Kenya Insights

Author: Kenya Insights Team

  • How Journalists Are Being Muzzled By The Exploitation Of A US Law

    How Journalists Are Being Muzzled By The Exploitation Of A US Law

    Journalists have been forced to temporarily take down articles critical of powerful oil lobbyists due to the exploitation of US copyright law, according to a new report.

    At least five such articles have been subject to fake copyright claims, including one by the respected South African newspaper Mail & Guardian, according to the Organized Crime and Corruption Reporting Project (OCCRP).

    The claims – which falsely assert ownership of the stories – have been made by mystery individuals under the US Digital Millennium Copyright Act (DMCA), a law meant to protect copyright holders.

    Just last month, three separate false copyright claims were made against Diario Rombe, an investigative news outlet that focusses on Equatorial Guinea.

    The articles under attack are about the president of Equatorial Guinea’s son, Gabriel Mbaga Obiang Lima, and his close associate, Cameroonian businessman and lawyer NJ Ayuk.

    The OCCRP claimed in a report published on Wednesday that the DMCA process was often abused by “unknown parties” who create backdated fake articles to target critical news reports.

    Under the US law, any online author saying that their content has been stolen can seek to have what they claim is the infringing material “taken down” by triggering a formal legal process through web servers who host the material.

    The process differs depending on the server provider, but it can mean content is removed from the web for weeks while the genuine author proves their credentials.

    The OCCRP is yet to discover who is behind the attacks, however all the stories were critical of NJ Ayuk.

    NJ Ayuk, also known as Njock Ayuk Eyong, is the CEO of African law firm Centurion Law Group and the founder of the African Energy Chamber (AEC). He is also an outspoken advocate of the oil industry in Africa.

    Mr Ayuk has a close relationship with the other subject of two of the stories, Gabriel Mbaga Obiang Lima. Mr Obiang Lima was Equatorial Guinea’s Minister of Mines and Hydrocarbons until a recent cabinet reshuffle.

    Gabriel Mgeba Obiang Lima is the son of Equatorial Guinea’s president
    Image: VLADIMIR SIMICEK/BBC

    Mr Ayuk has issued press releases from Centurion Law Group and the AEC which publicly attack journalists criticising his oil lobbying activities and questioning his close relationship with Mr Obiang Lima.

    The first known false copyright claim to target reports on Mr Ayuk was made in 2019, following the publication of an article in South Africa’s Mail & Guardian (M&G) titled Fraudster named in SA’s oil deal.

    The story examined Mr Ayuk’s involvement in an oil deal between South Africa and South Sudan worth hundreds of millions of dollars. It revealed that Mr Ayuk was convicted of fraud in the US in 2007 after pleading guilty to illegally using the stationery and signature stamp of a congressman to obtain visas for fellow Cameroonians.

    After the story was published, the M&G’s web server Linode was contacted by an “Ian Simpson”, claiming he was the original author of the piece. Linode took down the news outlet’s entire website for a morning in response to the complaint.

    M&G investigated and found that the US address given did not exist and that there were no other traces online of this alleged author. M&G concluded that “Simpson” and his article were fakes but Linode forced the newspaper to take down its article about Mr Ayuk before it would restore the rest of the M&G website.

    Writing about the takedown, the M&G called this a “censorship attack”.

    Last November during the UN’s climate summit COP27, UK-based Climate Home News published an article about Mr Ayuk launching a partnership with two UN agencies called UN gives platform to convicted fraudster lobbying for African gas.

    A copy of Climate Home News’ article appeared on Tumblr. Mr Ayuk denies corruption allegations.
    Image: BBC

    The article highlighted the role of the African Energy Chamber in the UN’s flagship Team Energy Africa private investments initiative and referenced Mr Ayuk’s US fraud conviction.

    The UN cancelled the initiative following the publication.

    Two weeks later, Climate Home News’ server AWS received copyright claims on both articles from “Thomas L Pierce” and “Marcus A Webre”. The OCCRP was unable to trace the complainants, and emails to their provided addresses went unanswered.

    AWS told Climate Home that it might have to take action against Climate Home News unless it could confirm that the matter had been successfully addressed.

    Climate Home editor Megan Darby removed the articles while addressing the false claims with AWS. It took several weeks before Climate Home was able to reinstate the articles.

    Ms Darby told the OCCRP: “These bogus allegations look like a devious tactic to suppress independent journalism.”

    Earlier this year, unknown parties filed three complaints against independent investigative outlet Diario Rombe over articles authored by them. Two were with its server Cloudflare and one with Google. They targeted two 2021 articles published in collaboration with OCCRP which were critical of Mr Ayuk and his relationship with Mr Obiang Lima.

    The original article was in Spanish
    Image: BBC
    Image: BBC

    All three complaints appear to have originated from South Africa. The OCCRP said that it could not establish whether the purported claimants “Lavino Siqueira” and “Mark E Bailey” were real people, and again, emails to their addresses went unanswered.

    Google removed the second article from its search results. It reinstated the piece only after Diario Rombe filed a so-called “counter-notice”.

    Diario Rombe editor Delfin Mocache Massoko said: “These copyright complaints for a small outlet without funds like Diario Rombe do huge damage to our work. I believe that the author has a single mission, to eliminate all negative information about Mr Ayuk and Lima from the internet.”

    When contacted by the BBC, Mr Ayuk strongly denied corruption allegations and said he, the AEC and Centurion Law Group denied the allegations made by the OCCRP including in relation to fake copyright claims.

    Gabriel Mgeba Obiang Lima did not respond to requests for comment at time of publication.

    The OCCRP contacted AWS, Google and Cloudflare for comment on the bogus copyright complaints, but they did not respond.

  • TOO BIG TO FAIL? Is Safaricom’s Leadership A Danger To The Country

    TOO BIG TO FAIL? Is Safaricom’s Leadership A Danger To The Country

    In March last year, Safaricom Ethiopia tweeted out an interesting claim: that 50% of Kenya’s GDP is processed through their M-Pesa ecosystem. This was no idle claim, either: Safaricom’s mobile money platform has transformed the way business is done in Kenya and around the developing world. Within Kenya and the region, its integration into the economy has been massively disruptive and transformative. Before M-Pesa, millions of Kenyans were unbanked, with the banks totally uninterested in doing any business with the average Kenyan. In one illuminating incident, several large banks colluded to close their upcountry branches in unison, claiming the locals did not have the amount of business that could justify keeping the branches open.

    All this changed, of course, when M-Pesa launched, and the unprecedented revolution that the mobile money service has midwifed is one that has seen Kenya’s mobile technology and financial services rocket to the top of the world. The previously unbanked now have a bank account on their mobile phones, and the previously stuff banks have been forced to eat humble pie as nimbler competitors integrated with M-Pesa and the copycat money transfer services it spawned. Virtually every business in Kenya today that has any type of payment system offers an M-Pesa payment option. And while the West is currently debating the merits and challenges of digital currencies, Kenya and most of East Africa has already cut back significantly on the need for physical money: the majority of transactions in the country today involve M-Pesa or other mobile money exchanges, with few people ever bothering to actually handle physical cash.

    Safaricom was able to move so fast with M-Pesa because Kenyan regulators allowed it room to grow without burdening it with onerous compliance requirements. The pent-up demand for such financial services was massive, and even with the odd hiccup along the way, the service was effective in a cannot-fail position, as Kenyans killed the proverbial two birds with the same stone: the same Kenyans who were unbanked had also been denied affordable telecommunications services, so mobile phone services had been snapped up by everyone in the country, creating a ready market for when M-Pesa came along. The resultant growth of the service was probably unprecedented anywhere in the world, and in the process the regulators went to sleep and allowed M-Pesa to grow into a behemoth that now threatens to overwhelm its host. The risks posed by M-Pesa in its current form have been growing for a while, but it seems the mother company, Safaricom, is either too big to regulate or too powerful for the regulators to attempt to rein in. And it is getting worse.

    M-Pesa’s ubiquity carries with it significant risks to those who handle the cash used in the transactions: the mobile money agents. Initially, crime via M-Pesa was mainly about people particularly prisoners using false pretences to receive money meant for other recipients. But this is easy to clamp down on, as Safaricom quickly made M-Pesa transfers reversible, and the need to register sim cards made identification of such thieves easy. The thieves adapted and moved up the food chain, targeting the mobile money agents instead. Agents handle large amounts of physical cash from deposits and for withdrawals. And because most are small neighbourhood businesses with little or no physical security, they quickly became sitting ducks for violent robberies, which have been growing in frequency and ferocity.

