Erad director tells House team of plan to auction NCPB assets over Sh267m

Erad director Jacob Juma (centre) listens to a question from a member of the Public Investments Committee at Parliament Buildings on Tuesday. Photo/Emma Nzioka 

By EDWIN MUTAI

In Summary

• The order puts at risk Kenya’s food security as NCPB is a strategic food reserve that holds 2.2 million bags of maize valued at Sh6.6 billion.

A businessman Tuesday told a House committee investigating the National Cereals and Produce Board (NCPB) scandal in Nairobi that he had secured a court order to dispose of the board’s assets over a Sh267 million debt.

The order puts at risk Kenya’s food security as NCPB is a strategic food reserve that holds 2.2 million bags of maize valued at Sh6.6 billion.

“We are now set to enforce a court decree to dispose of NCPB’s assets arising from the breach of a maize supply contract,” Jacob Juma, a director of Erad Supplies and General Contractors Ltd, told the Public Investments Committee (PIC).

The committee is investigating how Erad obtained court orders to sell NCPB’s assets to recover a total of Sh564 million yet it did not supply a single grain of maize.

Read: State says it won’t bail out NCPB in Sh550m row

Other directors of Erad are Sirisia MP John Waluke and Grace Sarapay Wakhungu, former vice president Moody Awori’s sister.

Mr Juma said that he had so far attached NCPB’s assets worth Sh297 million, sold two vehicles and was holding five others.

The court order is meant to recover the Sh267 million balance of Erad’s Sh564 million claim.

NCPB entered into a maize supply contract with five companies to import 180,000 tonnes of maize to meet the country’s food needs during the 2004 famine.

Erad, one of the firms, however failed to deliver the maize, which it claimed it would have been imported from Ethiopia, leading to termination of the contract.

The firm moved to an arbitrator and was awarded Sh564 million for breach of the contract, but NCPB contested the decision at the High Court.

Mr Juma said the matter had been heard by nine judges who threw out NCPB’s case and upheld its claim for storage charges and loss of revenue anticipated from the maize supply.

Questioned morality

Committee members questioned the morality of attaching property of a key food security institution when no grain had been supplied.

“To me it is morally right, but to Kenyans it is not. This must serve as a lesson to public officers who cancel contracts at will,” Mr Juma said, asking the MPs to change the law so that money lost through breech of contract is surcharged on culpable officers.