Haji mulls charging firms in Sh7.8bn Kemsa Covid scandal

The Director of Public Prosecutions is considering charging Kemsa bosses in relation to the Sh7.8 billion Covid-19 procurement scandal.

A source at the ODPP told the Star yesterday: "This is an ongoing investigation and it will take some time for all the aspects to be covered. EACC has presented to us some files for the staff of Kemsa, which we are considering.

"EACC still has other case files including those companies involved. We sent back some of those files last year because there was no evidence of wrong doing."

The Ethics and Anti-Corruption Commission has recommended prosecution of directors of several companies implicated in the scandal at the Kenay Medical Supplies Agency.

In its quarterly report published in the Kenya Gazette of March 26, the EACC says on November 19, 2020 a report was compiled and forwarded to the DPP recommending the prosecution of officials of several firms awarded multibillion-shilling state contracts for supply of Covid-19 emergency equipment.

The commission has recommended that the entities be prosecuted for flouting procurement rules in the Kenya Medical Supplies Authority purchases.

On the radar are directors of Accenture Kenya, Gadlab Supplies and Meraky Healthcare.

The agency also wants the directors of Steplabs Technical Services, Wallabis Ventures, Shop n Buy and Kilig Limited charged.

EACC is also pursuing the prosecution of suspended Kemsa CEO Jonah Manjari, director of procurement Charles Juma, director of commercial services Eliud Muriithi, director of finance and strategy Waiganjo Karanja and the quality assurance manager.

The registration forms of Accenture Kenya list Newton Munene Njiru and Ben Mundia Munene as the firm’s directors.

Naomi Wairimu Njuki and James Mbogo Wanja are listed as the directors of Meraky while Catherine Wanjiku and James Njenga Ndung’u are directors of Wallabis.

Kilig Ltd has Ivy Minyow Onyango as the sole director. James Cheluley is the sole director of Shop n Buy. Gadlab is owned by Gladys Muthoni Thumbi and Dancun Kibiru.

The companies, their directors and Kemsa officials face charges related to the procurement and payments for the supplies.

They could be charged with giving and receiving a bribe, willful failure to comply with the law relating to procurement and unlawful acquisition of public property.

The officials could also be charged with abuse of office, conspiracy to commit an economic crime, entering into obligation with financial implication on the budget without authority, and neglect of official duty by a public officer.

The firms were identified in the first phase of the investigations, with files of dozens of others queued at different stages of the probe.

EACC first submitted the file to the DPP on September 11 last year, recommending the prosecution of the suspended Kemsa managers and the CEO’s personal assistant.

On October 2, the DPP returned the file for further investigations after which EACC resubmitted the same on October 22.

The DPP sought further adjustments, which the EACC resubmitted on November 19 with the fresh recommendations.

EACC chief executive officer Twalib Mbarak earlier said the Kemsa probe is complex and involves a number of companies.

The agency began the investigations following a complaint that Kemsa had not followed the relevant procurement laws.

The anti-graft commission said the probe revealed that the tendering process was commenced by the suppliers who submitted letters of intent to supply to Kemsa.

Kemsa, in return, issued them with commitment letters irregularly.

The supplies authority was approached by the firms which sought to supply the items. No advertisements were placed to invite the bids.

Contracts were to be signed after the firms delivered the items. The suppliers were asked to write letters of intent showing their prices.

Kemsa would then issue the entities with letters of commitment after negotiations, without due regard to their financial capacity.

“Investigations further established Kemsa did not engage any of the prequalified service providers for the delivery of the Covid-19 materials,” the EACC said.

Kemsa, instead, opted for the companies that approached it, most of which, investigations revealed, lacked the requisite financial capacity.

“Further investigations established that the items were procured way above the market price,” EACC said.

The commission added that it established the items were not inspected for value for money in terms of quality and quantity on delivery.

Accounts by the directors, in a separate probe by the National Assembly’s Public Investment Committee, laid bare the rot that was the Kemsa supplies.

Most companies, of the 102 that traded with the state agency in that period, have made comments in open forums how they violated various laws.

Some directors told the PIC chaired by Mvita MP Abdulswamad Nassir how they walked in and, without much ado, landed tenders worth hundreds of millions of shillings.

Suspended procurement boss Charles Juma last Wednesday said no due diligence was carried out on the firms, some of which were dealing in grains, cosmetics and furniture.

Kilig Ltd – which Jubilee vice chairman David Murathe has denied links to - for instance nearly bagged a Sh4 billion tender yet it is inexperienced in medical supplies.

This was before the EACC stepped in and directed the cancellation of all pending commitments to pave way for the probe.

Meraky was awarded a Sh140 million tender in a process that took barely 24 hours and was paid in less than 30 days.

Shop n Buy won a Sh1 billion tender within two months of its registration to supply 100,000 PPE and 100,000 (50-pack) KN95 face masks.

Wallabis Ventures, linked to a senior health officer, landed a Sh75 million tender for 10,000 PPE whereas Accenture Ltd supplied 12,000 kits.

Kemsa is facing a possible loss of Sh3 billion following the irregularities as stocks remain unused – to be sold at throwaway prices.

The PIC probe revealed uniformity in the illegalities by the companies during the purported emergency purchases, which MPs have since dismissed.

PIC was due to retreat to write its report detailing the accounts of the directors of the over 100 companies but was slowed down by the second lockdown.

Separately, fresh details of corruption scandals under probe by the EACC reveal that the commission seeks the probe of various county officials.

The Director of Public Prosecutions Noordin Haji on March 4 ordered further investigations into the irregular purchase of 32-acre land for construction of Bungoma governor’s official residence.

EACC holds that the tender was awarded to New Nyanza Wholesalers at an inflated price of Sh163. 2 million without engaging a government valuer.

It had recommended charges against Bungoma chief officer of Lands, head of supply chain management and members of the county render committee.

Haji also ordered a further probe into the irregular award of tender for partitioning of Council of Legal Education office space at Karen at Sh14 million.

Preliminary investigations established the tender was procured irregularly and based on forged minutes and bid documents.

Money trails revealed rampant transfers from the director of Howard Construction Company to officers involved in the procurement.

Haji has also approved the prosecution of Turkana county officials in the irregular procurement of a fire engine, which was never delivered yet Sh20 million was paid.

EACC is also tightening the case against Kenyatta University officials accused of conspiring to defraud the university of Sh288,000.

The anti-graft agency had established that Sh223,000 was wired to the officer in charge of central food stores after the invoice was paid. No items were supplied.

The DPP also returned for further investigations the case against officials of Nakuru Water Company in the irregular award of a tender for security services.