Jack Ma donations missing, never reached Kenya, MPs told

Health committee told that Kemsa blatantly breached procurement laws and overspent Sh3 billion without any approval.

In Summary
  • Suspended CEO changed his tune, saying he was not pressured by the CS and the PS to award tenders. 
  • It emerged that the CEO turned himself into a procurement man and was busy signing and dishing out tender documents to directly sourced suppliers.
Kemsa factory in Embakasi.
ON THE SPOT: Kemsa factory in Embakasi.
Image: FILE

The alleged procurement irregularities at Kenya Medical Supplies Authority was on hursday laid bare before Parliament in what is likely to indict further the state agency in the ongoing probe.

Details emerged that 27 packages of Covid-19 donations from Chinese billionaire Jack Ma went missing and never reached the country.

In shocking revelations, MPs on Thursday heard that Kemsa blatantly breached procurement laws and overspent Sh3 billion without any approval.

The state agency had a Sh3.6 billion approved budget but ended up spending Sh7.1 billion between March and August, spending that were not authorised by the Kemsa board.

Kemsa board chairman Kembi Gitura told MPs his board was kept in the dark and only learnt of the extra expenditures later in August.

"The board did not authorise the budget passing from Sh4.6 to Sh7 billion. The board did not approve the over-expenditure, the matter did not come to the board until much later in August,” Kembi said.

The lawmakers heard that the medical supplies agency caught in then fast-spreading Covid-19 turned a blind eye not only to the procurement laws but also bought items at exaggerated prices in what the suspended CEO termed as "acting in the best interest of the country".

It also emerged that the CEO turned himself into the procurement man and was busy signing and dishing out tender award documents to directly sourced suppliers, a function that ordinarily rests with the procurement director.

The law requires the director of procurement to sign all letters pertaining to tenders in the agency.

In defending his move, however, suspended CEO Jonah Manjari said he only signed award letters because the procurement boss was sick, a claim that was rejected by suspended director of procurement Charles Juma.

Juma said he was never sick and was only out of the office for one day as opposed to claim made by the CEO.

“Only on one day was I out of the office. The allegations that I was indisposed are not true,” Juma told National Assembly Health Committee probing the rregularities.

Juma also accused Manjari of ignoring his advice, resulting in the agency  spending  in excess of the approved budget to procure coronavirus items.

Juma narrated to the committee that he did a record three advisories to the CEO warning against spending outside the budget and direct procurement, advisories which he said were all trashed by the CEO.

His first memo, he said, was when the agency had spent Sh3.9 billion out of Sh4.6 billion. He then wrote other memos when the spending hit Sh5.3 billion and Sh7 billion.

“We were aware that we were not to surpass the budget of Sh4.6 billion. I raised it when we reached Sh3.9 billion and my advice was that we should stop further commitment but the commitment letters continued,” Juma said.

“In May, I gave a professional opinion that we had adequate items and I indicated that we put on hold any new direct procurement because we had reached Sh5 billion. On June 4, I gave advisory that procurement of Covid supplies had reached Sh7 billion and was advising that we already surpassed the budget.”

But Manjari defended the procurement, saying no money was lost as being claimed in some quarters. He said they were faced with difficult choices to make at a time when the country was threatened by the fast-spreading virus and a number of global suppliers such as China and India had lockdowns.

He said he was forced to make a tough decision as there was a serious health threat to health workers who were the frontline soldiers in battling the respiratory disease.

“It is for the passion that I have for this health industry and healthcare workers, I really needed to protect them and not have a situation witnessed in other countries,” he told the lawmakers.

“At the time of the pandemic, Kemsa had already passed the 2019-20 budget and by March 2020 when the pandemic was declared, there no budget at Kemsa for Covid so we rode on the assumption that being a pandemic we would be able to get funds from emergency, donors, the Ministry of Health and reserve at Kemsa.”

The committee chaired by Murang’a Woman Representative Sabina Chege was meeting the suspended officials to establish their roles in the procurement.

Manjari was suspended last month following allegations that the authority violated procurement regulations. Also suspended were  Juma (head of procurement) and Eliud Mureithi (commercial director).

In a surprising change of tune, Manjari said he was not pressured during Kemsa procurement, exonerating Health CS Mutahi Kagwe and PS Susan Mochache. He had earlier accused the CS and his PS of exerting undue pressure on him.

"We were not instructed to procure those items from those suppliers as has been alluded to earlier," he told the National Assembly Health Committee on Thursday.

"As CEO, I did not work under any pressure; I did these with my eyes open."

Earlier, Transport Chief Administrative Secretary Chris Obure and clearance agency boss Felix Aten told the House team that some donations critical to the fight against Covid-19 from Jack Ma did not reach the country. He added that his office was not aware of the specific content of the donations.

The CAS said the ministry realised that the 21 packages were missing after verifying with the packing documents from China.

“We realised that 21 packages were short delivered, I assure you we will continue to pursue the matter with the Ministry of Health to ensure they are delivered,” Obure said.

“Personally, I did speak to top officials of the Ministry of Health and they confirmed to me that they are pursuing the matter."

Aten said, “We took the matter up with the ministry and they promised to follow up. I guess they are in the process of doing the same.”

(Edited by F. Orieny)

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