Report puts Mumias mess on Evans Kidero's doorstep

NAIROBI: A parliamentary draft report on the ailing sugar industry says Nairobi Governor Evans Kidero, who was Managing Director of Mumias Sugar Company (MSC), should take “full responsibility for the fraudulent transactions” that have brought the firm to its knees, The Standard on Saturday can reveal.

The Agriculture sub-committee also recommends that Dr Kidero “should be barred from holding public office as the fraudulent transactions took place under his watch.”

Mumias East MP Benjamin Washiali, a member of the committee, confirmed the contents of the draft report. “We are going to finalise the report next week. At the time of writing the final report, we did not have access to the KPMG audit. We want to update ours with the findings of KPMG before we table it in Parliament,” he said. But this week, Kidero came out fighting and defended his record at Mumias.

He denied allegations linking him to the financial woes rocking Mumias and maintained that he had nothing to do with the rot that has led to the miller’s near collapse. Kidero says during his reign - October 2003 to June 2012 - he posted positive results as the company’s managing director.

The revelation regarding the parliamentary draft report comes as the anti-graft watchdog launched investigations this week into the Mumias Sugar scandal, just days after a forensic audit by KPMG gave the public a rare glance into the rot that led to the near collapse of the miller.

The Ethics and Anti-Corruption Commission (EACC) said it has started what it described as “an active investigation” into the allegations of corruption at Kenya’s most important sugar company, we can also reveal.

EACC has revealed that the KPMG forensic report that listed at least 20 former and current employees will form part of its investigation, and that it will summon people involved to record their statements.

“The report is part of the documents informing this investigation and as is the practice in every investigation, any one mentioned will be called to give their side of the story,” EACC spokesperson Yassin Amaro told The Standard on Saturday on phone.

Amaro said the Mumias saga has been “prioritised” given the number of people who have been affected by the mess at the company.

The development comes days after the Director of Public Prosecutions (DPP) Keriako Tobiko wrote to the anti-graft agency and the Directorate of Criminal Investigations to furnish his office with the state of investigations into the sugar scandal.

The draft parliamentary report, which is due for tabling before the House for debate and adoption, also makes startling revelations of how Mumias under Dr Kidero’s watch worked with rogue companies to export fictitious sugar to Uganda, the Democratic Republic of Congo, South Sudan, Sudan and Ethiopia.

“... Dr Kidero should, as a consequence, be barred from holding public office as the fraudulent transactions took place under his watch,” the report by the Departmental Committee on Agriculture, Livestock and Co-operatives, titled The Crisis Facing The Sugar Industry in Kenya, says.

It also wants the government to take action against owners of trucks that were used to move more than 1,400 tonnes of sugar from Mumias go-downs. The report bears striking similarities to the KPMG audit, which paints a grim image of management and procurement flaws within the company. Some of the decisions made by the management, the report says, contravened established procurement procedures.

The committee, chaired by Mandera North MP Adan Mohamed Noor, wants the government to probe further the cause of diminished returns of the firm, which, based on its installed production capacity of 14,000 tonnes of sugar per day, is capable of milling enough sugar for the East African Community and for export outside the bloc.

Contacted over the status of the report, a number of committee members, including the chair and his vice-chair, Kareke Mbiuki, would not respond to our phone calls.

Washiali, the Mumias East MP, said: “...Kidero must be made to account for his actions that deprived more than six million people who depended on sugar cane of their livelihood.” The MP would however not comment on whether Kidero should face criminal prosecution for crimes of an economic nature.

In his defence against allegations, Kidero told the committee “that he did not have any documents to corroborate his submissions but that he believed the current management should furnish the committee with the necessary documents available on the exports; that during his tenure at MSC, the company was making good profits, paying farmers in good time...”