Anglo Leasing tycoon demands Sh3b for security-related deal

Kenya: The Government last week paid Sh1.4 billion to two Anglo Leasing companies linked to business tycoon Anura Pereira, who now wants Sh3 billion for yet another controversial security-related contract.

Lawyers representing Kenya could not convince judges in a Swiss court why the suspect contracts were cancelled by the State despite what seemed like obvious procurement flaws.

Among the arguments that the State had presented in court was that the contract prices had been overly inflated, amidst claims of bribery of top Government officials to influence the awarding of the tenders.

An audit by consultancy firm PricewaterhouseCoopers (PwC) had for instance unearthed the massive overpricing for goods and services, which were hardly ever delivered even though payments had been received by the contractors.

Judges in the Geneva court however, disallowed PwC findings on the irregularities in the procurement and the subsequent award of the tender to suspect firms including First Mercantile Securities Corporation.

In the case, Kenya had entered Sh1 billion ($11.7 million) contract with FMSC to finance the purchase of satellite equipment for the Postal Corporation of Kenya but a third party was the actual supplier.

Already, the State has paid Sh1.4 billion to two foreign firms whose existence is questionable.

A Kenyan court had in 2012 declared two of the companies that were claiming billions from the State as non-existent entities, with Justice Mathew Anyara Emukule ruling that the pair could in that regard not sue.

Since Justice Emukule’s ruling has neither been challenged nor overturned to date, there would be new questions why the Treasury made the payments to parties that are absent.

Treasury Cabinet Secretary Henry Rotich told Parliament that the State was better of settling all the outstanding claims made by the faceless firms immediately to avoid further costs on interest.

Muthoni Kimani, the deputy Solicitor General is said to have advised Treasury that the litigations had adversely affected the issuance of the Sovereign Bond.