    Away from the cash element, M-Pesa introduced previously non-existent privacy risks, and these have been most in evidence in Kenya’s notoriously competitive political space. It is easy to use M-Pesa to identify a person, a facility which lends itself to criminal use for identity theft and fraud. At M-Pesa agent outlets, customer data is generally kept in unsecured manual ledgers that can be accessed easily, and there have been cases where this data has been used for criminal activities such as fraud. In other cases, this data has been used to fraudulently register unwitting users as members of political parties, and it cannot have escaped Kenya’s notorious election fixers that this data which includes National ID Card numbers, phone number, full names and location can easily be used to fraudulently register voters and thus obtain voting cards illegally. In January 2022, two senior employees of Safaricom were arrested in a sting operation when they attempted to sell Safaricom users’ mobile gambling data to leading sports betting firm. And there have been persistent claims that Safaricom pocks sides in the country’s closely-fought political battles: in last year’s election, it was claimed that Safaricom backed then-president Uhuru Kenyatta and his chosen candidate, Raila Odinga. These claims are premised on the alleged political preferences of the current Safaricom CEO, Peter Ndegwa, who is said to be close to former president Uhuru Kenyatta, and is also alleged to have largely done Kenyatta’s bidding during the 2022 presidential elections.

    Ndegwa’s reign at Safaricom has been heavily criticised for its evident shortcomings. Under his leadership, and despite Safaricom enjoying a massive first-mover advantage in both telecom and mobile money services, the company’s stock valuation has lost over KES 810 billion (over US$ 6.5 billion). This is a decline of over 48%, which is an anomaly given the overall market performance during the same period saw a general decline of just 16%, attributable to the challenges faced during the Covid pandemic and the electoral period. It will not have escaped notice that this poor performance – which is reflected in a similarly-declining after-tax performance started after Ndegwa took charge of the giant telco.

    Briefings from within the company indicate that Safaricom is at sea under Ndegwa. Staff speak of an environment of fear and a chief executive who trusts no one but his handpicked lackeys, all of whom are new to the company and were allegedly brought in to do his bidding. The resultant low-trust working environment has seen many experienced senior employees leave the organisation, with their roles filled by even more Ndegwa allies. Curiously, it appears all senior female employees that Ndegwa found at Safaricom have either left the company or moved to other parts of it, away from direct dealings with the CEO including Chief of Strategy Deborah Malowa, Chief of Enterprise Rita Okuthe, Customer Care Director Janet Atika, and newly minted MTN Uganda CEO, Sylvia Mulinge.

    More worryingly for the company, there are credible accusations of ethnic chauvinism in Ndegwa’s appointments at Safaricom. His senior appointments including his main fixer, Nicholas Macharia, as well as James Kiama, Agnes Kinga, Stanley Njoroge, and so on all are from Ndegwa’s Kikuyu community. Within Safaricom, this openly ethno-centric approach to making appointments has unsurprisingly not gone down well, and partly accounts for the lacklustre performance of staff since Ndegwa became CEO.

    Safaricom and its M-Pesa service are facing these organisational and financial challenges just as M-Pesa becomes the literal lifeblood of Kenya’s economy. When M-Pesa has a downtime, the effect on the economy is instant and very noticeable. M-Pesa is now critical to every sector in Kenya, and is having previously unforeseen effects not just on the commercial sector in the country, but also on the cultural setup of the country. Before M-Pesa, access to financial services in Kenya was heavily male-dominated, since banks needed security to provide credit to customers, and in most of Kenya such security was typically employment payslips or land title deeds both of which were overwhelmingly male domains. However, M-Pesa overturned all this. Rural women can, thanks to M-Pesa, access banking and credit services that were previously out of reach for them, and they are responsible for a revolution in micro-enterprises that have seen new businesses and trading models pop up all over rural Kenya. As a result, these rural women are increasingly moving into breadwinner roles within their families, massively upending the cultural status quo and reforming Kenya’s very conservative rural cultural setup.

    But the growth and ubiquity of M-Pesa is also having negative consequences, particularly in the urban areas. Household debt is growing, as M-Pesa’s easy loan and credit facilities like M-Shwari and Fuliza tempt unwary consumers into debt situations not unlike those of credit card customers among the middle classes. The generally low levels of financial and credit literacy in the country are, when combined with such easy access to credit, likely to lead to significant socio-economic challenges for the country.

    M-Pesa long ago outgrew Kenya and is now integrated into the wider economic fabric of East and Central Africa. But as the service continues to grow it has now spread its wings to Ethiopia, Eastern Africa’s largest economy it will need careful tending to keep it both nimble and profitable. When M-Pesa sneezes, Kenya catches a cold. The service and its mother company, Safaricom, are as close as one can get to an institution that is, in Kenyan terms, “too big to fail”. It is at this critical point in its development that M-Pesa and by extension Safaricom is in need of careful regulation and far sighted leadership. The regulatory authorities in Kenya have so far been on the money where mobile services are concerned. It is Safaricom’s company leadership that is worrying and, if company insider reports are to be believed, there may be a case for the powers that be to push for a change in the leadership of the giant company and for future company leadership to be subjected to the sort of scrutiny that a government minister would be. The status quo, with the company losing billions in market valuation thanks to shoddy leadership, is clearly untenable.

    Source: Nairobi Law Monthly.

  • NIS Links Governor To Banditry

    NIS Links Governor To Banditry

    Samburu Governor Jonathan Lelelit is on the receiving end following intelligence reports from agencies linking him to banditry that has consumed the North Rift region prompting a multi-agency security operation to stop the menace.

    Too secure officials have linked the governor to mobilization and training of the militia that is reigning havoc amongst the locals.

    The governor has come out fuming and accusing the National Intelligence Service (NIS) of writing inaccurate security briefs to taint his image and misinforming Interior Cabinet Secretary Kithure Kindiki and Inspector General of Police (IG) Japheth Koome.

    The governor is being accused being accused of organising and training militia groups in Samburu. intelligence reports.

    In his briefs to the IG, Samburu County Police Commander David Wambua has accused the governor of buying and supplying ammunition to militia groups in the region.

    In the fight against banditry, following increasing cases and a growing number of casualties, CS Kindiki has warned that the government will not spare any politician aiding and abetting banditry in the North Rift.

  • Moses Kuria Now Wants Chinese Square Out Of Kenyan Market

    Moses Kuria Now Wants Chinese Square Out Of Kenyan Market

    Trade Cabinet Secretary Moses Kuria now wants China Square out of the Kenyan market.

    Via Twitter on Friday night, the CS said he has put up an offer to buy out the lease for the retailer  currently trading at Unicity Mall built by Kenyatta university in Thika Road.

    “I have today given an offer to Prof Wainaina the VC Kenyatta University to buy out the lease for China Square, Unicity Mall and hand it over to the Gikomba, Nyamakima, Muthurwa l and Eastleigh Traders Association,” Kuria said.

    “We welcome Chinese investors to Kenya but as manufacturers not traders.”

    China Square, a shopping hub within UniCity mall along Thika Road has been the darling of social media in the past weeks.

    Netizens have shared video clips of the inside and outside of the shopping hub and affordable prices of different household items that would otherwise require you to part with some thousands at other facilities across the city.

    The mall, built by Kenyatta University is a short distance from the northern and eastern bypasses, making it readily accessible to motorists and commuters.

    The mall also features retail shops, a hypermarket, banks and ATMs, and a National Oil fuel station.

    It is arguably the most flooded retailer in Kenya at the moment.

     

    According to various shoppers, the new hub stocks a wide range of products and services including stationery, furniture, home decoration items, cleaning supplies, hardware store, electrical appliances, party supplies and more.

  • Businessman Drags Gulf Africa Bank To Court Over Sh58M Loan

    Businessman Drags Gulf Africa Bank To Court Over Sh58M Loan

    A businessman has accused a bank of causing the loss of his land title so as to charge him more interest over a Sh58 million loan.

    Hashim Mohammed accused Gulf Africa Bank Limited of denying him a chance to sell his property while taking advantage of the situation to demand millions of shillings as interest.

    “The bank caused my land title to disappear so as to frustrate my efforts to sell the property and repay them their amount. As a result of their tricks, they levied me an additional Sh4 million on top of the principal loan amount which I had repaid,” said Mohammed.

    Through lawyer Hassan Ndege, the businessman told the court that he took a loan from Gulf Africa Bank in 2010 and secured it with his two land titles located in South B, Nairobi county.

    He argued that in 2013, he received an offer from a company that was ready to purchase the land at a cost of Sh65 million. He intended to use the money to settle the bank loan which, at the time, was Sh58 million, and remain with a profit of Sh7 million. However, when he approached the bank to release the title so as to conclude the sale transaction and settle the outstanding loan balance, the bank informed him that the land titles got lost.

    “They told him that his titles were all lost while in the bank’s custody and gave a false promise that they will not levy profit and penalty charges only to realise that the bank had taken advantage to levy interest charges at 21 per cent,” said Ndege.

    According to the lawyer, the bank owed the businessman duty of care to ensure his land titles were safe.

    He submitted that since the businessman was frustrated by the Gulf Bank’s refusal to discharge his title, he approached National Bank which agreed to buy off the loan to save on the high-interest rates but his efforts were again frustrated by the lost title.

    Mohammed said he waited for another two years before Gulf Bank processed another title. But the bank denied the claims arguing that the businessman is lying.

    He added that the bank did not intentionally cause the loss of Mohammed’s land title.

