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Audit Report

Ruaraka land ghost return to haunt top officials

Auditor general Edward Ouko reveals massive irregularities in the payment of sh1.5 billion for the twin parcels of lands in Ruaraka

In Summary

• Audit report for the 2017-2018 reveals the payments made were not procedural. 

•National Assembly Public Accounts Committee chair says no one will be spared.

Former National Lands Commission chairman Mohamed Swazuri with deputy Abigael Mukolwe when they appeared before the parliamentary lands committee on the Ruaraka lands dispute.
Former National Lands Commission chairman Mohamed Swazuri with deputy Abigael Mukolwe when they appeared before the parliamentary lands committee on the Ruaraka lands dispute.
Image: JACK OWUOR

The ghosts of the Ruaraka land saga have refused to disappear and have resurfaced to haunt top state officials in an audit that unmasks massive irregularities in the Sh3.3 billion land purchase.

The report by Auditor General Edward Ouko has also unearthed anomalies in other multi-million land compensation payouts that could trigger fresh investigations at the National Land Commission.

The audit report on the NLC 2017-08 financial statements comes days after ex-NLC chairman Muhammad Swazuri, commissioner Emma Njogu and more than a dozen other officials were charged over corruption.

 

In the report, Ouko says he cannot confirm whether the Sh1.5 billion that had been wired to controversial businessman Francis Mburu for the Ruaraka compensation was procedural.

Further, justification for the 15 per cent disturbance allowance was not clear given that the claimant had not developed the land in question.
Audit report

Further, Ouko questions how Mburu was paid public funds yet the 13.7 acre parcel had been used as collateral that enabled him to take two separate loans amounting to Sh185 million.

In stark revelations, Ouko says the Sh3.3 billion could have been inflated to cater for what NLC said was a 15 per cent disturbance allowance.

A disturbance allowance is paid when the State acquires land on parcels with existing structures and requires owners to move out.

There has been controversy over the ownership of the land. The Senate Public Accounts Committee concluded that the State was duped to pay for its own land.

The explosive report, which caused a storm in Parliament, endorsed a probe against Swazuri, Mburu, Interior Cabinet Secretary Fred Matiangi and Education PS Belio Kipsang for their roles in the Ruaraka land saga.

The report was later shot down in the House after senators failed to garner the requisite numbers to adopt it.

The acquisition of the 13.7-acre parcel for two public schools,  Ruaraka High and Drive Inn primary, was executed during Matiang’i's tenure as Education CS and Belio as his Principal Secretary.

In what could reignite vicious political fireworks in Parliament in the coming days, National Assembly Public Accounts Committee Chairman Opiyo Wandayi yesterday warned that his watchdog panel will leave no stone unturned.

“The PAC is going to exercise its constitutional mandate and examine the matter with the usual diligence and bring it to its logical conclusion. The public must rest assured that PAC will spare no efforts to get to the bottom of the matter,” the Ugunja MP pledged.

Persons of Interest
Persons of Interest
Image: LUCY SWAN

The acquisition of the 13.7-acre parcel for two public schools,  Ruaraka High and Drive Inn primary, was executed during Matiang’i's tenure as Education CS and Belio as his Principal Secretary.

In what could reignite vicious political fireworks in Parliament in the coming days, National Assembly Public Accounts Committee Chairman Opiyo Wandayi yesterday warned that his watchdog panel will leave no stone unturned.

“The PAC is going to exercise its constitutional mandate and examine the matter with the usual diligence and bring it to its logical conclusion. The public must rest assured that PAC will spare no efforts to get to the bottom of the matter,” the Ugunja MP pledged.

Wandayi said his committee is now fully seized of the Ruaraka land matter, signalling that they could begin grilling the top figures involved.

Matiangi, largely known in government circles as the 'Super Minister', is a close confidant of President Uhuru Kenyatta and his public grilling is likely to generate political heat.

Matiangi and Deputy President William Ruto are said not to be in accord and the DP's allies have been baying for his blood in recent days.

“We will soon even expose the details on the Ruaraka land scandal because they think we don’t know what is happening,” threatened Kapsaret MP Oscar Sudi, a key ally of the DP. He spoke after the withdrawal of security to select Ruto lieutenants.

Matiang'i chairs the powerful National Development Implementation and Communication Cabinet Committee, which is largely seen to elbow Ruto’s out of the way and diminish his role in government.

However, the probe will be a double-edged sword for Ruto’s allies, since their man Belio is also adversely mentioned.

In the audit, Ouko has given the NLC an adverse opinion, meaning that its financial statements are misrepresented, misstated and do not accurately reflect its financial performance.

The verdict by PAC will supersede all previous recommendations by any other committee of the two houses of Parliament
Ugunja MP Opiyo Wandayi

“Based on the audit procedures performed, [we can] confirm that public resources have not been applied lawfully and in an effective way,” the audit concludes.

For instance, Ouko has flagged  Sh360 million land compensation for plot no MN/V1/4806 in Mombasa.

The auditor says the money was wired into a lawyer's account on behalf of the client for alleged interruption and loss of business.

However, Ouko says no valuation report was availed for audit verification.

Also under scrutiny is  Sh82.4 million paid for the acquisition of 50 acres for a sanitary landfill in Muranga county without a signed valuation report other than “a handwritten draft”.

Ouko also points out that the NLC failed to convince his office of its justification for the 15 per cent included as disturbance allowance.

“In the circumstances, the validity of the expenditure totalling to Sh82.4 million for the year ended 30 June could not be confirmed,” he stated.

Also being questioned is Sh38.3 million paid out to a supermarket owner along Thika Road.


The auditors found that while the lease agreement between the supermarket and the landowner was entered into in 2009, the outlet's certificate of incorporation shows that it was registered in 2015.

This implies that by 2009, the supermarket that has been paid millions was non-existent.

NLC is also under scrutiny for paying Sh224.8 million to a firm known as Regional Container Freight Limited domiciled in Mombasa for the acquisition of three parcels.

However, Ouko says the valuation reports were not availed for audit.

It remains unclear how NLC arrived at the cost of the three parcels.

Swazuri and some of the secretariat staff are now facing two separate criminal prosecutions.

Last August, Swazuri, former NLC chief executive officer Tom Chavangi and ex-Kenya Railways Boss Atanas Maina were arrested over dubious standard gauge railway compensations.

Last week, the Ethics and Anti Corruption Commission detectives arrested Swazuri and 23 other former commission officials over alleged corruption.

Their arrests are linked to fraudulent compensation for land acquired by the commission for the construction of the Mombasa Southern Bypass and Kipevu New Highway Container Terminal link road in 2013.