Detectives from the Directorate of Criminal Investigations (DCI) have landed at City Hall to uncover loss of hundreds of millions of shillings paid to companies that never supplied ‘air’.
Through a letter dated July 21, the DCI boss Mohamed Amin through the head of Investigations Bureau at the DCI headquarters David Birech wrote to Nairobi governor Johnson Sakaja demanding a list of tender documents, requisitions by user department, award contracts, delivery and inspection reports and all local purchase orders issued to profiled nine companies believed to have been used to siphon the money.
According to the DCI, the nine listed firms are believed to have been used in a suspected money laundering scheme and fraudulent payments for services not rendered.
“This office is investigating a case of suspected money laundering in which Nairobi County Government is alleged to have fraudulently made payments to companies which did not render services.”
The letter from the DCI was addressed to the Nairobi County Secretary on July 24.
The nine companies include; Larsen Investment Company, Burasha General Suppliers Limited, Tweem Limited and Future Link Limited.
Others are Cloud Mobile Technologies Limited, AR Pharmaceuticals Limited, Instabul Investment Limited, Ramecon Engineering Limited and Brigit West Limited.
The DCI’s probe into the issue at City Hall comes a month after the Controller of Budget (CoB) Margaret Nyakang’o declined to approve Sh1.5billion expenditure requisitions they made to pay legal fees and development expenditure made without proper supportive documents.
The Nairobi county government leadership had planned to effect payments amounting to Sh2 billion controversially to 19 select law firms as pending bills without proper documentation.
Further, City Hall honchos made an additional clearance request of Sh379 million categorised as development expenditure of building and construction supplies claimed to be ‘air supply’.
“The schedule of 19 firms to be paid does not include the invoices’ dates; therefore, it is difficult to ascertain whether they are pending bills or related to works done and invoiced in the current financial year. Please, therefore, revise the schedule to include the date of the invoices and attached copies of the payment vouchers for the 19firms,” a correspondence by the CoB addressed to Sakaja through the Finance and Economic Planning County Executive Committee Member Charles Kerich reads in part.
Through a letter dated June 27, 2023, Ref: COB/NBI/001/171(11), Nyakang’o notes that the Nairobi county government did not provide the pending bills payment plan that would enable the matching of individual payees to the requisitions.
“Further, it is difficult to match the proposed payments with the pending bills report earlier presented to this office,” the CoB adds in part.
Sakaja’s administration made the twin requisitions vide letters referenced as Ref NRB/FIN/1/2824/2023 dated June 19, 2023 amounting to Sh562, 124,660 and Ref NRB/FIN/1/2825/2023 dated June 19, 2023 amounting to Sh509,152, 645.
Nyakang’o instructed the County Treasury to provide the basis for the legal fees, status of each court case including copies of judgement where applicable.
Also, the CoB’s office demanded a clear breakdown detailing the criteria used in the selection of the said payments, the recommended ‘first-in-first-out’ method used in identifying the bills and information on whether the proposed payment is a partial payment or a final payment to the legal firms.
The now abortive controversial payout had been blocked through a law suit filed by lawyer Clinton Mwale against the Nairobi County government as first respondent, Nairobi governor Sakaja as second respondent and Law Society of Kenya as an interested party.
Justice Lawrence Mugambi issued the directive.
Mwale filed the suit under the certificate of urgency through Mwale and Beitta Advocates.
According to documents filed in court, Sakaja’s administration owes various law firms more than Sh21 billion as pending bills as of January 2023.
While questioning the modality used to identify the law firms to be paid, the petitioner says that he has since learnt that the National Treasury is in the process of disbursing money to offset pending bills to Nairobi county and that a plot has been hatched to selectively pay a few law firms.
Mwale claims the law firms were handpicked through discrimination considering other firms numbering to 300 have equally provided legal services to the county.
According to documents filed in court, the profiled law firms cited and profiled as among those set to be paid include; Makallah Theuri & Company Advocates (Sh60 million), L.N Nyaribo & Company (Sh50 million), Okatch & Partners (70 million), Okubasu Munene & Kazungu Advocates (Sh30 million), Gikunda Miriti & Company (Sh67 million) and Masire & Mogusu (Sh27.5 million).
Others are; Anne Munene & Company (Sh34 million), Koceyo & Company Advocates (Sh43.8million), Roba & Associates (Sh51.8million), Ummi Bashir & Company Advocates (Sh32 million), J.W Wachira Advocates (Sh58 million), Momanyi and Associates (Sh91 million), Jamal Bake & Associates (Sh47 million) and Bespoke Insurance Brokers Limited (Sh28 million).
Additionally, Osoro Onyiego and Manyara Advocates (Sh30 million), Swanya and Company Advocates (Sh2.2 million), Arati and Company (2.15million), KO Advocates (Sh20 million), Moronge Advocates (Sh10 million) and Ojienda Co. Advocates (Sh5 million).
In March last year, the Nairobi County Assembly initiated probe into the controversial Sh595 million legal fees paid to several law firms at City Hall.
The inquiry by the Nairobi County Assembly Public Accounts Committee follows an audit query by the Auditor General into the county executive’s legal fees expenditure.
According to the audit report, the county government made large payments as legal fees to various firms that offered legal services to the county.
However, the report said, the county executive did not provide documents such as nature of disputes, approvals for procurement of professional services records, records of services rendered and contract agreements for audit review.
The law firms included Munikah and Co Advocates, Ataka Kimori and Okoth Advocates, Abdullahi and Co Advocates, Musyoki Mogaka and Co Advocates, Koceyo and Co Advocates, Kwanga Mboya and Co Advocates, and Magoro and Co Advocates.
In concurrence with the Auditor General, the Assembly directed that no further legal fees payments should be until comprehensive audit is done.