  • KURA DG Kinoti On The Spot As Agency Fails To Account For Sh2.7B

    KURA DG Kinoti On The Spot As Agency Fails To Account For Sh2.7B

    The Kenya Urban Roads Authority (KURA) has been in the news lately after the release of a report by the Auditor General. The report details several issues of concern within the organization, and Eng. Silas Kinoti, the Director-General of KURA, has been at the center of the storm.

    The Auditor General Nancy Gathungu has once again fingered the Kenya Urban Roads Authority (KURA) over its failure to account for Sh2.7 billion advanced to it. Among the issues cited in the report are inadequate maintenance of roads, lack of proper documentation of expenditures, and the use of outdated equipment.

    Gathungu in a report regretted that KURA did not have a separate account for this money as the funds were banked in the authority’s main bank’s account adding that the said money was not supported with a cashbook, bank reconciliation statement and bank confirmation certificates.

    “In the circumstances the accuracy and completeness of the cash and cash equivalent balance of Sh 2,717, 690, 436 could not be confirmed, reads the report.

    In her latest report tabled in the National Assembly last week by leader of Majority Kimani Ichung’wa, Gathungu also regretted that there was no value for money realised over the construction of the newly built footbridge along the Eastern Bypass Road around city cabanas areas as well as the maintenance of the Nairobi Outering road.

    With regards to the footbridge, she said that the institution did not get any value for money due to poor road workmanship done on the bridge.

    She revealed that physical verification conducted by the institution in February last year, shows that metal bars had been vandalised thus exposing pedestrians to the risk of being run over by speeding vehicles while crossing the road at undesignated areas.  It adds, “In the circumstances, value for money from road assets may not be achieved.”

    According to her, Kura maintenance Levy Fund needs to erect tall guardrails of heavy gauge and have a multi-agency approach to protect road assets from vandalism. The construction of the footbridge was carried through funding from African Development Bank (ADB) following the expansion of the 28km Eastern Bypass, which was being expanded into a dual carriageway at the cost of Sh12.5 billion.

    Frequent accidents

    The queries by Gathungu comes barely four months after motorists plying along bypass in Ruiru, Kiambu County protested over frequent road accidents in the area after over five reported people were killed by speeding motorists at the busy highway.

    The bypass dualling project was among 11 major infrastructure initiatives Kenya showcased to international investors during the Belt and Road Forum in Beijing, China, in May 2017.

    The Eastern Bypass was constructed as a single carriageway, but since its completion in 2014, considerable urbanisation and commerce along the corridor occasioned significant traffic volumes.

    Unpredictable traffic

    As a result, severe and unpredictable traffic jams rendered the road unusable as a reliable link to Jomo Kenyatta International Airport (JKIA).

    LWith respect to the outering road, she said that physical verification of the project carried out in February last year had revealed that the designated pedestrian foot bridge at the main junction of the outering road and Thika Road lacked barriers and lighting systems.

    Further she lamented that the Tassia road section had open drainages clogged with garbage and overgrown vegetation despite the fact that a firm had been contracted to regularly maintain the drains along the road. “In the circumstances, value for money from road assets may not be achieved,” the report states.

    Eng. Silas Kinoti, who has been at the helm of KURA since 2019, has been accused of mismanagement of funds and lack of proper leadership within the organization. In particular, the report raises concerns about the use of funds for road maintenance, which is a critical function of KURA.

    The report also notes that KURA did not provide the necessary documentation to support expenditure on various projects. This lack of documentation makes it difficult to determine whether the funds were spent in accordance with the law and regulations.

    Eng. Silas Kinoti has defended his record, arguing that KURA has made significant strides in the past few years. He notes that the organization has undertaken several road construction and maintenance projects, and that the projects have been completed on time and within budget.

    However, critics have pointed out that the lack of documentation and accountability raises serious questions about the effectiveness of KURA’s leadership under Eng. Kinoti. They argue that without proper documentation, it is impossible to know whether KURA is meeting its mandate of maintaining and improving urban roads.

    The Auditor General report has sparked a heated debate about the state of KURA and the accountability of public officials in Kenya. Many people are calling for a thorough investigation into the operations of KURA and for those found responsible for mismanagement to be held accountable.

    In conclusion, the Auditor General report on KURA raises serious concerns about the management of urban roads in Kenya. Eng. Silas Kinoti, as the head of KURA, has come under scrutiny for his leadership and management of the organization.

    One of the most damning revelations in the report is that KURA paid contractors who had not completed their work, resulting in a loss of Sh 51.9 million. This was partly due to Kinoti’s failure to follow due process and ensure that the contractors had fulfilled their obligations before releasing payment.

    The report also highlights several instances where KURA overpaid contractors, resulting in a loss of millions of shillings. In one such case, KURA paid a contractor Sh 90 million, even though the contractor had only completed 20% of the work. Kinoti was directly implicated in this case, as he had authorized the payment without following due process.

    This latest report is just one of several that have been released over the years highlighting KURA’s financial mismanagement. However, despite these reports, Kinoti has remained at the helm of the authority, with little to no consequences for his actions.

    Eng. Kinoti was controversially appointed to the DG position by then transport CS James Macharia despite opposition from insiders that he lacked the integrity of holding such a high office. At the time, many said he was a conduit for Macharia to loot the agency.

    Macharia was one of the Uhuru regime CSs who’re on anti corruption scouts with suspicions that he amassed billions from several contracts in the ministries he ran. He’s fondly referred to be one of the four million dollar millionaires in Uhuru’s cabinet.

    Before his appointment in June 2020, Kinoti had been acting as KURA Director-General since September 2015.

    He joined the authority in 2009 as Manager (Roads) and was later promoted to General Manager (Planning and Environment).

    At the time, Kinoti, was accused by critics of helping cartels in the transport sector benefit from state projects through procurement malpractice and irregular contracts.

    During his reign, KURA has been accused of giving tenders to cronies, then later advertise as a formality.

    KURA is accused of having favoured a construction firm identified as Stecol Corporation to do Ksh19 billion works in Nairobi, Kajiado and Kiambu counties.

    The firm was involved in the upgrading of Outering Road. It has also been mentioned in the construction of a bridge at AllSops that will join Outering Road and Thika Superhighway.

    Stecol Corporation is also said to have been awarded most of the contracts in the regeneration of roads in Nairobi Eastlands.

    It is clear that Kinoti’s continued tenure as Director-General of KURA is untenable. His track record of financial mismanagement and incompetence has cost Kenyan taxpayers millions of shillings, and it is time for him to be held accountable for his actions.

    In conclusion, the Auditor General’s latest report on KURA’s failure to account for Sh2.7 billion is a damning indictment of the authority’s financial management. Kinoti’s past record and scandals only serve to highlight his incompetence and the urgent need for him to step down from his position. The government must take swift action to hold those responsible accountable and ensure that such financial mismanagement does not continue to occur in the future.

  • What JP Morgan’s Opening Office In Nairobi Means For Kenyan Market

    What JP Morgan’s Opening Office In Nairobi Means For Kenyan Market

    JP Morgan’s entry into Kenya’s market has raised eyebrows due to its controversial past and scandals. JP Morgan, the largest bank in the United States by assets and one of the biggest financial giants globally, has a history of fraud and unethical practices that may affect Kenyan investors.

    In recent years, JP Morgan has been involved in several corruption cases which have cost it billions in fines. These include a $13 billion settlement for illegally packaging and selling mortgage-backed securities which caused losses for investors; a $2 billion settlement for covering up fraud relating to Bernie Madoff; a $920 million payment related to interest rate rigging; and most recently, an investigation over suspicions of foreign exchange rate manipulation.

    The first big scandal to hit JP Morgan Chase was when the firm was accused of mis-selling mortgage-backed securities. During a slump in the housing market some financial institutions sold packages of mortgages to people who had no real understanding of how mortgages work or what kind of risks are involved in investing in them. This egregious behaviour sent shockwaves through markets and put millions at risk of losing money or even their homes as these so-called ‘securities’ defaulted en masse. As a result, many investors suffered significant losses while JPMCC escaped without any penalties or fines whatsoever. 

    Another scandal came to light when JPMorgan was named one of six banks that agreed to pay out billions in settlements over alleged manipulation in international foreign exchange trading markets. This scandal demonstrated the power these big banks have over fixed income markets worldwide and countless traders saw their savings disappear at their own hands because they could not compete with the resources available to these powerful organisations. 

    Finally, there is also the LIBOR rigging scandal that JP Morgan Chase was implicated in back in 2013. Despite being one of five major banks facing civil charges for manipulating interest rates contained within LIBOR (London Inter-Bank Offered Rate), JP Morgan were singled out by its peers for being particularly bad offenders engaging in “particularly egregious” activity during 2008/2009 financial crisis that lead up to heavy investor losses but so far, no criminal investigation against it despite clear evidence violations took place then.

    Such scandals demonstrate the lack of ethical conduct by JP Morgan and raise doubts among potential Kenyan investors as to whether they can trust such an entity with their hard earned money.

