A move by the Sedgwick Kenya Insurance Brokers Limited challenge an award of a tender by Kenya Pipeline Company in court blew up their cover inviting police to investigate allegations of fraud.
This emerged after the insurance firm’s CEO Sammy Methu Kiragu died by suicide in his office.
Kiragu died after jumping from the seventh floor of his office at the 4th Avenue Towers on Fourh Ngong Avenue in Nairobi in an apparent suicide mission.
The incident on Tuesday March 11, 2025 in the afternoon, police said.
Police said they are investigating suicide.
Whereas the insurance brokers’ offices are on the 14th floor, witnesses said he took a lift to the seventh floor where he leapt to the ground floor in an apparent suicide.
He died on the spot.
Details show he was to record a statement over an ongoing probe where Sedgwick Kenya Insurance Brokers and UAP Old Mutual Insurance Company Limited have been accused of alleged fraud in a tender floated by KPC for the provision of Provision of Insurance Brokerage Services for a period of three years.
He was under probe in a Sh240 million tender at the Kenya Pipeline Company (KPC).
Kiragu was to appear before detectives from Directorate of Criminal Investigations’ Insurance Fraud Investigations Unit on March 12, 2025 for statement recording over an ongoing probe.
The Managing Director, KPC had on March 28, 2023 advertised the tender for the provision of insurance brokerage services in the local dailies.
At the end of the preliminary evaluation, Four M Insurance Brokers Limited and Sedgwick Kenya Insurance Brokers Limited’s bids along with 29 others were found to be responsive.
The two, together with 15 others were found responsive to the technical evaluation criteria and were eligible to proceed to the financial evaluation stage.
Sedgwick’s bid was evaluated as the lowest at this stage and they were on June 7, 2023 notified of being the successful tenderer.
By a letter dated June 21, 2023, the MD informed Sedgwick that it had been awarded three insurance policies.
Sedgwick accepted by a letter dated June 26, 2023.
Subsequently by a letter dated September 7, 2023 and sent to MD KPC, the applicant forwarded Old Mutual General Insurance Kenya Limited’s confirmation of cover for the subject tender as the underwriter..
In a twist of events, KPC instead awarded the tender to Four M Insurance Brokers Limited on September 7, 2023 and entered into contract with them on October 2, 2023.
Sedgwick then filed a request for review before the PPARB.
PPARB made its ruling on November 2, 2023 and inter alia ordered that the letter of award to Four M be nullified and set aside.
Four M thereafter instituted judicial review proceedings before the High Court at Nairobi on November 6, 2023, being Judicial Review Application No. E121 of 2023.
The High Court held, inter alia, that the Request for Review by the Sedgwick offended Section 167(1) of the Act and Regulation 203(2)(eKiii) of the Public Procurement and Asset Disposal Regula-tions.
It also ruled that Sedgwick lacked the requisite capacity to provide cover to KPC at the price they set in their bid document, and it sought to adjust/vary the price and qualifications that had been set out in the bid document after the event, which was an act of illegality for want of approval in accordance with Section 139(1(a) of the Act.
The High Court consequently granted an order of certiorari quashing the appellant’s decision and directed KPC to proceed with the implementation and performance of the contract dated October 2, 2023 entered into with Four M.
It was said that Sedgwick’s bid was tainted with illegality contrary to section 20 of the Insurance Act.
This is because their underwriter’s lead insurer is an international reinsurer not registered under the provisions of the Insurance Act.
Sedgwick’s underwriter, Swiss Reinsurance, informed KPC that it would only place cover on behalf of Sedgwick at $2,237,039 FY 2023/24 and $2.535,583 – FY 2024/2025, and that this was a clear expression on the part of Sedgwick that it lacked requisite capacity to provide cover to KPC, at the price set out in its bid document, and thus unable to enter into a contract as per its bid document.
The court also ruled that Sedgwick lacked the requisite capacity to provide cover to KPC at the price set out in its bid document and it was seeking to adjust the price and qualifications that had been set out in the bid document after the event.
This prompted police to move in and investigate the activities of the firm.
Investigators’ report indicates that Sedgwick Insurance Brokers and UAP Old Mutual Insurance Company Limited participated in the tendering process and Sedgwick Insurance Brokers Limited were evaluated as the lowest bidder hence winning the tender.
However, it was later established that they had colluded with UAP.
The detectives had launched investigations, DCI-Inquiry file number 185/2024, and already senior officials from the UAP had been grilled and their statements recorded.
The IFIU detectives had also summoned officials from Sedgwick to appear before them Wednesday a day before Kiragu died.
A letter from the Insurance Fraud Investigations Unit to Old Mutual revealed the ongoing probe.
Head of the unit Daniel Kandie had in a letter summoned those with knowledge on the tender and grilling was scheduled and rescheduled.
“This office is investigating an alleged case of Conspiracy and contravention of the Insurance Act in respect to the above mentioned subject, whereby Sedgwick Insurance Brokers and UAP Old Mutual Insurance Company Limited participated in the tendering process and Sedgwick Insurance Brokers Limited were evaluated as the lowest bidder hence winning the tender.”
“Our preliminary investigations have pointed out that, Sedgwick Insurance Brokers and UAP Old Mutual Insurance Company Limited had prior undertakings on how premiums could be adjusted to make a sum total of USD.1,911,755.66 to suit the market price.”
“In view of the above, we kindly but urgently request that UAP Old Mutual Insurance Company Limited to nominate a person conversant with the matter to appear before the Head of Insurance Fraud investigations Unit on Friday the 21st February, 2025 at 10.00 hours at our office for interview and statement recording,” the letter dated February 18, 2025 said in part.
The executives from Old Mutual recorded their statements and it was the turn for Sedgwick to do so.
Speculations are that this drove him to the suicide mission.
The company is yet to comment on the saga.
Police said the probe into the suicide incident is ongoing.
Police arrived at the scene and processed it before moving the body to mortuary pending autopsy.
Staff at the office were shocked to learn about the incident.
Sedgwick has in the past 40 years been providing insurance services to clients in public and private sectors.
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