2016

Has the reality of the leaked contract been buried under a plethora of PR – Public Relations exercises? It is now curious that the mainstream media is not talking much about SGR’s shortcoming, the public debate ended after Coronavirus came into Kenya. However, before that, the same media stations accepted advertisement by Kenya Railways, the co-owners of SGR the next day after the expose’ on the sh1 billion grass.  One headline the next day read: ‘Kenyans trained to take over SGR operations – official’.

The PR and the denial by the government doesn’t suppress that fact that Kenya borrowed more than Sh450 billion from China to build the 472-kilometer railway from Mombasa to Nairobi and and additional largely unused routes to Naivasha and Suswa.

The PR in the mainstream media is blind to the fact that many SGR workers in 2018 and 2019 came forward to reveal cases of abuse, racism and mistreatment working alongside or rather under Chinese.

In July 2018, a local media house revealed how Kenyan workers were suffering under the Chinese, mostly immigrant workers without documentation.

Another expose by a Kenyan blogger also exposed the issues of mistreatment at SGR. The staff among other things decried long unending trainings. These same trainings are what the SGR and KRC senior managers are using to appease the many unemployed Kenyan youths. It is a scam, that no one should fall for. Kenyans are very intelligent people and humble too.

Despite the many revelations of slavery at SGR, the Kenyan government’s position has always been “there’s a little misunderstanding”. The issues are swept under the carpet and staff deemed to be rogue are fired.

Job losses and environmental degradation

There’s no doubt that the economy of coastal city of Mombasa which depended on road transportation of cargo using tracks has suffered.

In their Environmental Social Impact Assessment (ESIA) study done by Kenyan form Africa Waste and Environment Management Centre (AWEMAC), SGR factors this but scoffs it off. It states: ‘most travelers that use road transport will also find it faster, convenient and safe to travel by train” and that ‘bus companies that operate between Nairobi and Mombasa will have to improve their services in order to compete with high quality train services offered”, it also takes a swipe at truckers saying that the over 50,000 drivers and turn boys might be adversely affected and as such ‘they may have to shift their business interests to the new railway in order to survive’.

The deeply flawed and lackluster AWEMAC ESIA report, some slightly over 200 people decided the fate of 2 million people living along the 385 Kilometre SGR line between Nairobi and Mombasa.  

The study correctly notes that the train will produce exhaust gases which will settle on the vegetation and interfere with the photosynthesis. However, their solution is just to state that “the project will put up measure to ensure that there is reduction in emission of exhaust gases and smoke”.

What measures were put in place? None

Morocco easily built their train network, fully electrified (25kV 50Hz ac electrification), high speed (320km/h) at a cost of $1.5 Billion, compare to Kenya’s dirty diesel locomotive at over $4.8 Billion. It was a rip-off. 

Will Kenya afford to pay?

Kenya loan repayment to China in the current financial year jumped from sh31 billion to sh71.4 billion. The over 130 per cent increase will be shouldered by the Kenyan taxpayer as SGR trains gobbling more than Sh1 billion per month in operational costs is making losses.

The repayments commence after the end of the 5-year grace period, as per the agreements made with Exim bank in May 2014. Kenya has 15 years to repay the SGR loan.

Repayments in the next financial year will increase to KSh84.3 billion, then later KSh111.4 billion in the financial year 2021/2022.

SGR remains a white elephant just like the many other than have left many engineers, govt officials rich, but the country poor.