    Now faced with these challenges, the bank is preparing to move into Kenya’s market which presents its own set of risks due share many characteristics from all three scandals mentioned above – Excessive Risk Taking: Forex manipulation involves taking on leverage at extreme levels which can be devastating if bets go awry; Mis selling: With regards mortgage backed securities many buyers did not understand what they were buying as sellers such as JPMorgan failed to provide adequate information; Finally Regulatory arbitrage: Traders moved too fast creating regulatory loopholes or put trades through other financial products thus avoiding regulators scrutiny and become incompatible with rules regulating those markets triggering huge investor losses worldwide while none going after perpetrators either criminal nor civil basis since time immemorial yet again.

    Additionally, JP Morgan serves as custodian bank for some government bonds backed by International Financial Corporation (IFC), thus making them responsible for assuring corporate governance standards within these projects. With JP Morgan’s questionable history, it introduces further risk if IFC’s own investment criteria are not fully implemented or enforced in Kenya or any other country where IFC invests.

    The situation worsens when placed in the context of perceptions about Big Banks among Kenyans – that is negative. According to a 2014 Finscope survey on financial inclusion in Kenya, 33% of Kenyans surveyed indicated negative attitudes towards big banks or financial institutions compared with 42% positive attitudes. To counter this perception (among other initiatives) JP Morgan has launched various community initiatives and education programs targeting young people from underprivileged areas who lack access to quality education because of their financial status but could benefit from learning about banking principles at an early stage and develop into sustainable bank customers. 

    For now, it remains too early to tell what effect JPMorgan investments will have on Kenya’s economy especially with regards to trust between foreign investors and local entrepreneurs/businesses as well as with respect to protection & security of Kenyans’ finances held with JPMorgan-affiliated products & services. Nevertheless, African governments must ensure that everyone playing by the rules- especially major players such as Jp Morgan- are doing so with full disclosure and transparency while providing public accountability & consumer protections throughout Africa’s markets including Kenya’s.

  • Nipsey Hustle’s Killer Gets 60 Years To Life In Prison

    Nipsey Hustle’s Killer Gets 60 Years To Life In Prison

    LOS ANGELES (AP) — A Los Angeles judge on Wednesday sentenced the man convicted of gunning down rapper Nipsey Hussle to 60 years to life in prison.

    Superior Court Judge H. Clay Jacke II handed down the of-delayed sentence to Eric R. Holder Jr., 33, who was found guilty of the 2019 first-degree murder of the 33-year-old Grammy-nominated hip-hop artist outside the clothing store Hussle founded, the Marathon, in the South Los Angeles neighborhood where both men grew up in very similar circumstances.

    After the monthlong trial, jurors in July also convicted Holder of two counts of attempted voluntary manslaughter and two counts of assault with a firearm for gunfire that hit two other men at the scene who survived.

    Superior Court Judge H. Clay Jacke handed down the sentence Wednesday after hearing from one of Hussle’s friends and listening to a letter from Holder’s father that was read in court. Holder, dressed in orange jail attire, stared straight ahead throughout the proceedings and did not react when the sentence was read.

    Holder was not eligible for the death penalty. He was nearly certain to get a sentence that would guarantee he would spend the rest of his life in prison, with only the details of his term in question.

    The sentencing has been delayed in part so defense attorney Aaron Jansen could argue to reduce Holder’s conviction to manslaughter or second-degree murder, which Jacke rejected in December.

    Hussle, whose legal name is Ermias Asghedom, and Holder had known each other for years growing up as members of the Rollin’ 60s in South LA. Both were aspiring rappers. But Holder never found the same success as Hussle, who would become a local hero and a national celebrity.

    Actor Lauren London, who was Hussle’s partner and the mother of his two young children, did not attend any part of the trial, nor did any of his relatives, and none are expected to give victim impact statements, as often happens at such hearings.

    Herman “Cowboy” Douglas, a close friend of Hussle who was standing with him when he was killed and testified during the trial, told the court that the killing was a tremendous loss both for him personally and for the South Los Angeles community where Hussle was a business leader and an inspiration.

    “Nipsey was my friend, he was like a son, he was like a dad,” Douglas said. “Our community right now, we lost everything, everything we worked for. One man’s mistake, one man’s action, messed up a whole community.”

    Douglas told the judge, “I don’t care what you give this guy. It ain’t about the time. I just want to know why. The world wants to know why. Why someone would do that?”

    The evidence against Holder was so overwhelming — from eyewitnesses to surveillance cameras from local businesses that captured his arrival, the shooting and his departure — that his attorney conceded during trial that he had shot Hussle.

    But Jansen argued to jurors that the heated circumstances of the shooting meant a lesser verdict of voluntary manslaughter was merited.

    The jury returned with the first-degree murder verdict after about six hours of deliberations.

    Jansen said afterward that he was “deeply disappointed” in the verdict, which they planned to appeal.

    He did manage a minor victory for Holder by securing the attempted voluntary manslaughter convictions where prosecutors had sought attempted murder verdicts.

    A year after his death, Hussle was mourned at a memorial at the arena then known as Staples Center, and celebrated in a performance at the Grammy Awards that included DJ Khaled and John Legend.

  • Retired Military Pilot Drags Ruto To Court Over Unfair Dismissal

    Retired Military Pilot Drags Ruto To Court Over Unfair Dismissal

    Former Kenya National Trading Corporation (KNTC) chairman Capt. Paul Rukaria has sued President William Ruto and Attorney General Justin Muturi for revoking his appointment to the board.

    Rukaria, a retired commissioned officer of the Kenya Defence Forces (KDF), had been appointed by former president Uhuru Kenyatta on August 5, 2022 -four days before the Presidential elections – for a term of three years.

    President Ruto, however, revoked the appointment as the chairperson of the board of directors of KNTC through a gazette notice on February 6, 2023.

    Ruto replaced him with Hussein Tene Debasso.

    Aggrieved by the move, Rukari yesterday sued the President and the AG challenging the revocation. He wants the appointment of his successor quashed and he reinstated to the position.

    In the suit, where he has sued the President in person/in his personal capacity, Rukaria claims that there was no consultation with the State Corporations Advisory Committee before his removal from office.

    “Section 7(3) of the State Corporations Act is clear that before the President can revoke the appointment of any Board member, there has to be cogent reasons for the said revocation and that the same must be subjected to consultation with the state Corporation Advisory Committee,” Rukaria stated.

    He alleges that the President violated the Constitution and the Act.

    “I was neither notified nor informed of the impending gazettement and had to embarrassingly find out about the same from social media and incessant calls from friends and relatives. Needless to say, no reasons were given for the said prejudicial action,” Rukaria claims.

    Alleging infringement of his rights, Rukaria says he was not served with any notice of intention to revoke his appointment and that no reasons were offered.

    In addition, he was not invited to any hearing to establish his suitability to hold the office as chairperson of the Board of Directors of the Corporations and he was not charged or suspected of committing any offence that would make it unsuitable for him to hold the office.

    He adds that there is no evidence that Debasso’s appointment was objective, impartial and not influenced by nepotism, favouritism, other improper motives or corrupt practices.

    Stating that as a retired KDF officer, he discharged his duties as the chairperson of the Board of Directors of the State Corporation with dedication, integrity and without fear or favour from the date he was appointed to the benefit of the nation.

    Pending the hearing and determination of the suit, Rukaria wants the court to suspend the revocation.

  • Sonko Leaks Throwback: Justice Chitembwe, Omwanza And Lawyer Cecil Miller Recorded

    Sonko Leaks Throwback: Justice Chitembwe, Omwanza And Lawyer Cecil Miller Recorded

    Throwback: Justice Chitembwe caught on tape discussing alleged bribe in the infamous Sonko leaks. He’s heard directing that the agreed amount should be deposited into an account of an advocate only mentioned as Omwanza. In the subsequent part, lawyer Cecil Miller is taped conversing with Chitembwe’s accomplice oblivious that his conversation is being recorded. (Click to watch the video)

    IMG_0410

    Juma Chitembwe preferred his share of a Sh305 million land deal in Kinondo, Kwale County, be taken to his house in dirhams and dollars, a transaction that would ultimately lead to his downfall.

    According to the report of the tribunal formed to investigate his conduct, the judge also used a proxy to acquire beneficial interest in a land parcel that was the subject of a case that he was presiding over at the High Court in Malindi. Another unidentified judge in Malindi got Sh30 million for stepping in for Justice Chitembwe to deliver judgment in a succession case where the subject land was part of the estate.

    The report includes damning evidence adduced before the tribunal on how money changed hands in two cases – a property succession in Malindi and the impeachment of former Nairobi Governor Mike Sonko – in which the embattled judge was on the bench.

    The evidence, which includes bank transactions and telephone calls data, saw the tribunal recommend the judge’s removal from office.

    The petition for his removal was submitted by the Judicial Service Commission (JSC), arising from a fallout with Mr Sonko, who the tribunal heard was a distant relative.

    Although the judge told the tribunal they were related through marriage – the judge’s late step cousin was married to Mr Sonko’s aunt – Mr Chitembwe said he first met the former governor in 2016 in Malindi, where he was serving as a judge.

    Their reuniting in Nairobi would set the stage for transactions that would sour their relationship and lead to the ouster recommendation.

    The evidence was not available to the public during the tribunal’s sittings because the hearings were conducted in private.

