Connect with us

Investigations

Alarm Raised Over Steady Looting at East Africa Development Bank By DG Vivienne Yeda Apopo

Published

on

EADB DG, Vivienne Apopo

EADB DG, Vivienne Apopo

Refer to the whistle blower report we published previously regarding the scandals at the East African Development Bank and the call to request the Director General Vivienne Yeda to step aside after 7 years of oppressive leadership at the Bank. Following the whistle Blowers dossier received by board members early June, Senior managers met with the Board members on the 15th July 2016 and were able to substantiate with evidence the details published about Vivienne Yeda, the Director General of EADB as true.

Despite the board members receiving collaborative evidence that what was written about Vivienne Yeda was the truth, Vivienne has been left to continue with her work as if nothing happened. More shocking details have emerged on how Vivienne Yeda has misappropriated the Bank funds in a number of ways as we shall explain in this article. Staff members are calling on the member states of the East African Development Bank including Kenya, Rwanda, Uganda and Tanzania, to commission their respective auditor general’s offices to carry out an investigation on the actions of Vivienne Yeda and how she has squandered tax payer’s money. That she should be asked to step aside for the period of the investigations in order not to interfere with the investigations team. Despite the board members confirming the shocking revelations as true, they have done nothing to interdict her. You will know why no action has been taken in this article.

During the interview between the senior managers and the board members, the Directors were shocked to hear that staff never receive end of year bonuses even when the board has annually approved a budget of USD 65,000 annually for staff end of year bonuses. Vivienne has been drawing the entire USD 65,000 which ends up on her personal account. She normally channels such monies through the staff payroll which is managed by Deloitte to her personal account.

Such money is usually transferred to her account either at end of the year or beginning of the year. Investigations can be carried out at Deloitte to confirm the staff salary figures sent to them during these periods starting 2013/2014, 2014/2015 and 2014/2015. Staff members are still in shock that the Director General has been embezzling money meant for staff bonuses. Vivienne has also negotiated her salary increment with the board twice during her 7 years tenor at the helm of the Bank. The board approved both increments; one in the middle of her first five years and the second at the time when she was renewing her contract. Much as the board was shocked to learn that it’s only her who gets salary increments at the Bank.

The fact that she is the DG, Head of legal and Company secretary, she normally alters board minutes to indicate that he salary increment was to take effect one year back for the first increment and a couple of months back for the second increment. Looking at the staff payroll for the periods when her salary was increased, one would notice large sums of money which were channeled through the payroll to her account. Other such dubious payments have been taken out of the Bank to her account through the payroll. She uses the staff payroll to channel funds to her account because she knows the payroll is never scrutinized.

The former finance manager who resigned at the end of May this year was never allowed to look at the payroll because he would question such payments. We doubt that the board would approve bonuses and salary increments to only one person in the Bank. Red peppernews paper in Uganda and as per the whistle blower dozzier, informed you in their article of 13th July 2016 that staff don’t receive any form of motivation either through training and career enhancement or travel and exposure even when funds have been set aside for these purposes.

We confirm that unlike other previuos Director Generals, the Bank pays Vivienne both the profident fund, which she recieves annually and contributes towards her pension which she is supposed to receive when she leaves the services of the Bank. The annual provident fund payment is usually made directly to her account through the Bank’s SWIFT payment system and this appears in the general legder. The USD 65,000 mentioned above can not be her provident fund since it is paid out through the staff payroll. Towards the end of July 2016 even after the board had sat to discuss the whistle blowers report, she went a head to request HR to pay her pension through the end of July staff payroll. Pension is supposed to be paid when a staff member has left the services of the Bank.

But she wanted her pension paid out with the July salary. But after HR had consulted with the senior advisor to the DG, Mr. George Aaron, they declined to pay the pension to her because this would have been iregular. During last year, Vivienne requested finance department to pay her USD 175,000 calling it pension/provident fund in arrears which is fradulent. The finance department declined to pay the money to her account because she failed to provide clear documentation for the money. This needs to be investigated.
In 2014, the Bank was rated by AADFI as the best DFI in Africa.

