Chinese company Erdemann Properties Ltd is now the focus of Ethics and Anti-Corruption Commission (EACC) after it emerged that it could have been fraudulently awarded the tender to construct Lake Basin Mall by the Lake Basin Development Authority (LBDA).
In new revelations, it is said that the Ksh2 billion mall could have cost less, but the appetite for kickbacks and bribes by LBDA officials made it higher.
Former LBDA board members George Nichodemus and Innocent Obiri are the key suspects in the scandal, who are suspected to have benefited from cash and houses in order to influence the tender award to Erdemann Properties.
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It is alleged that Mr Nichodemus received Ksh12.4 million in two instalments on May 2 and December 11, 2013 while Mr Obiri received Ksh2.3 million on May 2, 2013.
“The contractual sum was unlawfully inflated, with the Mr Yang’s and Mr Zhang’s company failing in crucial stages but was, nevertheless, awarded the contract after unduly influencing the board members. Contrary to the applicants’ averments that the project was passed by the Attorney-General, the Attorney-General’s legal opinion dated December 5, 2016 revealed several irregularities in the award and execution of the tender,” EACC told the court.
“The cost of construction was inflated to take care of the gifts given to the board members by Erdermann inter alia; houses and money which induced the board to disregard necessary procurement procedures.”
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Erdemann directors Zeyun Yang and Zhang Jing have already moved in court to seek anticipatory bail, even as EACC sleuths nose in to arrest the suspects. However, High Court Judge James Onyiego dismissed the application saying that arresting the two Chinese nationals will not violate their rights.
On July 4, EACC raided the houses of the two directors and collected several items that will constitute evidence against the officials.
Kisumu County Assembly Speaker Onyango Oloo is also accused of having been awarded a house in Athi River as a kickback.
The cost of the tender is thought to have been inflated by over Ksh1.2 billion.
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