    The report further indicates that another unidentified judge in Nairobi had demanded Sh5 million from Mr Sonko to conclude a Sh100 million legal fees dispute pitting the former governor and a city lawyer. Justice Chitembwe was to get a commission of Sh1 million from the deal, the 250-page report released yesterday indicates.

    It also contains details of Justice Chitembwe’s private engagement with Mr Sonko’s aide Francis Wambua, State House official George Kariuki, former Nairobi County Assembly Majority Leader and now Isiolo Governor Abdi Guyo and lawyers during the impeachment case.

    Relating to Mr Sonko’s impeachment case, the former governor testified before the tribunal that his ally Winnie Korir took Sh3 million to the judge’s house “because the judge had indicated that he urgently needed it”. He added that on May 22, 2021, the judge called for a meeting in Diani before the judgment in the impeachment case had been delivered. In the meeting they discussed the land transactions and his then ongoing impeachment case.

    The former governor stated that Justice Chitembwe communicated that two of the three judges handling the case had accepted some money advanced to them by a respondent in the case and that he was required to pay double the amount to be safe. He further stated that he told the judge that he could not raise any money at the time because of the ongoing land transaction in Kwale.

    On the land transaction, Justice Chitembwe and Mr Sonko got Sh305 million in 2021 from the Consul of Nepal in Kenya Jimmy Ibrahim Askar, who said that some Nepalese investors approached him to assist them in identifying land to put up a hotel in the South Coast.

    Mr Askar identified two land parcels adjacent to each other, one belonging to Mr Sonko and the other to Mr Amana Jirani, a proxy for Justice Chitembwe. The purchase price of both properties was Sh305 million.

    Mr Sonko and the Justice Chitembwe agreed to team up and proceed with the transaction jointly.

    But the properties (Kwale/Galu Kinondo/779 and Kwale/Galu Kinondo/1222) were subject to a succession case at the High Court in Malindi, involving the estate of Peter Werner.

    The report indicates that Justice Chitembwe assisted the widow Jane Mutulu Kyengo to get the ownership and in return he purchased parcel No.779 through Jirani.

    After the transaction with the Nepalese sailed through, the parties agreed to have Sh60 million paid to parties at the Court of Appeal. The report indicates that the judge also insisted that some money be taken to his house in dirhams and dollars and that “the ‘Maasais’ be dealt with through their advocate, Mr Omwansa”.

    Justice Chitembwe also held meetings at his residential home in Mountain View estate, Nairobi with various persons to advice and discuss withdrawal of an appeal that was pending at the Court of Appeal in Malindi that emanated from his judgment.

    The tribunal heard that when the land dispute moved to the Court of Appeal, Justice Chitembwe had promised to approach the judges on the bench. Mr Sonko said the judge suggested that they approach Justice Daniel Musinga, which Sonko declined stating that he (Justice Musinga) was a born-again Christian who did not take bribes.

    Resulting from the tribunal’s recommendation, Justice Chitembwe is now one step away from being removed from office over alleged gross misconduct and misbehaviour, although he says he will challenge the intended removal.

    Asked about his take on the tribunal’s findings, the judge told the Nation “Not much I can say” and indicated he would be filing an appeal to the Supreme Court.

    Should he move to the Supreme Court, it will be his last chance to prove his innocence on the misconduct charges.

    In the past, some of judges on the edge of being removed from office survived after the Supreme Court reversed the tribunals’ recommendations.

    According to article 168(8) of the constitution, a judge who is aggrieved by a decision of the tribunal may challenge it at the Supreme Court. Justice Chitembwe will therefore have to file his appeal within 10 days after the tribunal makes its recommendation.

    The tribunal chaired by Justice Mumbi Ngugi found Justice Chitembwe guilty of four out of six misconduct allegations levelled against him by his employer the JSC.

    He was found guilty of acquiring a proprietary interest in the land parcel in Kindono, which was the subject of a succession case before him. He therefore breached the Judicial Service Code of Conduct for Judges.

    “There is sufficient evidence to prove that the judge acquired an interest over land parcel No.Kwale/Galu Kinondo/779 through his relative and proxy Mr Amana Saidi Jirani,” said the tribunal in its findings.

    Justice Chitembwe was also found guilty of discussing the withdrawal of a case at the Court of Appeal in Malindi at his residential home in Mountain View with Ms Kyengo, Mr Sonko, Mr Askar, Jirani among others. The case was between Pacific Frontiers Seas Limited and Ms Kyengo.

    During the meeting, they discussed the sale of the land in Kinondo for his personal benefit and the withdrawal of an appeal challenging his verdict on the property.

    “The judge grossly misconducted himself by advising the parties on the procedure to be followed to have an appeal which was filed against his own judgment withdrawn and promising to discuss the matter with other judges and judicial officers who were handling the said appeal,” said the tribunal.

    Thirdly, the judge grossly misconducted himself by presiding over a bench in the impeachment case against Mr Sonko being known and closely associated with the former governor.

    “The judge grossly misconducted himself by presiding over a bench whilst being known and closely associated with Mr Sonko, one of the petitioners,” said the tribunal in its report. The judge failed to disclose to the Chief Justice and his colleagues on the bench and the parties that he was personally known to Mr Sonko.

    In a television interview on November 18, 2021, the judge admitted that the former governor was known to him and was his relative.

    Fourthly, Justice Chitembwe held a meeting with Mr Sonko during which he offered legal advice on the viability of an appeal and the proposed grounds of appeal against the judgment that upheld his impeachment.

    The genesis of the judge’s tribulations are videos leaked by Mr Sonko in 2021 after lost his bid to overturn his impeachment. The videos depicted the judge in a scheme to compromise an active court case involving the property succession in Kwale.

    According to the Constitution, recommendations of the tribunal to the President are binding. The President acts in accordance with the recommendations made by the tribunal after 10 days if no appeal is filed.

  • Secretive Trip: Darkened Airforce One, How Biden Got To Kyiv

    Secretive Trip: Darkened Airforce One, How Biden Got To Kyiv

    President Joe Biden’s surprise visit Monday morning to wartime Kyiv began in the dead of night at a military airport hangar outside Washington.

    At 4am (0900 GMT) Sunday — unbeknown to the world’s media, the Washington political establishment or American voters — the 80-year-old Democrat boarded an Air Force Boeing 757, known as a C-32.

    The plane, a smaller version of the one US presidents normally use on international trips, was parked well away from where Biden would usually board.

    And a telling detail: the shade on every window had been pulled down.

    Fifteen minutes later, Biden, a handful of security personnel, a small medical team, close advisors, and two journalists who had been sworn to secrecy, took off en route to a war zone.

    The US president is perhaps the most constantly scrutinised person on the planet.

    Members of the press follow Biden wherever he goes — whether to church or international summits. Every word he says in public is recorded, transcribed and published.

    In this case, though, the usual pool of reporters, which for foreign trips would consist of 13 journalists from radio, TV, photo and written press organizations, was cut to one photographer and one writer.

    The reporter, Sabrina Siddiqui from The Wall Street Journal, revealed — once allowed by the White House to publish details — that she and the photographer were summoned to Joint Base Andrews outside Washington at 2:15 am.

    Their phones were confiscated — not to be returned until Biden finally arrived in the Ukrainian capital about 24 hours later.

    They flew for about seven hours from Washington to the US military base in Ramstein, Germany, for refueling. Here too, the window shades stayed down and they did not leave the plane.

    The next flight was to Poland, landing in Rzeszow–Jasionka Airport.

    This may be a Polish airport, but since the Ukraine war it has also become an international hub for the US-led effort to arm the Ukrainians, funneling billions of dollars of weaponry and ammunition.

    Good to be back

    Up to this point, Siddiqui and the photographer, the Associated Press’ Evan Vucci, had not seen Biden himself. That didn’t change at the airport or when they got into a motorcade of SUVs.

    Reporters traveling with Biden often go in motorcades, but something was very different about this one: no sirens or anything else to announce that the US president was headed to Przemysl Glowny — the Polish train station near the Ukrainian border.

    It was already 9:15 pm local time as they pulled up at a train. The journalists were told to board, still without laying eyes on Biden.

    Running a route that has brought untold quantities of aid into Ukraine and untold numbers of Ukrainian civilians fleeing the other way, the train had about eight cars.

    Most of the people aboard, Siddiqui said, were “heavy security.”

    Biden is an avowed train buff.

    He loves recounting his years of commuting by rail between Washington and home in Delaware when he was a senator, bringing up two young sons after their mother died in a car accident. One of his nicknames is “Amtrak Joe.”

    This 10-hour trip into Ukraine, though, was unlike any taken by a modern US president — journeying into an active war zone where, unlike presidential visits to Afghanistan or Iraq, US troops are not the ones providing security.

    The train rolled into Kyiv with the rising sun.

    Biden, who had last visited the Ukrainian capital when he was vice president under Barack Obama disembarked at about 8:07 am.

