Stolen Sh51m Kilifi county cash sent to five city firms

The Kilifi county government lost over Sh51 million from its bank accounts after an electronic money transfer system was manipulated.

Crooks are said to have stolen passwords belonging to 10 officials, used them to access the Integrated Financial Management Information System (Ifmis) and siphoned money from the county government's account at the Central Bank of Kenya (CBK).

Preliminary investigations show the money was transferred into the bank accounts of several suspect companies in Nairobi between September 29 and October 3.

However, county officials have denied the possibility of more losses even as the scandal continues to generate heat, with locals demanding answers.

Officials have disclosed that CBK took a week to reverse the impending transfer of Sh8 million, part of the loot, to a suspect firm as the regulator required a court order to do so.

Yesterday, Governor Amason Kingi said companies that received the money had never been pre-qualified to do business with the government.

"It is so absurd that private companies could collude with some people to steal taxpayers' money in a county faced with drought, hunger and unemployment. We urge the Ifmis department and other agencies to speed up investigations and punish the culprits," said the governor.

He also warned that unless measures were taken, the accounts of several county governments at CBK would be wiped clean through the manipulation of Ifmis.

Reports of the suspicious dealings first emerged on October 10, when an accountant alerted the county administration of an alleged theft of Sh30 million from the CBK account.

This sparked off panic, forcing Kingi to convene a meeting where it was resolved that CBK should be informed about the theft. CBK is said to have acknowledged that some money had been moved electronically from the county's account.

After a meeting between Kingi and CBK officials on October 17, further investigations established that indeed, Sh51,209,775 had been transferred without approval by the county government.

Consequently, the 10 county government officials whose passwords were used to steal the money have been suspended pending investigations into claims they were involved in fraud. Those sent home include the whistleblower, whose password was among those reportedly stolen and used in the theft.

"The officers have been suspended after it was established that their passwords were used to transfer the money in question. We have asked them to step aside following our meeting with CBK officials to allow for investigations," said County Secretary Owen Baya.

Dr Baya said an official who alerted him about the theft was among those suspended.

However, those who were suspended have denied any wrongdoing. They said their passwords were stolen and used to steal the money after Ifmis was compromised.

The Standard has established that the transfers were made between 6pm and 7pm on the said dates. And investigators have since established that the money was transferred to an Equity Bank account in Ngara as well as accounts in Jamii Bora and Consolidated Bank accounts along River Road. Also cited was a Diamond Trust Bank account.

The accounts have been traced to five firms, one of which is said to have received Sh11.3 million in two tranches through its account at Equity Bank. The company was registered as an M-Pesa outlet along Juja Road on January 28 last year.

Another firm received Sh9.3 million through an account in Jamii Bora Bank. The company was formed on September 29, 2014, and located along Lenana Road.

The third firm received Sh10.3 million in two installments of Sh3.2 million and Sh7.1 million reportedly wired through its account at Consolidated Bank along River Road. The company, registered on May 4, 2015, has its headquarters at Nacico Plaza along Landhies Road.

Another one received Sh7.8 million through its account with Diamond Trust Bank, Village Market. It was registered in November 25, 2011, and it is housed at Embassy House along Harambee Avenue.

The fifth company named in the investigation is located in Umoja One along Outer Ring Road. It was established on April 17, 2009. This firm received Sh6.7 million through its Consolidated Bank account.

CBK was able to stop the theft of Sh8 million that was in the process of being transferred after the county reported the theft.

The Standard has established that the investigations involve the Ethics and Anti-Corruption Commission, Banking Fraud Investigations Department and the Directorate of Criminal Investigations. No one has been arrested so far.