How Athletics Kenya duped Chinese firm into signing six-year contract
SEE ALSO :Kirwa: Poor planning cost usIt is on the strength of this letter that Diack says they were able to sign a $10 million (about Sh919 million) deal with Li-Ning to supply sporting goods to AK for six years after the approval of Kiplagat and his team at AK. "In three months, we were successful to find an agreement with Li-Ning for a deal over $10 million for six years - 2011 to 2016 and it was fully signed by both the AK President, General Secretary and Treasurer in July 2010," says Diack. Documents in our possession show that AK in a letter to Diack dated August 2, 2010, confirmed the acceptance of Li-Ning. "As per the mandate given to you on January 8, 2010 for the sponsorship of the sporting goods category, we hereby confirm our acceptance to the proposed agreement signed between Li-Ning and Pamodzi in July 2010," reads the letter signed by Kiplagat. "Please find attached the invoice for the signing on fee of $200,000 and our bank account details in which LI-Ning or Oceans Marketing should make the transfer as per the terms of the agreement. Congratulations on your successful achievement and we are looking forward to a strong and genuine partnership with Li-Ning," adds Kiplagat in the letter.
SEE ALSO :Iten to host relays national trialsThe reasons for the termination of the contract by AK through its President raises eyebrows on the real intention of the deal in the first place. Kiplagat in the letter in our possession alludes to the fact that the deal had become public, necessitating termination and delaying the process. "It has become extremely difficult for us to proceed with the Li-Ning agreement because of many factors which we cannot overcome as earlier anticipated. The matter appears to have gotten into the knowledge of quite a number of people including authorities in Kenya thus raising a lot of speculations and we feel the same should hold for a while," reads the letter signed by Kiplagat. Kiplagat in the letter suggested to Diack that they delay the process till the expiry of Nike's contract in 2012. "This is fair as this will give us time to approach the negotiations and eventual agreements in a more conducive atmosphere without exposing our interests to public debate," said Kiplagat. This, however, did not happen as AK signed a longer deal with Nike which expires in 2020. "We never approached AK after November 2010, as we were told that they negotiated with Nike for a 10-year deal," said Diack. A week later on November 12, Kiplagat wrote a letter to the KCB manager asking the bank to transfer $200,000 to Oceans Holdings Company Limited in Hong Kong. This was a refund to Li-Ning for the signing fee it had earlier paid. "Kindly arrange to transfer $200,000 from Athletics Kenya Dollar account No 702003932 to the following address: Oceans Holdings Company Limited, Standard Chartered Bank Shop 113-117, Great Eagle Centre, 23 Harbour Road, Wanchai, Hong Kong, Account No: 580-1-009054-7, Swift Code: SCBLHKHHXXX," reads the letter by Kiplagat and Joseph Kinyua who was Treasurer then. It is, however, signed by Kiplagat alone. The refund, the documents show, was from the $500,000 Nike had transferred to AK accounts on November 8, 2010. Diack said it was a complete breach of contract and Pamodzi could have taken Athletics Kenya to court to seek compensation for damages caused by the credibility loss it caused the company. "I decided not to disgrace such an important member of the African athletics family and especially an IAAF Council member thus did not move to court. For now I have to swallow my pride as a true African not to embarrass my fellow Africans and a great country of African athletics but will never let my reputation be tarnished when my company lost money and credibility over this deal," said Diack in an email to The Standard. Record statement Diack regretted that The Standard on Sunday expose made them realise that they were used by AK to re-negotiate a deal with Nike. "And if there are problems arising from that, the only persons to be blamed are AK officials," he said. Detectives are investigating AK officials for suspect dealings during the transactions. Okeyo and Kinyua have already recorded statements. Kiplagat, was yet to record a statement by the time of going to press because he was sick.
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