Corporate News
Former Kenya Bureau of Standards managing director Kioko Mang’eli. PHOTO | FILE
By BRIAN WASUNA, bwasuna@ke.nationmedia.com
In Summary
- Geo Chem Middle East Limited withdraws Sh296m suit after Dubai-based Geo Chem denies any links.
A company linked to former Kenya Bureau of Standards
(Kebs) boss Kioko Mang’eli has withdrawn a Sh296 million court claim
filed against the State agency after allegations emerged that it is a
shell company being used to fraudulently acquire the funds.
Geo Chem Middle East Limited has withdrawn the suit barely
two months after a Dubai firm with a similar name claimed the Nairobi
company is a shell corporation formed by Dr Mang’eli to defraud it of
the colossal sum.
The firm has, however, not given reasons for withdrawing the suit.
The Nairobi-registered Geo Chem had sued Kebs and
the Kenya Revenue Authority (KRA) claiming it is a local subsidiary of
the genuine Dubai company. It held that the amount was owed out of a
petroleum products inspection contract with Kebs.
Dubai’s Geo Chem appeared in court in July and told
Justice David Onyancha that it did not have a Kenyan subsidiary and
that it had not instructed any lawyer to file a claim in court.
“Take notice that Geo Chem Middle East Limited wholly withdraws the suit against Kebs and KRA,” the court filing reads.
The move comes after Justice Onyancha ordered that
officials and lawyers of the Nairobi-registered Geo Chem appear in court
to answer to the accusations.
Dr Mang’eli was Kebs managing director when Dubai’s
Geo Chem was awarded the tender in 2009 but the government called off
the deal seven months arguing that procurement had been flouted.
Dr Mang’eli left Kebs on September 22, 2009 after a
month-long standoff with then Head of Public Service Francis Muthaura.
He had refused to leave office following a confidential letter sent to
then Industrialisation PS John Lonyangapuo.
His dismissal followed claims of mismanagement and
alleged graft. A report by the Inspectorate of State Corporations to the
Ministry of Industrialisation accused Dr Mang’eli of falsifying
information to justify a salary increment.
The Sh296 million arose from unpaid invoices for
product inspection that Geo Chem Dubai says it conducted. It says Dr
Mang’eli used his knowledge of its ownership structure to register a
shell corporation with a similar name and hoodwink the court into
awarding it the sum.
A harshly worded letter sent by a director of the
UAE firm — Pradeep Gopal — to Dr Mang’eli on August 2 has been attached
as evidence in the suit. Mr Gopal in the letter demanded that Dr
Mang’eli withdraw the suit before Mr Justice Onyancha and issue a public
apology.
“Do take steps to immediately remove that case at
the High Court at your personal expense. In addition, you must apologise
for your unashamed act of trying to steal money from the Kenyan
Treasury. Do keep away from our affairs completely and desist from
making telephone calls to us,” the letter reads.
The former Kebs boss is yet to respond to the
allegations. The case was meant to come up before Mr Justice Onyancha on
October 15
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