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Rotich’s deal with four Italian banks was illegal, says DPP

By Kamau Muthoni | February 12th 2021

Former Treasury Cabinet Secretary Henry Rotich in court last month. [Collins Kweyu, Standard]

Former Treasury Cabinet Secretary Henry Rotich irregularly committed the country to loan agreements worth billions of shillings with four private banks for the construction of two dams, the State has said.

Director of Public Prosecutions Noordin Haji filed a response yesterday in a case where Rotich wants the State to drop corruption charges against him for the award of tenders to build Kimwarer and Arror dams.

According to Haji, the country lost Sh21 billion after Rotich okayed the projects despite being aware that there was no land for construction.

Police investigator Gilbert Kitalia lifted the veil on investigations that began in 2018, saying the former CS single-sourced for a loan from Italian banks, and that money for an insurance policy was not remitted to the State.

“Italian insurer SACE was contracted to secure the projects but the value of the policy was inflated by 400 per cent and it was paid even before the project plans and designs had commenced.

“Although SACE described and positioned itself as a lender or a government entity financier, they were brokers who just sourced for funds from the private banks and walked away with Sh11 billion as fees,” said Mr Kitalia.

The investigator disclosed that the Directorate of Criminal Investigations received a complaint on September 18, 2018, that there were governance and operational challenges in the management of the dams projects.

Bankrupt company

Kitalia claimed that the dams will not be constructed any time soon because Italian firm CMC di Ravenna, which was contracted to do the works, is bankrupt.

“It is beyond peradventure that the crimes hatched by the applicant, including the conspiracy orchestrated by the applicant, required co-operation and manipulation of others before the court. There is doubt that the applicant is guilty of crimes alleged against him and in respect of which he has been charged,” said Kitalia.

He continued: “The planned grand theft of more than Sh80 billion could not have possibly been contemplated or attempted without the willing participation of our own Cabinet secretary for Finance.”

The investigator claimed that the Italian government was not involved in the negotiations, preparations and execution of the facilities agreement.

“The fact of the matter is that the applicant CS Finance caused the Government of Kenya to be bound to four private commercial Italian banks in a contract he referred to as government to government agreement but which was never signed by any official of the Italian government or any other government.

Not even by officials of a government agency or an entity recognised as acting for the Government of Italy or any other government,” Kitalia said.

Rotich has claimed that he is a sacrificial lamb in the corruption saga. He insists that his former Environment colleague Judi Wakhungu requested Treasury to borrow funds to finance the projects, which were approved by directors of the Kerio Valley Development Authority.

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