Ex-EACC official dragged into Sh347m Kemsa scandal probe

A former official has been dragged into the multibillion shilling scandal at the Kenya Medical Supplies Authority (Kemsa).

A witness dropped the official's name while appearing before the Public Investments Committee probing the controversial Sh7.8 billion Covid-19 supplies.

Director of Aszure Commercial Services Zubeda Nyamlendo told MPs on Wednesday that the official signed as the firms’ surety for a loan she sought from First Community Bank.

MPs want answers on how the company got the Sh347 million tender for the supply of face masks yet it is not registered as a supplier of hospital consumables.

Zubeda said her firm was prequalified by Kemsa as a supplier of office furniture, fittings, and other assorted equipment.

In what could reveal the intricate web of companies that reaped from the Kemsa windfall, a Chinese company trading as Zucheng Cheng Cheng assisted Aszure with the importation of the KN95 masks.

Zubeda said the former EACC boss helped her unlock funding for her LPO - which First Community Bank gave her the first loan of Sh176 million and later Sh171 million after Kemsa paid for the first LPO within three weeks.

PIC is investigating dozens of firms implicated in a special audit on the procurement of Covid-19 items at Kemsa where billions are suspected to have been stolen or misappropriated.

Zubeda said that the former EACC official, was incorporated as a signatory to the company’s accounts after she could not secure a loan.

“The bank needed security to give us a huge amount of money we requested. He gave us the assurance and we included him as a director,” she said.

“The bank needed security or assurance. He came on board as a surety and I wrote a letter introducing him as a signatory. The letter was to provide for three people to sign the loan,” Zubeda said.

The witness was hard-pressed to come clear on whom the true owners of the firm were after the mention of two other shareholders Stanley Kithia and Dorothy Omogi.

Earlier, Zubeda said they were only two shareholders in the company, the other being Phanice Adhigo but MPs said they were dissatisfied with the explanation.

She said the company was founded in 2017 with four shareholders—Phanice, Stanley, Dorothy, and herself—before the two (Stanley and Dorothy) left.

Zubeda told the Mvita MP Abdulswamad Nassir-led committee that the former EACC official came in after the company was unable to finance the local purchase order granted to her by Kemsa.

“We used the documentation to go around. I went to a few people to lend us the money but failed and that is how he came in,” she said.

But MPs cast doubt on her explanation saying from their background check, the lady was acting at the behest of some bigwigs in the government.

MPs wondered how the company, without sweat, was issued a letter of commitment without a bid, granted an extension after failing to deliver within the contract timelines, and was swiftly paid for facemasks.

They also raised concern with the speed at which Kemsa officials checked and approved the samples of face masks presented by the company within hours.

Some lawmakers told the Star in confidence that the company’s contacts were traced to one of the high offices in the country.

Zubeda could not explain how the company, said to be incorporated in 2017, could raise the millions for the supplies.

The witness sparked suspicion after she told MPs that she couldn’t remember what she wrote to Kemsa requesting more time to raise the assigned stocks.

Nassir directed that the official be summoned to appear before the committee to answer the queries.

PIC member and Kaloleni MP Paul Katana said the company may have been used by influential people in the government to secure the tender.

“You can’t walk to an office and simply get a commitment letter to supply Sh347 million worth of goods without any previous supplies,” the MP said.

Nassir said the witness was “either brave or extremely naïve” and wondered if she took legal advice before appearing before the committee.

“The shares transfer was done just before Kemsa issued the commitment letter. It appears the witness was given a script and thought the committee was not going to do its research,” he said.

Zubeda revealed that she obtained the sample from a local supplier after walking to the Kemsa premises to inquire about the tender.

She explained how she sought the award to supply KN95 face masks at the procurement office which issued her with a commitment letter four days later.

MPs called her out for claiming that she had learned of the supply needs from a televised address by the Ministry of Health.

Zubeda said Kemsa procurement boss Charles Juma only asked her if she could bring a sample and got her letter four days after on April 17, 2020.

Juma once told the Nassir-led committee of death threats had he refused to sign the controversial commitment letters.

It was revealed before the committee that the approval of samples was done verbally.

Among issues MPs want investigated is how the firm secured such a huge contract with no letter, no-bid, or formal inquiry save for the walk-in.

“How did they know the price without a quotation or letter of offer?” Nassir asked.        

Zubeda said she was the one who informed Kemsa of the prices and that she had the capacity to supply.

“I told them I could do 50,000 boxes in packs of 10 at Sh690 a piece. We then got a commitment letter four days later and was asked to supply,” she said.

On Tuesday, a witness told PIC how she passed by Kemsa offices and landed a Sh124 million tender. Another supplier also got Sh180 million tender under similar circumstances.

Edited by Sarah Kanyara