This was after she had bribed the rating team to give her the top position. Much as one could say, this was good for the Bank’s image,it is not sustainable. The image of the Bank should be enhanced by improving gorvernance, systems, policies and structures in the Bank. At most, the rating agencies coud have been bribed when she is also doing much to improve the Bank. But this has not happened.

She has boosted of posting profits for the Bank, but this is all not true. A lot can be discovered in this area but we shall bring out on example when she has fradulently reported profits which is not real. The Bank is supposed to value all its assets annually and the valuation figures taken into consideration when reporting profits. The high the value of assets the higher the profits reports. Recently a firm was hired to value the Bank assets in Kenya, Uganda and Tanzania. The firm carried out the valuatioin exercise in all the three countries and submitted the reports to the Bank. She was okay with the value of assets in Kenya and Uganda. Because the Bank’s assets in Tanzania returned a lower real market value than she had hoped for, she asked the firm to inflate the figures of the value of assets in Tanzania, but the firm refused. she instead hired another firm which re-valued the assets in Tanzania to give them a value of her choice.

Related Content:  Kenya’s Rotten Civil Society Exposed

If she had used the real market value as reported by the first firm, it would have reduced the amount of profits reported. But the fact that the second firm hired agreed to her demands, they reported a value which she wanted, and as thus, this helped her to report an increased amount of profits. The Bank money twice for the same service and the results of the assignment were compromised. In the June dossier, we reported that she reported a wrong Non-performing loans percentage to the board of 0.83% instead of 5% during the end of Feb 2016 boarding meeting held in Nairobi. This was to avoid reporting on some Kenyan projects like DARI, Abarderes and Benvar Estates which were non-performing.

Non-performing loans are supposed to be provided for and if the mentioned projects had been reported and provided for, they would erode most of the profits she was reporting to the board. These two examples show Vivienne has been reporting fraudulent profits to the board to give them the impression that the Bank is performing well, when its actually not performing that much and not growing at the same time. This is fraudulent and false reporting to the board and should be investigated and stopped. So many other lies have been told to the board. Believe it or not, this is not sustainable.

NEW YORK, NY - SEPTEMBER 22: Director General of East African Development Bank Vivienne Yeda speaks during the 30th Annual Awards Gala hosted by The Africa-America Institute at Gotham Hall on September 22, 2014 in New York City. (Photo by Bennett Raglin/Getty Images for The African-American Institute)

NEW YORK, NY – SEPTEMBER 22: Director General of East African Development Bank Vivienne Yeda speaks during the 30th Annual Awards Gala hosted by The Africa-America Institute at Gotham Hall on September 22, 2014 in New York City. (Photo by Bennett Raglin/Getty Images for The African-American Institute)

During the board which sat on the 14th July 2016, Vivienne falsified the portfolio report on the number and amount of projects approved and disbursed between January to July 2016. She reported some of the projects which were approved and disbursed in Q4 of 2015 as projects which were approved and disbursed in 2016 to confuse the board members since the previous dozzier had reported that only two projects had been approved for the entire bank between Jan to June 2016. All these lies are to show the board that she is performing when in real sense there are huge issues within the Bank. This can be verified with the Portfolio management unit in Bank, the chief internal auditor and the finance manager.

Board members were also shocked to learn that renovation of the Head office building on plot 4 Nile avenue cost the Bank (and the tax payer of East Africa) USD 6.6 million. The board did not know that the cost had escalated to this level because she did not seek board approval for the entire sum in one go. She presented the renovations budgets to the board in piecemeal. We believe USD 6.6 million could have put up a brand new building the size of the EADB head office and more. Of concern is that the contractors and the project managers who implemented the renovations were single sourced and the contracts negotiated and approved by herself. She has deliberately refused to put in place a procurement committee and at the same time the bank does not have a procurement expert to support these very expensive procurement contracts. We request that an audit in the processes and procedures of procuring and negotiating the renovations contract be investigated.

Experts can be called in to value the cost of the renovations to confirm that the work actually cost USD 6.6 million and that there was value for tax payers money. The renovations have gone on since 2012 until todate. The fact that the implementation team comprised her friends (project managers and architects who were handpicked from Kenya using a single sourcing method to manage the project), we believe the value of the contracts was inflated so as to give her kickbacks.

