Mining Cabinet Secretary Najib Balala fury at Sh80m bribe accusations

Jacob Juma shows journalists a letter purpotedly written to EACC at a press conference in Nairobi, on Friday. [PHOTO: COLLINS KWEYU/STANDARD]

By FELIX OLICK

KENYA: One of the 42 firms whose licence was cancelled by a Cabinet minister earlier this week has sensationally accused him of demanding a ‘million-dollar bribe’.

The firm has also threatened to seek Sh850 billion in compensation.

Mining Cabinet Secretary Najib Balala has angrily denied asking for a bribe.

The claims are the latest twist in the controversy surrounding the cancellation of special prospecting and mining licenses issued by Commissioner of Mines and Geology Moses Masibo. Balala this week suspended Masibo over the matter.

Just a day after threatening to seek redress in court, officials of Cortec Mining Kenya claimed that Balala revoked their licence “irregularly” after they allegedly declined to give in to his demand for an Sh80 million bribe. Country director Jacob Juma produced a letter allegedly sent to the Ethics and Anti-Corruption Commission a week before Balala cracked the whip to report the matter. He, however, said the demand for a bribe came through Mr Masibo.

“On Saturday July 6, I received a telephone call at around 9am from Mr Masibo requesting a meeting,” the businessman said yesterday at a press conference in his Lavington office. “At the meeting, Masibo complained that Balala was demanding Sh80 million from Cortec and that if the company did not honour the payment, the minister would cancel the licence.”

New house

Juma, who is also a director of another firm at the centre of a botched maize supply deal with the Cereals Board, claimed he later met the minister at a house he (Balala) was renting in Kileleshwa, where he was asked for a bribe.

According to a letter written by Cortec Managing Director David Anderson to EACC, Balala told Juma he had sold his previous home in Karen to raise funds for the March 4 elections and needed money to buy a new house.

“Balala confirmed to Juma that he required Sh80 million from Cortec to buy a house for he had sold his house in Karen to raise funds for campaigns…,” the letter to EACC reads. It is copied to President Uhuru Kenyatta and Directorate of Criminal Investigations head Ndegwa Muhoro.

In a dramatic turn of events, Juma purportedly called the embattled Commissioner of Mines Masibo during the press conference and got him to confirm his account.

“Yes, he (Balala) was demanding Sh80 million to buy a house,” said the voice on the phone.

Just a few days prior to its licence being cancelled, Cortec had announced the discovery of niobium and other rare earths at Mirima Hill, Kwale County. Rare earths are minerals used in circuitry for modern technology, including cars, phones, diode lights among others. Niobium is specifically used to make alloys for jet engines and to strengthen steel. Cortec claims the minerals, in which China is also interested, are valued at an estimated Sh51.2 trillion.

But earlier this week, Balala revoked 31 mining licences issued “irregularly” by Masibo between January and May this year and suspended the mines boss for “overstepping his mandate”. The Cabinet Secretary insisted that in this transition period no major policy decisions could have been arrived at as Parliament stood dissolved and there was no substantive Cabinet or minister to oversee licensing.

Balala at the same time announced the formation of a six-member team, chaired by lawyer Mohammed Nyaoga, to audit all mining licences issued since 2003. The taskforce, to be gazetted this week, will give a report within two months.

But yesterday, the Cortec official came out guns blazing and claimed their deal had been given a clean bill of health after a meeting with President Kenyatta on April 26 at State House, Mombasa.

Maize importation

He maintained their special licence was validly issued in accordance with the Mining Act and threatened to seek Sh850 billion in compensation if the revocation is not overturned. Juma is already seeking Sh500 million over a cancelled maize importation deal.

Cortec Mining received the licence from the Government on March 26, the same day that the Supreme Court began hearing a petition by former Prime Minister Raila Odinga against the March 4 election of President Kenyatta. The licence was issued even as Kenyatta, then President-elect, ordered all ministers and Permanent Secretaries in the former Grand Coalition Government not to approve any contracts or licences on behalf of the incoming Jubilee government.

The firm was issued with a Special Prospecting Licence (SPL), number 256, for about 610 square kilometres in Mrima Hill. It was initially issued for a two-year period from April 1, 2008 to March 31, 2010. The licence was renewed for two more years to March 31, 2012. However, in December 2011, the SPL was further renewed for a period of three years until December 1, 2014.