Kenyan officials free as Israeli firm found guilty, fined Sh9bn

Company was found guilty of bribing Kenyan officials to secure lucrative construction contracts.

In Summary
  • In 2010, the government controversially awarded the company a Sh14 billion tender for the construction of Mau Summit-Kericho-Kisumu highway.
  • In Kenya, it took more than 12 years for the court to indict some of the the officials of the commission over the scandal.
Benjamin Netanyahu whose government has found Shikun & Binui guilty
Benjamin Netanyahu whose government has found Shikun & Binui guilty
Image: FILE

Kenya is grappling with a fallout from a major bribery scandal after an Israeli construction firm was fined Sh9.1 billion.

The company was found guilty of paying bribes to Kenyan officials to secure lucrative construction contracts.

While Shikun & Binui faces financial repercussions, a critical question remains unanswered: will the Kenyan officials implicated in the scheme be held accountable?

This is not Kenya's first brush with international bribery allegations. In 2014, a similar scandal involving a British printing firm bribing Kenyan election and examination officials rocked the nation.

These repeated incidents paint a worrying picture of corruption deep in the heart of Kenyan public institutions.

The spotlight now falls on Kenya's Ethics and Anti-Corruption Commission. Although the EACC claims to be aware of the Shikun & Binui case and even sent a representative to Israel, the public awaits confirmation of a full-scale investigation into the Kenyan officials involved.

On Tuesday, the Star could not verify whether EACC was still investigating the matter.

CEO Twalib Mbarak however said they knew the case. “We are aware of the case, we even sent one of our officers to Israel to testify," he told the Star.

But he did not disclose whether the agency was investigating the case.

Instead, he referred us to the commission’s spokesperson Eric Ngumbi for more details.

“EACC is aware of this matter and is analysing the allegations to verify the same,” Ngumbi said.

Shikun & Binui, Israel’s largest infrastructure and real estate company, and its executives were found guilty but spared jail in a historic plea bargain that will see the giant multinational pay Sh9.1 billion in fines.

According to the investigations conducted by the Israel Police Authority, the firm’s senior officials bribed Kenyan officials between 2008 and 2017 to win lucrative road tenders.

The revelations place in the spotlight ministers and principal secretaries who were in office during the period.

The firm worked in Kenya through its subsidiary Soleh Boneh International Holdings.

In 2010, the government controversially awarded the company a Sh14 billion tender for the construction of Mau Summit-Kericho-Kisumu highway.

In 2018, the Israeli authorities started investigating the firm following the suspicious payments to public servants in Kenya and other African countries.

The payments were made using separate accounts.

Further, the company failed to disclose the payments in its financial report, contrary to Israeli laws, pointing to possible bribery that triggered the probe.

This followed the amendment of the Israeli criminal law in 2008, which established the offence of bribing foreign public servants to promote business activities.

However, the company’s top managers have been spared jail terms after the company entered into a plea bargain agreement with the country’s taxation and economic prosecutor’s office to pay the state the fine.

Ahead of the investigations, Israeli authorities froze many assets worth billions of shillings belonging to the firm.

In exchange for the release of the assets, Shikun & Binui deposited a sum of NIS250 million ($67.5 million or Sh8.67 billion) in the confiscation fund of the general custodian.

The amount increased due to differences in returns over time to NIS277 million ($74.79 million or Sh9.61 billion).

As part of the settlement, it was determined that NIS260 million (Sh9.02 billion) will be forfeited from this amount, which includes an additional fine of NIS10 million (Sh346.95 million) on the subsidiary SBI Infrastructure.

A sum of approximately NIS17 million (Sh589.81 million), the difference in returns, will be returned so that a total of NIS260 million (Sh9.02 billion) will be paid in the case.

The case is set to be closed.

“I’m glad that this old affair that has continued for years has ended with the closing of the case against the company. We now look to the future with our full energy,” Shikun & Binui chairperson Naty Saidoff is quoted as saying in local dailies in Israel.

The investigation was concluded five years ago, but the decision to jail the convicts was delayed as the firm sought an out-of-court settlement.

In 2021, it was decided that the case be closed in exchange for the payment.

In 2019, the commission reported questioning several state officers, both serving at the time and previously, who were allegedly involved in the corrupt scheme.

The officers allegedly received bribes to award the Sh14 billion tender for the construction of the Mau Summit-Kericho-Kisumu highway to Shikhun & Binui.

The latest case mirrors the infamous ‘Chickengate’ scandal where a UK court indicted managers of a printing firm that bribed Kenya’s election officials millions of shillings to win the multibillion-shilling tender.

In Kenya, it took more than 12 years for the court to indict some of the the officials of the commission over the scandal.

However, the Kenyan court allowed then IEBC CEO James Oswago and deputy commission secretary Wilson Shollei Sh7.5 billion each in exchange for a four-year jail term for their involvement in the scandal.

In the UK case, the court convicted managers of Smith & Ouzman, a UK-based company specialising in printing security documents, for bribing officials of the electoral agency.

The senior officers, including the then CEO Oswego, allegedly received about Sh50 million in bribes between 2008 and 2010.

This was done by inflating most of the printing contracts by up to 38 per cent.

The firm printed materials that were used in the 2010 referendum that ushered in the new constitution and subsequent elections.

The underhand cash deals even had a code name in the emails exchanged between the printer and election officials.

‘Chicken’ was the word that would facilitate Smith & Ouzman winning seven tenders to supply election materials such as ballot papers, voter registration forms, voter ID cards, and nomination forms.

The revelations followed a four-year-long forensic investigation by the UK’s Serious Fraud Office, which investigates and prosecutes serious and complex fraud cases, including bribery and corruption.

Kenyans are yearning for a more decisive action against corruption, particularly at the highest levels, if the recent issues raised by Gen Z are anything to go by.

President William Ruto faces pressure to demonstrate his administration's commitment to eradicate graft.

The public demands thorough investigations, with the expectation that any individual found guilty, regardless of their position or political ties, will face legal consequences.

Kenya's reputation as a nation susceptible to corruption continues to overshadow its accomplishments and potential.

This recent scandal serves as a stark reminder that complacency is a luxury Kenya cannot afford.

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