The same project managers and architects have been building a hotel and apartments for her in one of the national parks in Kenya which has just been completed. The construction of her hotel and apartments progressed at the same time with the office renovations and it is believed that money for some of the inflated office renovation bills went to her hotel construction.

Another building that has been renovated by the Bank whose renovation costs, value for money and the procedures followed to procure the service providers are being challenged, is a block of apartments commonly referred to as “block 4” in Naguru. The cost of USD 6.6 million mentioned above does not include the renovation costs for this block of apartments. This should also be investigated.

Senior managers have been shocked to hear that the information they provided to the board members confirming the allegations, even after the board chairman had assured managers that they were protected and therefore should not fear to say the truth, has licked to Vivienne including which manager mentioned what. Managers wonder why the board went on to ask the senior managers to expose themselves by revealing the truth, if they knew they were not going to take any action.

The result of this has exposed some managers to harassment and threats from Vivienne and her machinery. Some of these managers have received threatening phone calls indicating that something bad will happen to them and their families if they don’t stop revealing information about Vivienne Yeda.
The first whistle blower report and the red pepper article of 13th July reported that 99% of all international travels at the Bank are undertaken by Vivienne Yeda alone.

An analysis carried on the costs associated with her travels between 2013 and to date reveal that she spends not less than USD 135,000 per year on her travel related costs alone. This is a lot of money and therefore value for this money needs to be investigated.

As per the whistle blowers reported published in red pepper on the 13th July 2016, Vivienne Yeda refused to hire staff to fill all key vacant positions in the Bank and therefore heavily relies on the use of very expensive consultants who have cost the Bank a lot of money with no value for money. The Bank has a legal department with no lawyers at all. She single handedly sourced an international law firm called “Eversheds” based in London who have been doing the day to day legal work at the Bank. This law firm has todate cost the Bank USD 1.2 million to do work which would have ordinarily been done by the staff members in the legal department.

Related Content:  Burial of Truth As DCI Muhoro Recommends Public Inquest into Jacob Juma Murder

These colossal sums have been spent without a formal contract between EADB and Eversheds, (Atleast no staff member has seen the contract and the terms of engagement including the finance department that is always forced to prepare payments for such expenses. Noformal procurement procedures were followed and most importantly there is not value for money for the work this law firm has been hired to do for the Bank. It also emerged that Vivienne Yeda’s daughter who has been pursuing her studies in the UK worked at this law firm, raising question marks on the possible conflict of interest in giving this law firm huge sums of money. The work of eversheds, the procurement process and value for money should also be investigated.

The Bank received grants worth over USD 3 million from AfDB, DEG and KfW for various capacity building activities at the Bank. That fact that the Bank does not have a procurement committee and a procurement specialist; it becomes questionable how these huge contracts have been selected and awarded. Though for some grants especially from AfDB, the AfDB team got involved in the procurement of consultants though she still wanted to be fraudulent about the process. The fact that Vivienne Yeda single handedly approves the final bidders, to whom these consultancy contracts are awarded, raises several question marks. Some of the contracts cost over USD 900,000 per single consultancy contract.

The fact that key staff positions at the Bank are vacant due to the fact that several senior staff members have resigned because they could not continue working under such conditions. The capacity building interventions will not benefit the Bank much. For the Bank of less than 70 staff members, about 44 staff have resigned since 2012 todate. The systems and policies/operating guidelines being introduced in the Bank don’t add much value when the key users are not in their positions. In a letter written by African Development Bank after an audit they carried out at EADB in April 2016.

The report was addressed to Vivienne Yeda and signed by the Manager Portfolio Management Division atAfDB. The letter reads in part as an example “despite AfDB having given EADB guidance on procurement process for a credit cycle management consultancy firm, to undertake a credit management cycle documentation consultancy assignment at the Bank, Vivienne Yeda’s choice of the consulting firm to be selected was a Kenyan firm charging over USD 800,000 almost three times the price of the next candidate who charged below 300,000”. In AfDB’s opinion after reviewing the technical proposals and credentials of the other firms, the other two consultancy firms that had applied for the consultancy work were also well qualified to deliver the consultancy based on the terms of reference provided. It is possible that these consultancy contracts are inflated and the consultancy firms selected end up giving hefty kick backs to Vivienne Yeda. Most of the contracts with consultants and other service provider have been determined in this manner.

