Curtain falls on another year of mega graft, financial scandals

Despite 2019 being dominated by economic distress and rising public debt, financial scandals ranging from corporate fraud to outright theft of public funds were never far off.

Suspended Treasury Cabinet Secretary Henry Rotich, governors Mike Sonko (Nairobi) and Ferdinand Waititu (Kiambu) were some of the public bigwigs consumed by corruption-related scandals.

Arror and Kimwarer dams scandal

This takes the cake as 2019’s biggest scandal, claiming high profile casualties.

In July, Rotich, his erstwhile Principal Secretary Kamau Thugge and 26 other government officials were charged in court in connection with the multi-billion-shilling Kimwarer and Arror dams’ scandal.

Rotich and Thugge were charged with abuse of office, but denied the charges and were released on a Sh15 million cash bail. Rotich was accused of flouting procurement procedures in awarding a contract worth more than $450 million (Sh45 billion) for the construction of the two dams to an Italian firm – CMC de Ravenna.

This saw President Uhuru Kenyatta appoint Labour CS Ukur Yatani to the Treasury docket in an acting capacity, while Julius Muia (former PS Planning) took up Thugge’s position in what he said was to ensure “smooth operations” at the Exchequer, pending the outcome of the case.

KenolKobil insider trading

In a rare expose of insider trading in Kenyan listed companies following an inquiry, the Capital Markets Authority (CMA) cracked the whip on three individuals.

A special CMA committee found out that Andre DeSimone disclosed sensitive material on the KenolKobil transaction on the impending sale of the 24.99 per cent shares to Rubis Energie SAS (Rubis). He also disclosed the information to Aly Khan Satchu and Kunal Bid. Following the inquiry, the committee imposed on DeSimone a financial penalty of Sh2.5 million and further disqualified him from holding office as a key officer of a public listed company for a period of one year.

The committee at the same time disgorged Sh4.7 million being the amount received by Satchu as commissions from respective trades conducted based on insider information.

NHIF pay scandal

Early this year, it was reported that the National Hospital Insurance Fund (NHIF) could have lost more than Sh10 billion in false medical claims. The Sh10 billion, flagged as fraudulent, was part of about Sh50 billion paid to NHIF by Treasury as capitation premiums for medical cover for civil servants, Kenya Police Service, National Youth Service and Kenya Prisons Service since 2013. Capitation refers to a payment arrangement for healthcare service providers whereby a physician or group of physicians are paid a set amount for each enrolled patient assigned to them.

Kenya Power overbilling

Director of Criminal Investigations George Kinoti revealed that cartels working in Kenya Power stole Sh150 billion from unsuspecting customers in a five-year period.

The racketeers, including members of staff, brokers and companies, are said to have “perfected” a system where they had been overbilling customers, with domestic customers getting monthly bills as high as Sh300,000.

Itare Dam

In another dam scandal, former directors of the Rift Valley Water Service Board were among individuals summoned by anti-graft sleuths for grilling over the stalled Sh30 billion Itare Dam project.

Water CS Simon Chelugui was also questioned over the controversial project but denied any wrongdoing on his part.

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