How tourism lender ‘forged minutes’ to approve sale of Sh700m property

Tourism Finance Corporation (TFC) managers tried to sell a Sh700 million property in Mombasa without approval of the board.

A report prepared by the corporation’s Board of Directors, shows there was no single document to indicate that the National Treasury had approved the sale of 1.9 hactres plot that has seen heads roll at the State corporation.

Cabinet Secretary for Tourism Najib Balala receives The International Diamond Prize for Excellence in Quality 2015 from former MD Tourism Finance Corporation Ms Marianne Ndegwa. Ms Ndegwa and other managers are accused by the Board of trying to sell property without approval.

Instead, the report heaps blame on the managers and in particular former Managing Director Ms Marianne Ndegwa, for unilaterally pushing for the sale of the plot. “Upon perusal of the relevant files, we did not obtain any document indicating specific approval by the National Treasury for the sale of the plot,” reads the report by the board.

Moreover, the intended sale of the property was done with Minutes which could not be ‘authenticated’ pointing to cooking of minutes.

“The original minutes of the said Board meeting are not available in the Board Minutes Book. The Board was then disbanded on July 20, 2012. The copy of Minutes could not be authenticated to be the true deliberation of the board,” according to the findings of the report.

Yesterday, the chair of TFC’s investment committee Dr Hanningtone Gaya said in a statement that former managers intended to sell the property at “low market value that would have cost the taxpayer millions of shillings despite advice to the contrary from statutory organs.”

This is the latest revelation of deep-seated rot at the public corporation with the controversial sale attracting the attention of the Ethics and Anti-Corruption Commission (EACC).

Some of the senior managers that have since been forced to exit include Head of Credit Abraham Muthogo, Dominic Ndegwa (Investments) and Carolyn Misoi (human resource chief).

Also, the report says the sale was neither “discussed in the management” nor “adopted as the corporation’s strategy.” Ms Ndegwa whose term ended in February 26 is adversely mentioned in the report for ignoring instructions from her former boss, then Minister for East African Affairs, Commerce & Tourism Phyllis Kandie.

The report says Ms Kandie had advised Ms Ndegwa to go ahead with the sale after satisfying all the legal and regulatory requirements, especially provisions of the Public Procurement & Disposal Act 2005.

Proceeds from the sale of the property would allegedly be used to fund other projects including Mombasa Convention Centre, the Marina and phase II of rehabilitation of Utalii House. However, the report found that there was “no mention of the disposal of the property as a strategic action to be implemented by TFC.”

“The corporation’s Strategic Plan only captures the sale of mature investments and privatisation of subsidiary companies within the privatisation framework,” reads the report.

Transfer of public assets can also not take place during the transition period, according to the Transition of Devolved Government Act. In some instance, Ms Ndegwa sought to get further approvals of the intended sale without revealing that the sale had been stopped by EACC and the property had a court case.

The former managers are also accused of concealing from the Finance, HR and Administration Board Committee a letter from the Senior Deputy Solicitor General which recommended that TFC Board of Directors not to go ahead with the sale as long as the EACC was still investigating the process.

“The corporation contravened the abeyance (temporary suspension) order and proceeded with the process of sale. Management withheld this information from the full Board and its committees,” said the report.