Shadowy agents stalk Kenyans’ retirement fund
By Moses Michira | April 19th 2016
NAIROBI: A distressed woman drove into the Standard Group’s Nairobi office early one afternoon with explosive claims about workers’ retirement savings.
Chow, as she identified herself, drove in in a white SUV and was looking for whatever help she could get to keep her job back in China, she said.
She was finding impossible to win her employer any contract in Nairobi’s booming construction industry, yet a rival Chinese firm was having inordinate success.
“It is very frustrating. I am going to lose my job,” Chow said at that meeting two years ago.
It had become apparent that her firm was going to lose the bid to develop the civil works at the Tassia II housing project owned by the National Social Security Fund (NSSF).
Admittedly, she had been willing to give a bribe to win the contract, but the offer was turned down as it was “too small”.
Her fears came to pass on the Sh5.3 billion tender, which has come to split the board at the national pensions body. It also led to the sacking of Kazungu Kambi as Labour minister, and suspension of Richard Langat as the fund’s managing trustee.
A probe by the Office of the Ombudsman later found that the award tender was fraught with irregularities, and there was no board approval for the project.
An email circulated by a section of the board of trustees was the highest level of interaction or interrogation by the members, even though such approval needed the input of an actual meeting.
“The tender processing was rushed and the tender awarded before approval,” the Ombudsman concluded, after finding that the tender was opened on the same day the evaluation committee sat and approved it, before it was awarded on December 17, 2013.
It is impractical for the three meetings to take place concurrently. Questions were also raised on why the winning bidder was hurriedly informed via email the following day.
At the height of formulation of the disputed tender, Mr Langat’s predecessor in an acting capacity, Hope Mwashumbe, had been quietly edged out less than three weeks earlier.
She had risen to the top office at the institution, a position she came to hate, after serving as the head of legal and marketing.
Ms Mwashumbe shared her anger and frustration about shadowy figures who were running NSSF remotely, often through other senior managers who should typically report to the chief executive.
She was appointed acting chief executive in July 2013, serving barely five months but “encountering more frustration in those short weeks than her entire working life”.
Langat took over in November 2013, which marked the start of a tumultuous journey that saw him suspended from office, and potentially face criminal charges linked to the Tassia II Housing project.
The Ethics and Anti-Corruption Commission (EACC) recommended his prosecution, among other managers, for aiding corruption and abuse of office. However, the intended charges have been resisted by the office of the Director of Public Prosecutions (DPP).
A court has since barred the reinstatement of Langat at the helm of the public pensions manager by the Labour ministry under which NSSF oversight falls.
At present, the NSSF does not have a substantive chief executive, who is also the managing trustee. Its board is also not fully constituted following the exit of Adan Mohamed last year,; his replacement turned down the offer.
Economist and commentator Kariithi Murimi, Mr Mohamed’s successor, was appointed chairman of NSSF in January this year. However, he resigned from his position after only six weeks.
When Business Beat reached out to him for comment, his response was short: “Just let that matter rest.”
Mr Murimi runs a private consultancy firm, JMG solutions. The NSSF appointment was a plum one on the face of it, considering the wealth he would watch over, and the responsibility to more than five million savers in the fund.
NSSF manages more than Sh150 billion in workers’ retirement savings, invested in tens of buildings and residential estates, huge land reserves, shares in listed companies, bonds and cash.
The pension manager also has several development projects that are ongoing, including the extension of Hazina Trade Centre, which houses Nakumatt Lifestyle in Nairobi. It is expected to be the biggest commercial development within the city centre.
Other commercial buildings owned by the NSSF in Nairobi include Bruce House, Anniversary Towers and View Park Towers, and Hazina Plaza in Mombasa.
The fund also owns the largest free space in the capital’s central business district, at the intersection of Uhuru Highway and Kenyatta Avenue, currently used as a car park that generates an estimated Sh500,000 a day.
Outspoken trade unionists Francis Atwoli, who sits on the board as a trustee, said Murimi had found the level of corruption and wheeler-dealing at NSSF “simply unpalatable”, prompting his resignation.
“We have talked [with Murimi about the resignation] and he could not put up with the interference and manipulation,” Mr Atwoli said, alluding to the cutting of deals for self-gain and “external powerful parties”.
Atwoli is among the longest-serving trustees on the NSSF board on account of being the representative of workers’ various trade unions, but has also emerged as the fiercest critic of its management.
The fallout, especially with the Labour ministry, stems from an unsuccessful attempt to replace him and the employers’ representative on the NSSF board three years ago.
The two representatives targeted in the ouster claimed in separate interviews with The Standard that the Government was seeking to control the fund and use it to buy loyalty.
Atwoli has vowed to privately prosecute some of his former colleagues at the board, as well as top managers. This is after the DPP claimed there was insufficient evidence to charge the officials, yet Atwoli and the EACC say there exist grounds to sustain guilty convictions.
Mr Kambi, who should otherwise have been reinstated as Cabinet Secretary after his suspension last year, told The Standard in a previous interview that he believed the DPP has absolved him.
But later the same day, President Uhuru Kenyatta announced the appointment of Phylis Kandie as Kazungu’s replacement in a November restructure that also added the East African Affairs department to the Labour ministry.
Kambi was also accused of irregularly appointing Andrew Muigai and Veska Kangogo as trustees of the NSSF.
Fred Odongo was Kambi’s first casualty in July 2013. There were no explicit reasons given at the time he was given marching orders, even though claims of mismanagement would emerge down the road in interviews with senior officials, including Kambi himself.
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