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Former and current top National Housing Corporation managers face charges over city housing scandal

By - Cyrus Ombati and Isaiah Lucheli | Oct 17th 2013 | 3 min read

By Cyrus Ombati and Isaiah Lucheli

KENYA:  Five former and current top managers of the National Housing Corporation (NHC) are expected in court Thursday to face corruption-related charges.

They are accused of illegally allocating themselves houses valued at millions of shillings in a scheme that was supposed to be competitive.

Officials from the Ethics and Anti-Corruption Commission (EACC) Wednesday arrested the former managing director, James Ruitha, former company secretary Elizabeth Mbugua, technical manager William Keitany, chief estate officer John Okumu and technical manager Bernard Ogola for formal processing before they appear in court.

This was after the Director of Public Prosecutions agreed with EACC recommendations that the officials should be charged in court.

The officials are also accused of illegally allocating their friends and relative houses in a scheme meant to be competitive in 2012.

They are also accused of allocating houses to senior government officers as well as members of staff of NHC.

In March last year, the entire board of NHC was suspended by then Housing minister Soita Shitanda to pave the way for investigations.

An audit team commissioned by the Inspector-General of State Corporations was called in to probe the allegations.

The Standard had earlier established that EACC had launched investigations into an alleged Sh1 billion scam at NHC.

Reports indicated that investigations centred on alleged irregular acquisition by the state corporation of 10 acres in Nairobi’s Eastlands whose value had been inflated.

Sources said senior managers were under probe because the land had been inflated from a market price of Sh493 million to Sh800 million.

NHC reportedly reached a deal to pay a firm Sh790 million for 9.38 acres to construct a highrise complex.

But experts said the project was not economically viable and contravened the corporation’s vision of providing cheaper housing units for Kenyans.

The purchase of the land in Imara Daima raised questions given that there was a charge on the property, high-voltage cables that pass through the land, unclear beacons and varying valuation reports.

Deal blocked

A tender committee that blocked the purchase citing the problems was replaced with a friendly team.

The corporation declined to respond to inquiries by The Standard sent via email.

Among the answers sought was whether EACC had launched a probe over irregularities in the purchase of land by the corporation.

The Standard also sought to establish whether the tender committee was disbanded for not awarding the flawed tender to a company that had bid Sh97 million, only for the same company to win the bid at Sh123 million after a new tender committee was constituted.

Also raising eyebrows was why the corporation, which has 150 acres in Stony Athi, next to Superior Home Estate, and another 12 acres in South B Estate, did not consider spending the Sh800 million to construct houses on either of the properties.

EACC wrote to NHC Managing Director Peter Wachira Njuguna seeking to be furnished with documents that would help with investigations.

In the letter, EACC stated that the corporation had been accused of having been involved in irregularities in the purchase of land under tender number NHC/Purchase of prime land /344/2012.

“To facilitate investigations, kindly furnish us with the following documents: the advertisement notice for the expression of interest, list of all respondents to the tender and tender documents,” the letter, dated August 30, this year, read in part.

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