Why court blocked Sh6.2bn NYS payments linked to Ben Gethi

Ben Gethi. [File, Standard]

The High Court has issued orders stopping the payment of Sh6.2 billion to firms linked to NYS Season One suspects, including businessman Ben Gethi Wangui, over alleged ghost contracts at the State-owned youth agency. 

Milimani Anti-Corruption High Court Judge Lucy Njuguna issued the orders following an application by the Ethics and Anti-Corruption Commission (EACC), which argued that the payments were fraudulent and illegal, as no goods had been supplied to the NYS.

"Pending the inter partes hearing of the application, the 1st to 6th defendants, by themselves, their agents, servants, successors in title, or personal representatives, are hereby restrained from claiming payment of Sh 6,167,797,655 from NYS on the basis of payment vouchers with annexures serialised as S/No 000001–002901," Justice Njuguna ordered.

Among those barred from claiming the payments are businessman Gethi with his six companies Schoolwork Enterprises, Newtool Mart Trading, Ratego Technologies, Realtool Trading, Comptool Trading, Horizon Limited and Tison Limited.

Also restrained are Elizabeth Wangeci Ngugi, associated with Liz Link General Suppliers, and Susan Nyambura Mburu, linked to Link General and Jimchar Enterprises Limited, all of whom are listed in the suit as the 1st to 6th defendants.

The court further issued an order barring NYS bosses, agents or servants from effecting the payment of over Sh 6.2 billion in regards to the supply of goods by the companies.

The orders were issued after EACC filed a suit following investigations into alleged irregularities in payment claims submitted to NYS.

The commission reported that suppliers, including Highview Trading, Horizon Limited, Link General, Real Tool Trading, Ratego Technologies, Comptool Trading, Jimchar Enterprises, Liz Link General Suppliers, Newtool Mart Trading, and Tison Limited, submitted a total of 277 Local Purchase Orders (LPOs), delivery notes, and invoices demanding payment of over Sh 6 billion for goods supposedly supplied between 2013 to 2014 and 2015 and 2016.

"Our investigations established that the 1st – 6th Defendants in connivance with the 7th – 15th Defendants, taking advantage of their positions as employees of NYS, contrived a fraudulent scheme to embezzle public funds allocated to NYS through fictitious procurement contracts," EACC states in its papers.

The EACC informed the court that businessman Gethi alone through six entities, collectively claims a total of Sh 3,4 billion for the purported supply of various items including ankle high boots, cooking oil in 20 ltrs, baked beans, white sugar, jerseys, army biscuits and round neck t-shirts

Additionally, Wangechi through the entity claims Sh 218 million from NYS for the purported supply of Blankets.

Investigations revealed that the LPOs, goods received notes, stock control cards, and inspection forms were falsified, with no deliveries made to NYS Headquarters in Nairobi or sub-units.

According to the EACC, NYS officials colluded with the companies to produce counterfeit documents, and records were manipulated to show nonexistent deliveries.

"The purported supply of goods was based on LPOs allegedly issued by NYS, but investigations show that 248 LPOs and S13 forms attached to the payment vouchers were not printed by the Government Printer nor issued to NYS," EACC noted in court filings.

The commission further alleged that the then Director of Finance, Mr Samwel Mudanyi Wachenje, abused his office by signing 245 out of 277 LPOs, despite knowing them to be fictitious.

According to court documents, EACC launched the probe after a formal request from the Cabinet Secretary for Public Service Geoffrey Ruku. 

The ministry flagged multiple payment claims submitted to NYS by alleged suppliers and requested verification of the legitimacy of the demands.

The EACC is now seeking various orders including barring the NYS from honoring the payment vouchers and effecting payment to the defendant companies and declarations that the same are illegal and fraudulent.