The African Development Bank audit report about EADB further reads in part, we quote “the AfDB officers who carried out the audit noted that, there were several bleaches regarding operational limits in treasury, bleaches in procurement guidelines, and non-compliance of policy in relation to credit approval of some of the high value transactions’. The report further read that “Management committee is effectively made of only the Director General (Vivienne Yeda) which we believe does not conform to best practice and does not exhibit good corporate governance”. These revelations make any one wonder why audit firms like KPMG who carries out quarterly audits at the bank for hefty sums of money have not been able to flag these weaknesses.

The Bank has an internal audit department, but the fact that they have been very critical of how Vivienne conducts bank business (they have reported to the board several times despite the board not taking any serious actions), she chose to frustrate them by not bothering about their reports. She instead chose to duplicate their role by hiring KPMG to carry out quarterly audit reviews at the Bank. Despite the fact that KPMG’s reports indicate that there are no issues at all at the Bank, they have cost the Bank and the tax payers money USD 382,000. We believe she retained KPMG to cover up her loot and since KPMG is looked at as a credible audit firm, the board members would not question their reports but also dismiss the issues raised by the internal audit. The annual financial audit is carried out by PWC, much as we are surprised that they have also not been able to raise a red flag (not even noticing that lots of money is chanelled through Vivienne Yeda’s account through the payroll, among other flaws) of the appalling situation at the Bank.

Vivienne Apopo signing a deal

Vivienne Apopo signing a deal

When the whistle blower report which red pepper published on the 13th July 2016 first came out, Vivienne Yeda hired KPMG Kenya to come and investigate the source of the whistle blower dossier. It was surprising to see that a firm of KPMG’s caliber could accept to investigate the origin of the report as opposed to investigating the facts contained in the report. We believe they have been compromised by money. KPMG came into the EADB offices on the night of 23rd June 2016 in the absence of staff members and hacked into computers of all staff members to try and find out who might have originated the dossier but also to try and delete some of the documents that might be incriminating to Ms. Yeda. The fact that they copied information from hard discs of all staff computers, it is evident that all bank information is now in the hands of those individuals who took the information under the directive of Vivienne Yeda. KPMG went ahead to isolate some managers who were interrogated on 4th July 2016 and their statements recorded to try and find the originator of the dossier. KPMG Kenya has issued an invoice for USD 22,000 to be paid by the Bank (without any engagement letter and terms of reference) for investigating the whistle blower. This is not acceptable. She has hired full times services of an ex-police detective (a one Egessa) to try and investigate staff in efforts to identify the person who originated the dossier. This police detective together with one of the law firms which the Bank uses regularly have helped her to file a complaint which she has taken to Interpol asking them to give her additional protection (in disguise that her life is in danger) but also to give her permission to get staff phone records and also tap staff phone conversations.

Related Content:  Kenya's Peculiarity: Koffi Olomide Deported, Ruto's Pilot Is Back In The Air #WhatAboutWenjie

This is not acceptable. She has hired full times services of an ex-police detective (a one Egessa) to try and investigate staff in efforts to identify the person who originated the dossier. This police detective together with one of the law firms which the Bank uses regularly have helped her to file a complaint which she has taken to Interpol asking them to give her additional protection (in disguise that her life is in danger) but also to give her permission to get staff phone records and also tap staff phone conversations.

The ex-police detective moves around office with a tape recorder recording staff conversation.
The reason it is being proposed that each EADB member state should commission their auditor general’s office to investigate the massive abuse of office and misuse of tax payers money at the regional Bank is that, each member state (Kenya, Rwanda, Uganda and Tanzania) contribute USD 4.5 million annually as their capital contribution towards the lending activities of the Bank. In other words, Yeda has at her disposal USD 18 million contributed annually by the member states from tax payers money in the hope that the Bank would lend out the money to befitting projects to promote social economic development among the member states.Seeing how the board has chosen to protect someone who is using tax payer’s money in this manner, one wonders why the governments should not channel this money in other useful projects if the Bank cannot get good leadership to enhance the mandate of the Bank. EADB should have been much bigger and visible that it is today if the Board had agreed to change the top leadership at the Bank.

