The National Hospital Insurance Fund (NHIF) paid Sh3 million to a non-existent health service provider in 2012.
This was revealed in a case where NHIF has been sued for failing to pay Sh9 million to a firm; formed by its senior manager Joab Indeche and his wife Maureen Malo.
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Mr Indeche had clinched a contract to offer outpatient services to civil servants for a year using St Lavina Medical and Laboratory Services.
The company had been paid three times.
When it raised a red flag, the couple allegedly hurriedly converted the business into a limited liability company, named it St Lavina Medical and Laboratory Limited, sold it to another person and resigned as directors.
But court judgement by Justice Francis Gikonyo reads that Malo remained as the signatory of the firm, meaning she had not resigned as it had been alleged.
“His wife signed the contract despite pretence that the two had resigned from the firm. The evidence show that both were quite instrumental figures and the controlling minds in all transactions from inception, and up to the incorporation of the plaintiff," the judge noted.
He noted that the move to incorporate a limited liability company was a plot by Indeche to conceal his footprints, and continue trading with his employer.