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MPs fault KACC for NSSF payouts

By | April 18th 2012

By Luke Anami

A Parliamentary committee has hit out at the defunct Kenya Anti-Corruption Commission (KACC) for authorising payment of millions of shillings in contracts now under investigations.

Parliamentary Public Investments Committee (PIC) also blamed court cases for frustrating investigations into payments made by National Social security Fund (NSSF) to Lugari MP Cyrus Jirongo and Sololo Outlets.

And even after NSSF had paid all the monies, it has emerged Sololo are back in court under a certificate of urgency to claim a further Sh1.5 billion allegedly on the promise of former Managing Trustee Alex Kazongo to review the claim after the payment of Sh490 million.

Acting Managing Trustee Tom Odongo said the fund paid the money following a letter from KACC.

"We received a letter from KACC director PLO Lumumba asking us to make payment noting our delay is against a court order," Odongo said.

received letter

"Having gone before Lady Justice Martha Koome and lost. Having appeared before Justice Muga Apondi and lost. NSSF was contemplating going to the highest court in the land, but it received a letter from KACC authorising payment," Odongo said.

The Parliamentary committee while grilling NSSF management led by chairman Adan Mohammed took issue with KACC for authorising NSSF to pay Jirongo and blamed its former managers for committing the fund to enter into shady deals that have fleeced poor pensioners their hard-earned savings.

"This is a conspiracy between your lawyers, Lumumba and Donald Kipkorir to pay as there was no obligation," Juja MP William Kabogo said.

The committee further took issue with the former managing trustees for entering into a contract with Sololo in an election year.

"This contract was signed in February 1993, but work commenced in September 1992 and in May 1993, the contract was terminated by NSSF. To me the project was initiated for purposes of getting money for election campaigns, " John Mbadi, the Gwasi MP, said.

"The Sololo matter has been before the courts for the past 20 years. This has made it difficult to be concluded," PIC chairman Mithika Linturi said during the questioning of NSSF management on Monday at Parliament buildings. "But of concern to us is that you appeared before this committee and undertook not to pay any money until the legal processes are complete. Explain to us why you paid the money?" he added.

colossal amounts

Odongo explained that the fund had no powers to stop payments authorised by the courts through a Garnishee order (A legal procedure by which a creditor can collect what a debtor owes by reaching the debtor’s property when it is in the hands of someone other than the debtor).

"Former managing trustees and internal managers should be punished for entering into contracts that cost the fund colossal amounts of money," Yusuf Chanzu, PIC vice-chair said.

The committee was stunned by revelations that the fund failed to enter into a written contract with Pan Africa Builders and Contractors.

The matter of Jirongo and Sololo began when the fund purchased two properties LR No 209/9101 and 209/9103 from Sololo Outlets Ltd for Sh1.2 billion.

The project was Sololo’s and the fund only came in as a funder, a matter that irked the committee.

"Since when did the mandate of NSFF change to become that of a bank?" Linturi posed.

NSSF board of trustees intervened in the tussle with Sololo and agreed to settle out of court for a sum of Sh490 million. The amount has been paid.

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