    “It’s good to be back in Kyiv,” he said.-(AFP)

  • House Where Rally Driver Died Handed Over To Landlord, Court Declines Request To Close Maxine’s File

    House Where Rally Driver Died Handed Over To Landlord, Court Declines Request To Close Maxine’s File

    Milimani Senior Principal Magistrate Bernard Ochoi has ordered the release of the house that Khan shared with Maxine to the landlord

    This is after the Khan’s landlord of the premise where the incident happened urged the court to compel the DCI to release the house which is said to be a crime scene released back to him.

    He said the house known as Apartment number 3 block D at Prieston Courts plot in Kileleshwa is in rent arrears of Ksh269,500 and he is incurring losses.

    “As of now, we have arrears of Ksh269,500. It’s our request that the investigating officer gives back the premises to the landlord so that he does not continue to suffer the loss of income, given the admission that the investigations are done,” the court was told.

    Meanwhile, Ochoi has ordered the Director of Public Prosecutions (DPP) to file before court a report on the findings of the investigations into the death of the rally driver Asad Khan within 15 days.

    The orders were issued by Milimani Senior Principal Magistrate Bernard Ochoi after he declined a bid by the DPP and the Directorate of Criminal Investigations (DCI) to close the investigations file without giving directions on whether Khan lover Maxine Wahome will be charged or not.

    While rejecting the request by the state to terminate the miscellaneous application against Wahome, Magistrate Ochoi noted that it will be unfair to her if the matter is withdrawn without the investigating officer telling the court their findings.

    “This court must be informed by the findings of the investigations it will be unfair for the investigations file to be closed without the respondent (Wahome) being informed about the results that were being conducted against her,” Magistrate Ochoi said.

    “It would be an abuse of court process if the file is closed without the findings no matter what kind of investigations were being conducted,” he added.

    He further ruled that the investigations officer has obligation to inform the court of the findings.

    The magistrate said that the state needs to say what they intend to do to the person whom they sought to be detained pending investigations.

    In his ruling, Ochoi concurred with the submissions of lawyer Danstan Omari, who is representing the family of the deceased, that his clients also need to know whether the outcome of the investigations in the death of their kin.

    “In order to be fair to all parties, I give the DPP and the investigating officer 15 days to file a report of the findings and how they wish to proceed with the case,” the magistrate stated.

    The directives by the court come after the Investigating officer in the case on Monday, January 31, 2023, informed the court that investigations into the matter were complete and the file had been forwarded to DPP Noordin Haji’s office for perusal and recommendations.

    “I urged this court to close this investigation file. The DCI homicide office completed investigations into the matter on January 25 and the file forwarded to the office of DPP for perusal and further action,” the Investigating Officer stated.

    The DPP through James Gachoka however confirmed that their office had since received the investigations file in the matter and urged the court to close the miscellaneous application and sought more time to enable him to peruse and make his decision on whether Wahome is culpable for her lover’s death or not.

    Assad Family however opposed the DCI and DPP’s intention to close the investigations file without giving directions on whether Wahome will be charged or not.

    Through lawyer Danstan Omari, the family stated that the closure should wait for the DPP’s decision.

    While protesting the closure of the investigating file, Omari said that the Investigating officer has not disclosed its recommendations, arguing that closing the miscellaneous application without charging anyone is a set-up.

    “The investigation officer has not disclosed the recommendations. If the DPP decides to charge the person what happens? This is the first case where we don’t have the directions on whether the suspect will be charged or not,” the court heard.

    Omari said that his client fears that the DPP may not make any decision on the matter soon.

    Wahome’s lawyer Steve Kimathi said his client did not oppose the decision as she had complied with the court directions and will continue to cooperate until the DPP gives node.

  • Two Nyanza Politicians Charged In Sh67M Gold Scam

    Two Nyanza Politicians Charged In Sh67M Gold Scam

    Two politicians from Nyanza have been charged with obtaining Sh12.7 million in a gold scam.

    Seth Steve Okute who contested the Karachuonyo parliamentary seat Member on an ODM ticket and Bruno Otieno Oliende appeared before Milimani Senior Principal Magistrate Esther Kimilu and denied the charges.

    Mr Oliende contested the Suna East parliamentary seat in Migori County as an independent candidate.

    Mr Okute and Mr Oliende were charged with obtaining $100,000 (Sh12,613,000) from Ms Marjorie Grant in March 2022 by pretending that they were in position to pay custom duties for 33 kilogrammes of gold shipped from Burkina Faso. They denied the charges.

    Their eight co-accused were not charged after the Director of Public Prosecutions (DPP) recalled the police file for review. Prosecutor Ann Munywa urged Milimani Magistrate Esther Kimilu to defer the planned plea-taking for the eight suspects until the Office of Director of Public Prosecutions (ODPP) makes final decision on whether to charge them.

    The magistrate granted the prosecutor 14 days and fixed the case for mention on March 6, when the court will be informed of the outcome of the ODPP’s review. The suspects are Samuel Wathika Gathuru, Moses Otieno Oketch, Patroba Odhiambo Tobias, Elisha Mbadi Kimbero, Teddy Samora Kowino, Loaennis Kaisarios, Mugabe Patrick Biriko and Collins Kiprotich Langat.

    They are currently out of police custody on a cash bail of Sh100,000 each though they are required to be reporting to the Directorate of Criminal Investigations Office every Friday.

    They were arrested two weeks ago for allegedly defrauding two American citizens $534,000 (Sh66,696,600) in a fake gold deal.

    The ten were arrested in separate raids at Nairobi’s upmarket Kitusuru and Kilimani suburbs.

    Mr Seth Steve Okute and Mr Bruno Otieno Oliende were released on bail of Sh100,000 each. According to the prosecution, the two were arrested following a report made by Ms Grant, an American investor living in Los Angeles, California. Mr Okute was the first to be arrested before detectives headed to Mr Otieno’s home in Kitusuru. Mr Okute was found in possession of a Baretta pistol loaded with 13 rounds.

    The sleuths found heavy metallic boxes, suspected to be used to store crucial information that is currently assisting the officers in the investigations.

    Mr. Okute is a serial offender who’s been arrested several times on accusations of fraud.

  • Lobby Group Seek To Have Richard Ngatia’s Sh10B CT Scan Disputed Tender Investigated

    Lobby Group Seek To Have Richard Ngatia’s Sh10B CT Scan Disputed Tender Investigated

    AREAS OF CONCERN

    Although one machine was to cost Sh75m, the price was later varied to Sh235m.

    Health ministry and the public may have been made to believe the procurement was a government-to-government arrangement between Kenya and China.

    Contract was executed through a restrictive tendering process and no procurement documents were made available.

    Queries raised on which company was visited by a committee conducting due diligence at the ministry.

    Queries on irregular procurement of Sh10.2 billion computed tomography scanners (CT scanners) associated with Megascope Healthcare, a firm linked to Kenya National Chamber of Commerce and Industry president Richard Ngatia, have once again resurfaced.

    This is after a civil society group asked for forensic investigations into the tender.

    In a petition, Frank Awino of Human Rights Crusaders — under Concerned Citizens, Kenya, a civil society organisation — calls for investigations into the tender.

    He says the procurement of 37 CT scanners was a gross violation of Article 227 of the Constitution and the Public Procurement and Asset Disposal Act and should not be allowed to “just slip away.”

    Awino, in the petition, notes: “There is overwhelming evidence of grievous irregularities and circumventing of the law in procurement of the CT scanners”.

    The petition is copied to National Assembly Clerk Samuel Njoroge, Ethics and Anti-Corruption Commission boss Twalib Mbarak, and Directorate of Criminal Investigations Amin Mohamed.

    Prosecution plea

    It calls for a probe into the matter and prosecution of those found culpable.

    The petition says there is overwhelming evidence of irregularities in how the tender was awarded.

    Article 227 (1) of the Constitution provides that when a State organ, or any other public entity, contracts for goods or services, it shall do so in accordance with a system that is fair, equitable, transparent, competitive and cost-effective.

    The contract signed on August 21, 2017, states that the Kenyan Government pays 20 per cent of the contract sum of Sh1.7 billion, with the Chinese government — through China Development Bank — financing the balance of Sh8.5 billion in loans, to be paid by the Kenyan Government.

    The supplier was required to purchase, install and maintain the scanners in hospitals identified by the Ministry of Health for five years.

    Although one machine was to cost Sh75 million, documents presented to Parliament revealed that the price was varied to Sh235 million, over three times the initial cost, signaling misuse of public funds.

    In his petition, Awino wants the investigative agencies to look at issues such as: The CT scan machines were not included in the managed equipment services (MES) leasing schemes, nor was an explanation made to the public as to why the Ministry of Health procured the same independently, besides violation of procurement laws.

    False belief

    According to the petition, the Ministry of Health and the public may have been made to believe the procurement was a government-to-government arrangement between Kenya and China.

    “Instead, the contract was awarded to Megascope Healthcare, whose directors are Richard Ngatia Waweru and Charles Ngungi Njenga; and not Neusoft Medical Systems,” reads the petition.

    It adds: “Further, there was no competitive bidding for the contract, since it was executed through a restrictive tendering process, and the beneficiaries could themselves, or through their agents, have induced the heist.”

