A dizzying Sh2 billion may have fraudulently been obtained from the Kenya Pipeline Company (KPC) by a couple using briefcase companies.
A KPC staff, his nephew and the nephew’s wife now face prosecution over the eye-popping fiddle from the State-run oil distributor through fictitious firms.
And now Directorate of Criminal Investigations boss George Kinoti has recommended graft charges for the trio at the heart of the mega fraud.
At the centre of the scandal are seven phantom companies that were registered and carefully choreographed to siphon the billions from KPC without raising eyebrows.
The firms are Sealing and Seals Limited, Thermo Dynamic General Supplies Limited, Boiler and Petroleum Piping Systems Limited and Aero Dispenser’s Valves Limited. The others are Trans- Africa Pipeline Engineering Company Limited, Embridge Engineering Limited and Nairobi General Supplies Limited.
Suspicions were first raised when detectives could not establish the physical locations of companies as stipulated on the search based on CR12 documents from the Registrar of Companies.
Sealing and Seals Limited was allegedly paid Sh47 million for supplying Mechanical Seals while Aero Dispenser’s Valves Limited got Sh647 million for the supply of 60 hydrant pit valves.
All the seven companies are claimed to have offices at Gill House situated between Moi Avenue and Tom Mboya Street in Nairobi’s central business district.
In addition, Thermo Dynamic General Supplies Ltd received Sh400 million for delivering composite and metallic sleeves, while Boiler and Petroleum Piping Systems and Nairobi General Supplies pocketed Sh270 million and Sh637 million for supplying gaskets and O-rings, mechanical and rubber seals respectively.
At the heart of the emergent mega scandal is Aero Dispenser Valves Ltd, that is also being probed by the National Assembly Public Investment Committee over the same.
Investigations by the DCI revealed that the seven companies are owned jointly by John Huba Waka and his wife Beryl Aluoch Khasinah as well as Francis Amina Juma, a senior KPC employee.
Detectives revealed Juma, Waka’s uncle, helped the couple penetrate KPC’s pool of tenders to scoop lucrative deals worth billions of shillings.
A report filed to the Director of Public Prosecutions (DPP) on July 2 which the People Daily has seen puts Juma at the centre of the scam.
“Juma is actually the main pillar and mastermind behind the scenes in the scams with Waka, his nephew, manning the businesses on his behalf,” reads the DCI report in part.
According to Kinoti, Khasinah, an employee at the National Hospital Insurance Fund (NHIF) together with her husband is a director in all the seven companies.
In his report, Kinoti blames the multi-billion-shilling scandals engulfing KPC on the couple.
“It is worth noting that the said fraud that was being investigated is the same saga that is bewildering KPC before the parliamentary committee touching on grand corruption and all these seven companies were mentioned,” he says.
“It is this aura or illusion of trying to subdue the truth from being revealed through investigations that the cartels were out to malign the name of the investigating officer and thwart the investigations by all means possible. In a nutshell, the case involves huge sums of money, suspected to have been stolen from government entity and the suspects are out to do anything to justify the adage or axiom that corruption hits hard”.
Khasinah told detectives she was incorporated in some of the companies without her knowledge by Juma and her husband, a welder at KPC and denied knowledge of the companies despite being a signatory in all.
During interrogations, Kinoti says, Waka and Khasinah were unconvincing, claiming they did not have documents and needed time to consolidate them because as directors, they were agents of certain companies in the diaspora as far as Canada… which they had to first contact for letters and necessary papers to explain their cases.
It is was on that premise that the DCI released Waka from custody on a cash bail of Sh100,000 while his wife was released on a free bond to await the documents that were due for submission on September 7 last year.
However, Waka did not show up, only to later call to request that he reports to the DCI Headquarters on Kiambu Road on a Monday, which was a public holiday.
On October 30, a month later, the investigating officer received a copy of a letter through the Officer Commanding Flying Squad copied to Internal Affairs Unit at Jogoo House and IPOA that he had received Sh24,000 from Waka and had stolen cash from an individual only identified as Nyandieka.
“Following those allegations, the investigating officer was summoned by the Internal Affairs Unit and appeared before Okal (SSP) and IP Musoga and upon explaining himself was cleared to go back and proceed with the investigations,” said Kinoti in the report.
Investigations by the DCI revealed that the suspects had also used a pseudonym Ruth Auma to meet the registration requirements of the companies.
On the locations of companies, detectives established that none existed in the addresses they purported to operate from. Kinoti subsequently also wants to arrest and prosecute a Nyandieka of Nyandieka and Company Advocates whom he says, has represented the couple in various cases against EACC.
On paper, Sealing and Seals LR 209/8838 operates from Gill House, Aero Dispenser Valves Ltd LR 209/1206 (Utalii House), Continental Engineering Ltd LR 209/1/92 (Moi Avenue, no building) and Enbridge Engineering Ltd (Gill House) yet they do not exist.
Thermo Dynamic General Supplies Ltd LR 209/8948 (Uchumi House) and Boiler and Petroleum Piping Systems LR 209/4631 (Kenyatta Avenue) also do not have physical locations.
“All the LR numbers that are indicated on CR 12 purported to be the location of the said six companies are not true and cannot be found in both national and county lands offices,”according to the DCI report.
Tellingly, the LR number 209/8948 purported to be at Uchumi House Aga Khan Walk was found to be in Starehe and belongs to a women’s building society.
On May 23 this year, EACC detectives conducted simultaneous raids on the residences of former KPC managing director Charles Tanui, KPC welder Waka, Francis Omondi Obure, procurement manager Nicholas Gitobu and Finance Manager Samuel Odoyo.