House wants Fund probed for evading tax

By Luke Anami

Parliament wants a company that was paid millions of shillings by National Social Security Fund (NSSF) investigated for evading to pay tax amounting to Sh250 million.

Further, Parliament has demanded to know the owners of Pabco following revelations that the company has been deregistered and its money last paid by NSSF wired out of the country.

The revelations were made during the grilling of NSSF managers by the Parliamentary Committee on Labour and Welfare, which was chaired yesterday by Ms Sophia Noor.

"NSSF contracted Pabco to construct 300 houses in Kitisuru. But sometimes in 1999, the Fund was unable to continue funding the project and decided to scale it down," acting Managing Trustee Tom Odongo said.

"The Fund scaled the houses to 100 and that is when the legal problems with Pabco began."

NSSF entered into a contract at the value of Sh1.9 billion. Around 1999, the project was restructured and the scope of works scaled down to the value of Sh822 million.

But Pabco sued the Fund for a total of Sh1.3 billion.

"When the matter came before Lady Justice Koome she issued a decree in favour of Pabco to the tune of Sh667 million plus 14 per cent interest, which meant the Fund would pay Sh7 million each month due to interest," Mr Odongo explained.

The NSSF appealed though late but the ruling was upheld by Justice Muga Apondi. "It is at this stage that NSSF Board of Trustees entered into fray and agreed to pay Sh590 million."

Deregistered

However, Belgut MP Charles Keter stunned the committee when he said the company in question folded as soon as it was paid its monies.

"It is ridiculous for a company that as soon as it received its last payment on July 5, last year, Kenya Revenue Authority issued a letter on 15th and ten days after that the money was wired out of the country," Mr Keter said.

"We want NSSF to explain to us who the owners of this company are and why NSSF entered into contract to pay its subcontractors. Pabco has since been deregistered," he added.