Senior Kenya Pipeline Company managers have been trying to
cover-up a scandal in which an insider used briefcase companies to
siphon billions of shillings from the parastatal's coffers.
The
massive fraud, first unearthed 16 months ago, is estimated to have cost
KPC Sh2 billion. It was orchestrated by three relatives using seven
different companies, some of which were registered using forged
documents.
How much the senior
management knew about this fraud is still not clear, but detectives
believe there is now “overwhelming evidence” to charge the three
relatives and a lawyer.
Before
detectives tightened the noose around the three, KPC had bought
newspaper space to defend the tenders, while the suspects filed libel
cases after the Nation exposed the scandal in March 2017.
The
cast includes a Kenya Pipeline welder, identified as Mr Francis Amina
Juma, his nephew, Mr John Huba Waka, and Mr Waka’s wife, Ms Beryl Aluoch
Khasinah, an employee of the National Hospital Insurance Fund (NHIF).
They are now part of an ongoing investigation into funds allegedly
channelled by KPC to their phantom companies as payments for supplies.
INTERNATIONAL TENDER
Initial investigations by the Sunday Nation had centred
on how Aero Dispenser Valves Limited managed to bag a Sh600 million
international tender to supply aircraft refuelling equipment for
Nairobi’s Jomo Kenyatta International Airport. When it won the tender,
Aero was only a 20-month-old company based in a single room in Gill
House, Nairobi.
Now, detectives have finally zeroed in on the three relatives and a comprehensive report seen by the Nation reveals the inside workings of this and other dubious companies.
The
report, signed by the Director of Criminal Investigations, Mr George
Kinoti, and sent to the Director of Public Prosecutions, Mr Noordin
Haji, asks him to review the new bundle of evidence which includes bank
statements “with a view to charging the suspects”.
However,
according to the documents, Ms Khasinah has told detectives that she
does not know what the companies do although she remains a director and
signatory. According to her, all the procurement that happens is done by
her husband, who tenders, procures and delivers the supplies to the
Kenya Pipeline Corporation.
TENDERING ENGAGEMENTS
She
also told detectives that it was her husband’s uncle – Mr Francis Juma –
who incorporated her name into some of the companies “without her
knowledge” and that he is the one who “assists” her husband, Mr Waka, in
all tendering engagements.
Mr Waka
told detectives that he was the one who registered the seven companies.
However, he could not trace one of the directors, Ms Ruth Auma.
Detectives believe that Ms Ruth Auma is a fictitious name.
Although
Mr Waka deals with hundreds of millions, his companies do not have a
formal staff management structure. And when asked about it, the DCI
report says, “the two could not explain themselves well". They claimed
that they did not have documents and that they were only agents for
certain companies in the diaspora.
During
the investigations, Mr Waka is alleged to have written to the
Independent Policing Oversight Authority (IPOA), claiming that the
investigating officer had obtained Sh24,000 from him and threatened to
kill him together with his lawyer, only identified as Mr Nyandieka.
“Following
those false allegations, the investigating officer was summoned by the
Internal Affairs Unit (IAU) and, upon explaining his part, he was
cleared to go back and proceed with the investigations,” says the
detailed report.
CARTELS
This
explains why, in the report, Mr Kinoti has accused unnamed cartels of
“trying to subdue the truth from being revealed through investigations".
He says the cartels were out to malign the name of the investigating
officer and thwart the investigations "by all means possible”.
Investigations
into one of the related companies, which was awarded a Sh47 million
tender to supply mechanical seals, found that the entered LR number
209/8838 and whose directors are the non-existent Ruth Auma, Mr Waka and
his wife, was a forgery and does not belong to Gill House, where the
company purported to have an office. More so, detectives say, the
company has never been a tenant at Gill House.
While Kenya Pipeline had in its adverts maintained that Aero Dispenser Valves
company was owned by Jackson Odero, Michael Opudo and Willbard Otieno,
the detectives say that the company is owned by Beryl Khasinah and
Francis Obure. More so, the company has never filed its returns since
November 2014 despite receiving contracts worth Sh647 million.
