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Kenya Power boss, ex-CEO arrested over Sh4.5b scam

BUSINESS NEWS
By Paul Wafula and Graham Kajilwa | July 15th 2018
Kenya Power Company Managing Director Ken Tarus (left) and his predecessor Ben Chumo were arrested on Saturday. [File, Standard]

The Director of Public Prosecutions (DPP) Saturday struck Kenya Power Company hard after he authorised the arrest and prosecution of 10 top executives including a former and current managing director over Sh4.5billion scam.

In a move that may cripple the power utility firm and leave the top management floor almost vacant, DPP Noordin Haji, also ordered the prosecution of 33 directors of firms that were irregularly awarded tenders in what is emerging to be a scam in the supply of tenders.

At the centre of this directive is the puzzle of how a Sh4.5 billion contract to supply transformers was first terminated by KPC and then a ‘settlement agreement’ reached with the supplier.

This saw Haji spread his tentacles to the former Kenya Power boss Dr Ben Chumo, current MD Ken Tarus, Peter Mwicigi, GM Regional Coordination and the company legal secretary Beatrice Meso who were arrested Saturday morning by the Directorate of Criminal Investigations officers.

Haji struck the firm where it hurts most, beginning with Chumo’s successor at the corner office, Mr Tarus who was at the time of the scandal the Chief Finance officer at the company.

Also to be charged is the the General Manager (GM) Network Management Benson Muriithi, GM Business Strategy Peter Mungai Kinuthia, GM Commercial Services Joshua Mutua and the GM Human Resource and Administration Abubakar Swaleh.

Other executives are ICT boss Samuel Ndirangu, GM infrastructure development Stanley Mutwiri, Network boss Benson Muriithi and Supply chain boss John Ombui.

“Whereas it is regrettable the decision to charge herein will affect most of the Kenya Power top management, this action is however necessary and in public interest in order to combat and deter corrupt activities within the organization,” Haji said. 

Sources within the power company told Sunday Standard that an emergency board meeting was called last night to deliberate the company’s next steps and pick a team that will run the company following the stripping down of the executive by the DPP’s office.

The DPP said those named will be charged with a conspiracy to commit an offense of economic crime, aiding the commission of a felony, abuse of office, willful failure to comply with the law relating to procurement and conspiracy to defeat justice.

Chumo had already been nominated by President Uhuru Kenyatta as that Salaries and Remuneration Commission chairperson.

The mystery, as expressed by Haji is how Kenya Power terminated a contract issued to Muwa Trading Company in August 3, 2012 when issues arose of ‘massive failure’ of the transformers and delays in deliveries.

This prompted Muwa to sue the power company on breach of contract. Investigations revealed that Kenya Power cancelled the contract allegedly on account of poor quality of transformers.

But despite this being the clear position of Kenya Power, the suit filed was compromised as the parties recorded the matter as ‘settled.’

“Notably, the details of the deed of settlement which had been negotiated between Kenya Power and the firm were not spelt out in the recording of the consent thereby keeping the court in the dark,” said Haji.

As a result, of this undisclosed deal, taxpayers lost Sh310 million and were it not for the investigators, Haji said the payment would have continued until the full amount of Sh4 billion.

The DPP also extended the purge on the scandal to directors of Muwa Trading Co. Limited who also have an arrest warrant on their necks.

The directors are James Njenga Mungai, Grace Wanjira Mungai, John Anthony Mungai.

The other contracts that will claim more people are the labour and transport contracts whose tender was floated in 2017.  

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