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Puzzle of two-month old firm that bagged Sh1b Kemsa deal

BUSINESS NEWS
By Moses Nyamori | February 25th 2021

Shop N Buy director James Cheluley when he appeared before the Public Investments Committee probing the Kemsa scandal at Parliament Buildings in Nairobi, yesterday. [Elvis Ogina, Standard]

The director of a company told MPs probing the Kenya Medical Supplies Authority (Kemsa) scandal that he registered a firm and within two months won Sh1 billion tender.

It also emerged that Shop N Buy, which is one of the major beneficiaries of the Kemsa tenders, only paid Sh687,000 as import tax despite telling the MPs that it shipped about 60 per cent of goods from China.

A document by Kenya Revenue Authority Commissioner-General Githii Mburu to the committee indicates that the firm declared goods worth Sh10 million at the port.

Shop N Buy director James Cheluley yesterday faced tough questions from members of the Public Investment Committee (PIC), who suspected that there could be powerful individuals behind the company.

The firm, registered on February 14, 2020, was awarded contracts worth Sh1,030,000,000 in May 2020 to supply 100,000 pieces of personal protective equipment (PPE) and 100,000 KN95 masks.

The firm also supplied PPE to Bennets Ventures, Edumart Enterprises and Trade Shop, which in turn supplied to Kemsa at a profit.

In a previous session, the committee was told by the suspended Kemsa procurement director Charles Juma how they were under pressure from the suspended chief officer Jonah Manjari to draft a commitment letter to the firm amid reports that the document was backdated.

MP Hassan Omar (Mandera East) suspected that the firm was enlisted purposely to benefit from the Kemsa billions considering how the deal was fast-tracked. Correspondences between the firm and Kemsa chief officer were responded to within a span of a day, leading to the award of the tender.

“It is clear that this company was registered purposely for Covid-19 supplies. You cannot register a company and within a month you get a contract worth over Sh1 billion. It is shocking that the only document you have for this kind of contract is a commitment letter by Kemsa,” said Omar.

Ruaraka MP T J Kajwang and Nairobi Woman Rep Esther Passaris said it was apparent that there could be other powerful forces behind the firm that ensured it benefited from the inflated contracts.

“Would you say it is so unreasonable to wonder the kind of person you are; that you can do all these without any god father? Are we being unfair to you when we say that you are a small fish being used by other big fish,” posed Kajwang.

Passaris said the speed with which the firm received response to its letter of intent to supply was suspicious and could have only happened with a powerful force behind it.

“You had your letter on 29th and on 30th you got a response. You did another letter and got a response within a day. You must be from a high office or you had someone pushing for you,” she said.

 

Unfairly linked

But Cheluley stated that he was his own man in securing the deal. He complained that he had been unfairly linked to top leaders, including Deputy President William Ruto and Nairobi Senator Johnson Sakaja.

“It has been mentioned that DP Ruto supported me just because we come from the same region. During your sitting, I also saw the name of Senator Sakaja being mentioned,” he said.

PIC chairman Abdulswamad Nassir, however, clarified that the DP had not been mentioned in the committee’s proceedings. He also explained that Sakaja’s name was mentioned for having been at Kemsa chief officer’s office when the commitment letter was being drafted. He said there was, however, no documents linking him to the firm.

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