This article reveals some shocking details as to why, despite all the information out there concerning Yeda’s abuse of power and office, she has remained in her office intact and untouchable. The Board members received the whistle blower dossier at the beginning of June 2016 as confirmed by Mr. Muhakanizi during the red pepper interview leading to the publication of 13th July 2016. The same was also confirmed by the chairman of the board on the 15th July 2016 when meeting senior managers of the Bank.

Anyone reading this would have expected the board to have taken immediate action (asking Vivienne to step aside for investigations jointly commissioned by the Bank member states to take place) but this has not happened. Usually under such circumstances, the board would convene urgently to hear from both sides, which they did (board sat one and a half months after they received the report). The board would recommend to the Governing Council of the Bank which comprises of the Ministers of Finance of the Bank Member states who have the powers to sack the Director General according to the charter that governs the Bank. 75% of the Governing board members must vote to sack her if she is to be fired.

Two weeks after the board confirming the allegations, the Director General is still going on with her work at the Bank as usual, and renovations and hiring of consultants is still going on. This procedure should naturally not apply under situations where it is clear that Bank funds have been misappropriated? Is has emerged that the board has remained divided on whether they recommend to terminate her contract or not. As opposed to normal practices in other financial institutions, EADB Board members are allowed to borrow from their own Bank (purely against good corporate governance practices). As earlier reported by the whistle blower and published in the 13th July red pepper, EADB board members borrow hefty sums of money from the Bank to run their personal businesses. Much as Mr. Muhakanizi in his interview with red pepper denied any board member applying for any loans from the Bank, we confirm that, in 2014 the Bank approved a loan of USD 4 million to Mr. Muhakanizi through a real estatescompany called Reunion Estates Ltd. The Bank approved a loan of USD 500,000 for another board member from Kenya called Mr. Francis Karuiru through his company “Edron Communications Ltd’ based in Kenya. Because of the above, board members have been compromised and therefore don’t want to make a firm recommendation to terminate the services of the mighty Yeda.

This being tax payers money, we call upon Governments to take action. The Ministers also don’t get detailed information from board members (who are their permanent secretaries) regarding the affairs at the Bank because of their vested interests which is purely a conflict of interest.
We also report that the Bank, its staff and assets are protected under diplomatic immunity. This means that Yeda and the Bank cannot be sued in local courts of law. This could also explain why she also went against the laws of the EAC member states that protects whistle blowers setting clear procedures to be followed when a whistle blower report comes out. It’s because of this immunity that she has had easy access to Interpol to start investigating who the author of the dossier could be so that the author is punished instead of the accused. A cover letter forwarding the whistle blowers report to the IGG and requesting them to launch an investigation into the abuse of office is attached to this dozzier, but because of the Bank’s immunity, it seems the IGG’s office lacks the Mandate to investigate the Director General.

We believe the immunity status was among others aimed at protecting the Bank and the tax payer’s money. Right now, the Bank’s diplomatic immunity is being used to protect an individual who has abused tax payer’s money. The rights of staff members are being infringed upon the fact that their phone conversations are being tapped; their phone records have been printed and investigated. These staff members are innocent and suffering because one person has bribed her way into impunity.

The auditor General offices among the Bank member states are called upon to investigate the allegations so that Vivienne can account for her actions. This will help retsorestability and growth at this regional Bank.


Kenya Insights allows guest blogging, if you want to be published on Kenya’s most authoritative and accurate blog, have an expose, news, story angles, human interest stories, drop us an email on tips.kenyainsights@gmail.com or via Telegram

Kenya West is a trained investigative independent journalist and a socio-political commentator on matters Kenya and Africa. Do you have a story, Scandal you want me to write on? Send me tips to [in.kenyawest@protonmail.com]

Advertisement
Advertisement

Most Popular