    It also argues that no procurement documents were made available, as by the law, and in particular section 58 which requires tenders to be evaluated by a committee of the procuring entity for the purposes of making recommendations to the accounting office through the head of procurement.

    At a loss

    The petition comes after the National Assembly adopted the Public Accounts Committee (PAC) report that considered the audited accounts of the Ministry of Health, and was at a loss as to which company was visited by a committee conducting due diligence at the ministry.

    “As observed by the parliamentary Public Accounts Committee report, it is not clear which company the Ministry of Health inspection team — which went to conduct due diligence on the CT scan manufacturer — visited. The report presented to PAC referred to Neusoft Medical System, Pensoft Medical System and Natursoft Medical Systems, alternately and variously”, reads the petition.

  • EABL Dealt A Blow With Bia Tosha

    EABL Dealt A Blow With Bia Tosha

    East Africa Breweries Limited (EABL) and Kenya Breweries Limited (KBL) have suffered a blow after the Supreme Court ruled in favor of alcohol distributor.

    The Apex Court decision means Bia Tosha will get back it business to continue distributing the brewer products in 22 areas as it used to do before EABL attempted to terminate their distribution agreement.

    Supreme Court found that they were in contempt of High Court orders that stopped them from terminating distributorship agreement with Bia Tosha.

    Deputy Chief Justice Philomena Mwilu and Justices Smokin Wanjala,Njoki Ndung’u, Isaac Lenaola and William Ouko directed the High court to proceed to assess the suitable punishment arising out of the contempt application by Bia Tosha.

    “Having found that there was contempt of court, the High Court should also proceed to assess the suitable punishment arising out of the contempt application dated 23rd August 2016 by Bia Tosha pending before it,” ruled the Judges.

    This is after the Apex Court allowed the distributor appeal and set aside Court of Appeal Judgement to refer the dispute to arbitration per the respective parties’ distributorship agreements.

    “The judgment and orders of the Court of Appeal in Civil Appeal No. 163 of 2016 delivered on the 10th July 2020 be and are hereby set aside in entirety,” said the supreme court judges in their decision.

    The Beer distributor which had been appointed as the sole distributor for KBL liquor products for various routes within the country moved to court in 2016 after KBL and EABL repossessed 22 routes and reallocated them to other distributors and refused to refund the goodwill for the repossessed routes.

    The Apex Court Judges faulted the EABL and KBL adding that it was ingenious for the brewer to turnaround and raise expiry of contract that was never the subject of the court proceedings and determination.

    The judges further said that even if that were to be the case, it is absurd that the KBL, EABL and Diageo plc would on one hand invoke the expiry of the contract to justify noncompliance with the court orders while at the same time relying on the same ‘expired’ contract to refer the matter to the arbitrator.

    “Moreover, the order of the Court of Appeal affirms that as at 11th August 2016, when the contract relied upon by the respondents had ostensibly expired, the parties were still trading. This is the trading arrangement that both superior courts below preserved during the pendency of the hearing,” said the Supreme Court.

    Bia Tosha in the High court suit claimed KBL and EABL trade practices were unreasonable, anti-competitive, discriminatory and contrary to public policy, and in breach of its fundamental freedoms.

    It was Bia Tosha’s case that KBL’s actions of refusing to pay back goodwill which was sh 38 million amounted to a violation of its right to property under Article 40 of the Constitution.

    The High Court then issued an order preserving the exclusive distributorship to Bia Tosha but KBL went ahead and terminated the contract.

    Bia Tosha filed contempt of court proceedings against the top directors of KBL and EABL and sought a jail term of six months against the bosses plus a fine of  Sh30 million.

    However KBL and EABL moved to Court of Appeal and in its judgment, the appellate court overturned the High Court decision.

    The appellate court  directed the case to be handled by an arbitrator as per the distributorship agreements.

    Bia Tosha aggrieved escalated the dispute to the Supreme Court which ruled in favour of the distributor.

    The Supreme Court Judges held that the Court of Appeal failed to appreciate and uphold that the dispute before the court related to breach of constitutional rights.

    “The Court is alive to the fact that arbitration must remain an option open to any party within their understanding of their contract and there is no bar to any of them invoking any arbitral clause to assert their rights under the said contract…In determining the consequential reliefs, the Court underscored the fact that the main dispute is live before the High Court and decried the time taken in litigation,” observed the Supreme Court Judges.

    The Apex court bench further noted that the Court of Appeal did not decide on the pending applications either in a ruling or indeed in the judgment.

    It was Supreme Court Judges view that there was breach of the status quo orders and this was manifest in the KBL and UDV (KENYA) ltd attempt to terminate the contract with Bia Tosha or otherwise interfere with the said routes as revealed in the position on record taken by the said company.

     The decision adds that the replying affidavit sworn by Nadida Rowlands in response to the Bia Tosha’s application dated 23rd August, 2016 the KBL and UDV (k) ltd stated that the routes allocated under the two-month agreement were: Hurlingham, Industrial Area, Kenyatta, Langata, Nairobi West, South B and Upper Hill. 

    “In the letter dated 5th August, 2016 the two company’s lawyers request for evidence from the appellant of distribution routes as at 2nd February, 2006 was in our view mischievous in view of their long-standing partnership,” said Judges.

    This by extension amounted to contempt of court on the part of the KBL and UDV (k) ltd and prompted the applications to court by the appellant.

    The Judges noted that the effect of taking court processes and in particular court orders lightly even in the face of the court is that it is likely to encourage descend into anarchy and loss of confidence in the court process.

    “It was an unfortunate misdirection, in our view, that the appellate court, in the wake of such an application, deliberately ignored the same and shelved it as a side show…It is more disturbing that such an omission did not find any place for explanation in the judgment,” they noted.

    The five-judge bench remitted the case back to the High Court for hearing and restored the orders which were in force.

  • Firm Contracted By KNH To Supply Kidney Drugs Defeated By Demand Soaring Up Prices

    Firm Contracted By KNH To Supply Kidney Drugs Defeated By Demand Soaring Up Prices

    Emcure Pharmaceuticals, the firm contracted by Kenyatta National Hospital (KNH) to supply anti-rejection drugs for kidney transplant patients is on the spot for not meeting the demands of the crucial drug that has left many patients suffering.

    Prices of the drugs have nearly doubled, increasing pain for patients who have for years relied on subsidised drugs at the facility.

    A tablet of Tacrolimus is now retailing at Sh64 up from Sh30 in December last year while Cyclosporine is going for Sh260 from Sh185 apiece. Mycophenolate fetching Sh140 from Sh100 per tablet.

    The rise in the cost of drugs that are used to prevent rejection of transplanted organs, has sent most of the patients into distress given that the National Health Insurance Fund does not pay for post-transplant drugs.

    Patients have for years been buying the drugs from the KNH at subsidised prices but are now forced to dig deeper into their pockets pushing the monthly expenditure on Tacrolimus alone up by at least Sh6,600.

    The price rise has been linked to a supply hitch facing the new firm that was contracted by the national referral hospital to supply the drugs.

    KNH retained Emcure Pharmaceuticals to supply the drugs after the contract with Europa Healthcare lapsed last year. But the firm has been been struggling in sourcing similar drugs that Europa Healthcare sup-plied, leading to high prices because it has con-tracted a third party for the supplies.

    Anti-rejection medicine is key to sustaining the donated kidneys, and it is therefore discouraging to see that the cost of these medications has shot up at the Kenyatta National Hospital, risking a return to dialysis for many who cannot afford the higher charges.

    Some of the patients are forced to rely on fellow patients for supplies of the drugs highlighting the financial challenges that are now set to become dire in the face of the costlier drugs.

    NHIF pays up to a maximum of Sh500,000 for a kidney transplant, for both local and overseas transplants, with the patients forced to pay out of pocket for the post-transplant drugs.

    While the government has been proactive in funding dialysis, and the transplant process itself through the NHIF it remains a curious case of oversight why it has been reluctant to extend support to the purchase of the costly antirejection drugs.

    The prospect of costly post-transplant care versus State-paid dialysis is one of the factors behind some people opting to remain on the machines even when they have a viable and willing organ donor.

  • Residents Sue Private Developer Over Illegal Construction Of Parklands Building

    Residents Sue Private Developer Over Illegal Construction Of Parklands Building

    Veteran lawyer and residents of Parklands area have sued a private developer who is constructing a commercial building on Taza Lane.

    Lawyers David Ndambiri and residents want the High Court to temporarily direct the Nairobi County Government to stop further construction on LR No. 209/7549 city Park drive, parklands.

    The building is being erected by Sustainable Development Solutions ltd, Ali Ibrahim Hammed and Ameey Homes ltd.

    “An order of temporary injunction compelling 1st,2nd,3rd,4th,5th,6th and 7th respondent jointly and severally to stop and enforce any further construction activities on LR No. 209/7549 city Park drive, parklands by the 1st, 2nd, 3rd, 4th and 5th interested parties, their agents and/or servants or any other person,” the petition reads.

    The petitioners also argued that as residents of Taza Lane and the general public, they have a right to access information on the development being undertaken on disputed plot.

    It is there argument that documents and approvals used by the developer did not originate from the county government office.

