Kenyan auditors now to fly out over Eurobond billions

Auditor General Edward Ouko(L) accompanied by his Director of Audit Lamek Achika(C) and Parliament Liaison Raphael Ikame(R) give their responses to the National Assembly Public Accounts Committee at Parliament on Wednesday 18/05/16 on Eurobond. (PHOTO: BONIFACE OKENDO/ STANDARD)

The Auditor General wants to unravel the Sh250 billion Eurobond saga by grilling officials of seven foreign banks.

Those to be questioned are said to have been at the centre of Eurobond transactions.

Auditor General Edward Ouko told the National Assembly Public Accounts Committee (PAC) that his office has arranged trips to the financial institutions in Europe, America and the Middle East, which are said to have handled the billions that Government critics say never came into the country.

The banks targeted are JP Morgan Chase, Federal Reserve Bank, Qatar National Bank, ICBC Standard Bank, JP Security, Citi Transactional Service of New York and Barclays Bank.

"There is a lot of information circulating out there about the Eurobond, but I'm going to the originals. We need to go back to the people where the Eurobond accounts were opened and get all the details of the transactions that took place through the year," Mr Ouko said.

"...We have written to those people...We have missions lined up. It is important that we see them and get all the records while there."

He was appearing before PAC to explain delays in submitting the Eurobond report, months after the committee asked for it.

Although the sovereign bond was floated by the Jubilee government to fund infrastructural projects, critics say it turned into a symbol of corruption and Government mismanagement of public finances, with the Opposition claiming Sh173 billion of the proceeds cannot be accounted for. The Opposition challenged the Government to list the projects funded by the money, pointing to a hazy paper trail.

But Treasury has insisted all the money was accounted for, a position supported by the International Monetary Fund . The JP Morgan account was opened by the Central Bank of Kenya on behalf of the Treasury to receive the Eurobond proceeds. The money moved between the bank and the Federal Reserve Bank in New York before ending up in the Consolidated Fund, according to Treasury.

But Opposition leader Raila Odinga believes the money never came to Kenya and that most of the supporting documents provided by Treasury were fabricated. Ouko will trace this paper trail, in what he said would put the matter to rest. His first stop will be London and New York at the beginning of June. He will also seek information from various ministries regarding the receipt and use of the funds.

"I have hinged my investigations on finding out how the money was raised, moved and appropriated. We've had to go to the ministries to ask them what they spent it on and it came from. We will look at all the balances in the consolidated accounts and  hope to have a report by end of July," he said.