NAIROBI: The Central Bank of Kenya (CBK) Wednesday came to the defence of the National Treasury in explaining the transactions surrounding the Eurobond.
But in its explanation, the CBK seemed to contradict part of an earlier account given by the National Treasury in one of the transactions involving a Sh34.6 billion transfer.
While CBK cites July, 2014 as the date that one of the key transaction was done, Treasury gives June 30, 2014 as the date of the cash transfer, a contradiction that has deepened the mystery surrounding how the Eurobond cash was used.
According to the version given by the CBK Wednesday, the money from the first tranche was received in three different instalments on the same day at an offshore account it had opened at JP Morgan Chase Bank in New York. JP Morgan is one of the biggest US bank by assets. But it has been hit by various scandals in the recent past and was fined Sh200billion for money laundering.
According to the CBK, the money was received on June 26, 2014 in the JP Morgan account. This transaction happened four days to the end of the financial year. The particulars of the transactions are that CBK received a total of Sh174 billion ($1.9 billion) in three deposits. Treasury did not withdraw any funds from this account, according to the CBK records. As a result, the cumulative bank balance at the end of that financial year stood at Sh174billion.
The Government then paid the Sh53.2 billion syndicated loan on July 3, 2014. On the same day, it wired Sh34.6 billion to the exchequer account. This was money said to have been used for infrastructure projects in the 2013/2014 financial year.
However, this transaction differs with the version given by Treasury. The Treasury had earlier in a statement posted on its website indicated that this amount was transferred on June 30, 2014. The dates are significant because the Government's financial year ends on June 30, and therefore any transactions in the June date are factored in the year ending June.
Also, according to Treasury, at the end of the year, it had bank balances of Sh140.5 billion, while CBK, which holds the account on behalf of the Government shows that the balances were actually Sh174 billion, adding more confusion to the already delicate situation. We sought an explanation from Treasury on this but there was no response to our text messages. Treasury Secretary Henry Rotich and his principal Secretary Kamau Thugge did not return our calls either.
The latest discrepancy may hurt efforts by the Government in explaining that no money lost. This comes days after the Government was at pains to explain a mix-up of reference numbers on letters directed to the Central Bank to transfer billions of shillings to the Consolidated Fund. Rotich had termed the mix-up as an administrative issue and touching on typing error.
"The referencing is a clerical issue and I just need my staff to tell me how they were filing it but this is just an administrative issue and it does not point to any loss of money. The letters were internal memos to the Central Bank. The principal issue in this matter is if money was lost or not. But records are very clear that all the money was accounted for," Rotich told The Standard in a telephone interview recently.
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