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Anti-graft boss Philip Kinisu questioned about NYS links

COUNTIES
By Paul Wafula and Cyrus Ombati | July 26th 2016
Ethics and Anti-Corruption Commission Chairman Phillip Kinisu (right) shakes hands with Kakamega Senator Boni Khalwale when he appeared before the Senate yesterday. (PHOTO: BONIFACE OKENDO/ STANDARD)

Anti-graft boss Philip Kinisu was yesterday questioned over payments made by the National Youth Service (NYS) to a company associated with his family.

Mr Kinisu, chairman of the Ethics and Anti-Corruption Commission (EACC) had been summoned to the Directorate of Criminal Investigations to record a statement on Esaki Ltd, which is run by his wife. The company won Government tenders worth millions of shillings.

Among the tenders under probe is the supply of goods to NYS and payments of over Sh791 million that authorities said were fraudulent. Kinisu was reportedly also asked to explain the tenders the company won at the Ministry of Health.

He arrived at the DCI compound with his lawyer, Wanyonyi Chebukati, at about 10am and left at 11.30am. He declined to talk to the media.

Kinisu was questioned by DCI Head of Investigations John Kariuki. He is said to have asked to be excused to join other EACC officials in Parliament to give a status of investigations into the ‘Chickengate’ scandal involving electoral officials. Sources said he would be summoned for more statements at a later stage. His wife is also expected to be questioned on the matter.

The decision to investigate Esaki Ltd was arrived at during a meeting at EACC on July 11, 2016, after preliminary investigations disclosed that the company had transacted with NYS at a time when the institution was being investigated over the Sh791 million saga.

The Director of Public Prosecutions, in his letter dated July 15 and addressed to the DCI, advised that the appropriate way forward was for the allegations to be investigated by a joint team comprising the DCI, Asset Recovery and Kenya Revenue Authority under a multi-agency framework.

Kinisu confirmed that Esaki was paid Sh35 million by the NYS and not Sh281 million. Through his lawyer, he said his company had only been paid Sh35 million by the Health ministry since 2013 and that the other amounts were from other customers.

“No such payment has ever been made to Esaki Ltd by the Devolution ministry,” he said through his lawyer. Last week, it was alleged that the company had received a total of Sh281 million from the Devolution ministry, with payments made as recently as last month. A payment ledger seen by The Standard showed that Esaki was paid Sh89 million on June 16.

Between March last year and June this year, the company had received a total of Sh246 million from the Devolution ministry. This excludes the Sh35 million received in 2014.

Mr Chebukati said his client was not fighting any money laundering claims, adding that no such money was paid from the ministry to the company.

Sales revenue

According to the firm, it had sales revenues of Sh14.4 million in 2013, none of which came from NYS or the Devolution ministry. In 2014, Esaki made sales of Sh42.2 million out of which Sh32.3 million was received from the ministry.

Last year, the firm says, it only received Sh3 million from the Devolution ministry out of its sales revenue of Sh166 million. It said the remaining Sh163 million was received from other customers, which it did not name.

In his breakdown, Chebukati said this year, the firm has made Sh89.9 million so far but none of it was from the Devolution ministry. In total, since January 2013, the company has made Sh312.9 million in sales revenue, out of which only Sh35.4 million was from the ministry.

The remaining Sh277 million, according to the firm, was from “other customers”.

The anti-corruption boss defended the fact that his firm did business with NYS, dismissing any conflict of interest allegations on grounds that he supplied the borehole materials to NYSlong before he was named the EACC chairman.

“The company was established and has lawfully been doing business since 2000 with both the Government and private sector clients. I have been a director in it since inception until April, 2016, when I ceased to be a director on account of my commitments at EACC,” he told reporters at a press conference in Nairobi.

He also responded to money-laundering claims against the African Population and Health Research Center (APHRC), a non-profit research corporation, where he is also the chairman. He joined the board of APHRC in April 2013 and became the chairman in November 2015, two months before he took up the job at EACC.

It is alleged that a preliminary report done by the NGO Co-ordination Board had recommended that the centre be investigated for money laundering, non-compliance with Government regulations and lack of accounting for donor funds.

“All the centre’s funds have been audited by internationally acclaimed auditors since inception and there are no queries,” he said. He accused the media of being ‘angels of the devil’ for siding with his accusers.

The EACC chairman has also accused Bunge la Wananchi, a civil society group, of being behind his woes after he turned down their invitation to “negotiate”. Bunge la Wananchi allegedly wrote to his company in May 2016 requesting information on various allegations.

“After several unsuccessful attempts to obtain information and in the words of their SMS message, ‘awaiting honest negotiations’, they re-addressed and delivered the letter to EACC,” he said. The EACC Chief Executive, Waqo Halakhe, alerted him when the allegations were forwarded to the institution.

Three activists working with Bunge la Mwananchi were last week grilled by the DCI. They provided the DCI with documents on the tenders.

Kinisu said he took office as EACC chairman on January 2016. “Before that, I had a professional career lasting 35 years and over that period to date, I have also held and still hold investments such as the one in Esaki Ltd, a family-owned company,” he said. He described four instances to explain why he believed cartels were targeting him.

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