    The documents include a letter dated 10th September 2020 authorizing Ameey Homes Limited to carry out demolition works on the plot, notification approval of development permission submitted for approval on 8th January 2019 and approved on 17th September 2020, construction permit over plan reg. No CPF_AU 165 dated 15th October 2020, Construction permit invoice, Copy of architectural drawing by Solcohm Studios with Reg. No. CPF AU 165 alleged to be approved on 15th October 2020.

    In the petition, the residents claim that approvals and the resultant construction or development is illegal, irregular null and void, from the word go.

    They further want the court to compel county government and the developer to demolish the building and structures within 90 days and to restore the site to its original condition or as it was before September 2020.

    The residents allege that the county physical and land use planning liaison committee, other courts and tribunals, have refused to allow them access the approvals.

    According to the residents, the construction and development of unknown number of residential apartments and other facilities on the subject property has negatively affected and will continue to negatively affect the physical and natural environment of the area near or adjacent area.

    They said the massive building has caused environmental damage and injury of immeasurable value to their neighborhood and community and the general public and if allowed to continue to completion, the resultant increases in residential population will cause congestion along Taza lane.

    “The ongoing construction has caused damage to the existing private septic tunnels and pipes with waste including toilet and bathroom effluents already overflowing from manholes. The waste will soon start draining to Mathare River which is less than sixty metres from the construction site,” residents told the court.

    They further told the court that the on-going construction is being undertaken in such a haphazard manner and there is every indication that resident and general public’s safety and security are at grave risk.

  • Woes Deepens For Kidero As Court Stops His Bid To Stall Sh58M City Hall Pilfering Suit

    Woes Deepens For Kidero As Court Stops His Bid To Stall Sh58M City Hall Pilfering Suit

    Former Nairobi Governor Dr Evans Kidero has suffered a blow after the Court of Appeal rejected his bid to terminate criminal charges pending before a magistrate’s court.

    A bench of three judges comprising of Justices Hannah Okwengu, Fred Ochieng and John Mativo dismissed the appeal stating the Kidero failed to not satisfy them as to why the trial or the civil case, seeking the recovery of Sh14 million, should be stopped.

    “The upshot is that we find and hold that the applicant has not satisfied the twin principles for consideration in an application under Rule 5(2) (b) nor is it in public interest to stay the proceedings. Accordingly, we dismiss the application dated 20th December, 2021,” ruled the appellate judges.

    The judges said they found nothing to suggest that if the civil suit is determined, the petition or the criminal trial will be rendered nugatory.

    The court further said that there was no suggestion that Kidero’s rights to a fair trial either in the criminal trial or the civil suit will be compromised.

    “To us this would have been a formidable arguable ground. There is no suggestion that requiring him to plead a defence in the civil action would have the effect of undermining his privilege against self-incrimination or prejudice his presumption of innocence in the criminal trial or his prosecution of the petition,” said the three judges.

    Kidero moved to the High Court challenging his arrest, detention, prosecution and the warrants authorizing investigations into his bank accounts.

    He sought a raft of reliefs among them a prayer that the criminal proceedings be quashed.

    The said petition was subsequently transferred to the High Court Anti-Corruption and Economic Crimes Division.

    And as the case was pending, Ethics and Anti-Corruption Commission moved to court seeking to recover Sh58 million, allegedly paid to former city hall of officials.

    Kidero is alleged to have received Sh14.4 million, which EACC was to trace and recover on behalf of City Hall.

    Aggrieved with the move by EACC, he sought the cases to be suspended pending the outcome.

    He argued that if civil suit is allowed to proceed concurrently with the other cases there is a real likelihood of the three courts entering different decisions over the same subject matter regarding his culpability.

    He further said to allow the matters to proceed concurrently is an abuse of the court processes by the 1st respondent.

    Kidero was of the view that it is wrong to concurrently prosecute both civil and criminal matters over the same subject, because the money could be recovered from him after conclusion of the criminal trial and if he is found guilty under Section 54 of the ACECA.

    He further stated that he is going to be subjected to a recovery process over the same subject matter that can be recovered at the end of the criminal proceedings. He states that he has an arguable appeal with high chances of success as demonstrated by the grounds listed in the draft memorandum of appeal.

    EACC argued that Kidero must satisfy the court that he has an arguable appeal, that if the orders sought are not granted, the appeal if successful will be rendered nugatory and that a third principle whether it is in public interest that the order of stay be granted.

    The agency told the court that in dismissing the application, the High Court found that the law permits concurrent criminal and civil proceedings, so no prejudice can arise against the applicant in the circumstances.

    Kidero is jointly charged together with others, with conspiracy to commit corruption contrary to section 47A (3) as read with section 48 of the Anti-Corruption and Economic Crimes Act (ACECA) over alleged loss of Sh58 million.

    They were also charged with unlawful acquisition of public property contrary to section 45(1) (a) as read with section 48 of the Anti-Corruption and Economic Crimes Act. It was alleged that the appellant unlawfully acquired Sh. 14,400,000.

  • Justice Chitembwe Kicked Out By Tribunal

    Justice Chitembwe Kicked Out By Tribunal

    A tribunal has recommended the removal of High Court Judge Justice Said Juma Chitembwe who was under investigation.

    Findings of the tribunal were presented to President William Ruto on Tuesday afternoon.

    The tribunal was appointed by President Uhuru Kenyatta in April last year to probe the conduct of Justice Chitembwe. This followed a recommendation by the Judicial Service Commission (JSC) that Justice Chitembwe be removed from office over leaked videos that depicted him in a scheme to compromise an active court case.

    President Kenyatta then suspended Justice Chitembwe and appointed the tribunal to determine his suitability to continue serving in the Judiciary over claims of gross misconduct and impropriety.

    The tribunal, which was chaired by appellate judge Mumbi Ngugi, was tasked with re-evaluating the evidence that formed basis of the Judicial Service Commission’s decision to recommend the removal of Justice Chitembwe.

    Members of the tribunal included Senior Counsel Fred Ojiambo, High Court judge Abida Ali Aroni, Labour Relations Court judge Nzioki wa Makau and lawyer James Ochieng’ Oduol.

    Other members were former Kenya Air Force Deputy Commander, Lt Gen Jackson Ndung’u, and former Teachers Service Commission chairperson Lydia Nzomo.

    The lead counsel of the tribunal was Senior Counsel Kiragu Kimani, while the joint secretaries were Mr Jasper Mbiuki and Ms Sarah Yamo. Also appointed to the tribunal Joseph Gitonga Riungu (a prosecutor working at the Office of Director of Public Prosecutions) and Edward Omotii Nyang’au (a lawyer) as the assisting counsels.

    Sonko alleged that some city lawyers received over Sh315 million to compromise his impeachment process.

    In amateur videos released by Sonko, a man purported to be Judge Chitembwe was seen receiving a bag full of money from a lawyer for the purpose of defeating justice.

    Dubbed “The Rot in the Kenyan Judiciary” the first episode of a five-part series shows the events leading to Sonko’s impeachment and Chitembwe’s alleged involvement in fraudulent dealings in his chambers.

    The petitioner claimed Chitembwe had been approached by a lawyer and Nairobi County Assembly, majority leader Abdi Guyo asking him to rule against Sonko.

    The judge allegedly requested the lawyer to make arrangements for him to meet President Uhuru Kenyatta to give his nod to impeaching Sonko.

    The lawyer allegedly confirmed that State House wanted the governor out of office.

    Wambua claimed that the lawyer was acting at the behest of Nairobi City County MCAs and a county executive committee member in a desperate bid to have his legal fees paid.

    Guyo and the lawyer reportedly visited judge Chitembwe at his residence in Mountain View Estate.

  • Could Uhuru’s Longtime Bodyguard Be Planning Retirement After Dramatic Removal From His Security Team?

    Could Uhuru’s Longtime Bodyguard Be Planning Retirement After Dramatic Removal From His Security Team?

    Rumours are rife that Uhuru’s long serving and trusted bodyguard could be contemplating early retirement after being removed from the former president’s security team in the recent swap that saw Uhuru’s security details drastically reduced.

    According to rumors circulating from friends, Kiragu who has been Uhuru’s bodyguard since his days as an MP is supposedly considering quitting the job. The bodyguard has dramatically been ordered by the government to detach from the team. The move that comes at a time when government has intensified fight against the former head of state now leaves him with a smaller number of guards.

    Its unclear why the government has gone as far as withdrawing his most loyal and longtime guards as they’re always the closest to him.

    It’s the first time in Kenya’s history that security details of a former president has been withdrawn unceremoniously. Now Uhuru doesn’t have the choice of selecting guards of his own choice and if the government wanted to spy on Uhuru then this I a gap.

    This move comes at a time when Uhuru is leading peace talks in DRC where he frequently visits the war-torn country and naturally would need more bodyguards for his own security.

    In the heights of the election campaign, President Ruto and Uhuru had bad blood that at one point Ruto claimed there was a plot to harm his family and he called Uhuru out saying he shouldn’t kill his kids.

    Uhuru now has half the number of bodyguards Moi and Kibaki had in their retirement.