In
its registration papers, the company – which has never done any other
business with other entities apart from KPC – had initially claimed it
was a tenant at Utalii House on Uhuru Highway, but the detectives traced
its office to a shabby room on the second floor of Gill House.
OFFICE SPACE
This
office was rented by a Mr Caleb Mukuna, who told the detectives that he
had been approached by Mr Francis Juma and Mr John Waka to make an
application for office space. In the tenancy documents, he is “purported
as a technical director” although he was a caretaker and operates a
secretarial service on the side.
Detectives
found that “no activity has even been seen … in the said office”
although the rent was paid by Mr Waka. Mr Mukuna had temporarily leased
the idle space to a tailor.
“The
transfer of the company from the former directors to the current ones
was all a forgery to conceal the identity of the real directors and
activities of the company,” said the DCI report.
It
is also claimed that the resignation letters and affidavits of “the
three old men” Mr Opudo, Mr Wilbird Otieno and Philemon Odero, tendered
to the registrar of companies, were forgeries.
The
detectives want a lawyer, Mr Nyandieka, to be charged for that.
However, according to the detectives, Mr Nyandieka “has confirmed” that
the affidavits were a forgery and is on record as saying that he had no
knowledge of them.
CORRUPTION
Interestingly,
Mrs Khasinah says in her statement that Mr Nyandieka is the family
lawyer. He was introduced to them in 2008 by Mr Juma. However, Mr
Nyandieka says in his statement that he came to know the family in 2015
when he represented them in a corruption case.
Another
company, Thermo Dynamic General Supplies, which was paid Sh400 million
to supply composite sleeves, was also a briefcase entity and has never
had an office at Uchumi House as purported in its official papers. The
LR209/8948 “does not appear anywhere in the records of the land
registrar” while the post box address given belongs to another person.
Another
of Mr Waka’s companies had a non-existent office at Anniversary Towers
in Nairobi. Known as Trans African Pipeline, the company’s two other
directors were fictitious or had their names forged.
While
purported director Sam Awiti was never traced, Jordan Abeka was traced
but denied knowledge of being a director. Also, the LR 209/1/92 where
the office is located is non-existent.
Mr
Waka was also running another briefcase company known as Continental
Pipeline Engineering, which he alleged to be based on LR 209/1/92 View
Park Towers.
Again the LR number is
non-existent. Detectives have found that the change of the company’s
name from Trans African Pipeline was based on a forged resolution.
RESOLUTION DOCUMENT
A
law firm, Ochanda and Onguru, has disowned the company resolution
document. The same company resolution document was purported to have
been commissioned by Mr Ngaah Jairus, now Judge of the High Court. Mr
Ngaah was traced and he disowned the commissioning, signing and stamping
the document.
Another briefcase
company known as Boiler and Petroleum Piping Systems claimed to have an
office on Kenyatta Avenue on LR 209/4631 but this plot number is
non-existent.
Another Nairobi law
firm has denied that it prepared the Memorandum and Articles of
Association used to register the company in 2002 with Mr Waka as a
director.
The other directors are Mr
Fredrick Waka and Mr Ezekiel Wambaya. The company is said to have won a
Sh270 million tender to supply gaskets to KPC.
The
detectives also claim that a company owned by Mr Juma and his wife
Joyce Atieno won a Sh637 million tender to supply mechanical rings and
rubber seals.
FORGERIES
While
the company, Nairobi General Supplies Limited, was said to have been
registered by Ndichu and Mutua Advocates, the Law Society of Kenya has
told detectives they do not have such a law firm in their records. The
registrar of companies has also dismissed the company documents as
forgeries.
All the law firms that
were alleged to have commissioned registration documents of the seven
companies have dismissed the signatures and stamps as forgeries while
all the other directors – apart from Mr Waka and his wife – have denied
knowledge of having shareholding in the entities.
Detectives
have been following the trail of money from the National Bank of Kenya
and wanted to know why due diligence was never done on the said
companies.
Also, the failure by the
banking officials to cooperate during the investigation has thrown some
of them into the centre of the scandal.
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