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Corporate Fraud

EACC to Investigate Deputy governor Over Contract Inflated 50 Fold

The National Assembly’s Public Investments Committee (PIC) chaired by Mvita MP Abdulswamad Nassir has directed the Ethics and Anti-Corruption Authority (EACC) to investigate currently Kericho deputy governor Susan Kikwai for her role in the overpayment of Sh10.6 million in a deal that was paid nearly 50 fold above the contract sum.

Parliament has recommended that Ms. Kikwai, former Kenya Investment Authority (KenInvest), be surcharged over the payments that arose from her failure to settle a paltry Sh217,152 9 years ago for a consultancy service for the development of an investment policy framework.

Kikwai is accused of occasioning the loss of millions due to her negligence in okaying the contract that had a detrimental clause on it.

The delayed payment led to the consultancy fees attracting a monthly interest penalty of 3pc, forcing the investment agency to pay a whooping Sh10.6 million in the end.

“The variation in amount was caused by a clause in the contract for the services which provided for a simple interest of 3pc per day on delayed payments,” PIC observed.

PIC stated that Ms. Kikwai also delayed issuing instructions to lawyers on the next cause of action even after KenInvest was reminded that the interest was accruing. Thereafter, She made payment to a consulting firm in the financial year 2014/15 and 2015/16 worth Sh6,671,718 being accrued interest and legal fees and another Sh4 million late.

“The supplier took the matter to court and was awarded an amount of Sh6,316,581, which attracted an interest of Sh55,137 on May 10, 2015, Sh 300,000 billed in respect of auctioneers and further Sh2, 884,259 paid as the final settlement of the case, all totaling Sh9,200,840, which excludes Sh 696,000 legal fees by the Authority’s contracted lawyers,” Documents earlier tabled in parliament show

“Further, there was delay on the part of the Authority in issuing instructions to its lawyers on the next cause of action after being reminded that the interest was accruing hence total bill escalated to Sh 10,251,977. The Authority also failed to heed the advice of its lawyers that an appeal of the case was bound to fail on June 18, 2013 and further advice from Attorney General on October 11 2013.”

PIC wants the EACC to “investigate the former head and prosecute her if found culpable.”

According to a parliamentary report, interest payments for project delays and late payment of claims are draining taxpayers of billions of shillings.

Nassir restated that accounting officers and boards of state corporations must strive to honor their contractual obligations and settle claims as and when they fall due.

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