Puzzle As US Fraudster Wins Sh106 Billion Tender in Kenya

How a company linked to an American convicted of defrauding investors Sh930 million secured government approval for another mega water project

A Kenyan company co-owned by a US citizen who defrauded American investors nearly Sh1 billion in a fake desalination project has received preliminary government approval for a massive Sh106 billion water contract raising serious questions about Kenya’s due diligence processes in public-private partnerships.

At the center of this controversial deal is Rasli Bahari Kenya Limited, a firm controlled by two unlikely partners: Stanley Murage, a former top aide to President Mwai Kibaki, and Verley Lee “Rocky” Sembritzky, an American businessman with a criminal record for securities fraud.

Murage, who served as Kibaki’s advisor on policy and programmes, holds a commanding 64.5% stake in the company through his investment vehicle Prime Investments Limited. Sembritzky controls 32.2% of the venture that has now secured initial approval from Kenya’s Treasury to proceed with contract negotiations for a desalination plant in Lamu.

The fraudster’s trail

Sembritzky’s involvement in the project is particularly troubling given his recent criminal history. In 2020, the US Securities and Exchange Commission (SEC) filed charges against the Texas-based businessman for operating “a fraudulent investment scheme involving a purported Kenyan desalination plant investment project” that swindled American investors out of $7.2 million (approximately Sh930 million).

The SEC found that Sembritzky used investor funds meant for a Kenyan water project to instead purchase “a car, a condo,” luxury jewelry, and watches. Of the millions raised from unsuspecting Americans, only $650,000 (Sh8.3 million) actually reached the Kenyan project.

The fraudster was ultimately ordered to pay $6.6 million in penalties and disgorgement after the SEC determined he had misled investors about how their money would be used.

Adding another layer of intrigue to the story, Rasli Bahari claims Sembritzky died in October 2022, yet the company has failed to update official records with Kenya’s registrar of companies. According to corporate lawyer Bernard Kiragu, when a shareholder dies, their shares must automatically be transferred to their estate, and the company’s official documents should reflect this change.

However, company records accessed in July 2025 still list Sembritzky as a living shareholder—a discrepancy that could constitute filing misleading statements to the registrar, an offense punishable by up to Sh1 million in fines or two years imprisonment.

“You see, a dead person cannot sign the share transfer certificate,” Kiragu explained, highlighting the legal impossibility of the current arrangement.

The Adani connection

The Sh106 billion Lamu desalination project bears striking similarities to the controversial Adani deals that were canceled by President William Ruto’s administration. Like those agreements, the Rasli Bahari contract is structured as a privately initiated proposal (PiP) under Kenya’s public-private partnership framework.

The project received initial approval from the Treasury’s Directorate of Public-Private Partnerships in December 2023 and was cleared to proceed to contract negotiations in April 2025. The plant is designed to produce 120,000 cubic meters of clean water daily for Lamu Town and surrounding areas, while also extracting and selling minerals recovered during the desalination process.

Due diligence questions

The approval of this project raises serious concerns about the quality of background checks conducted by Kenya’s PPP directorate. Despite Sembritzky’s well-documented criminal conviction and the SEC’s public findings about his fraudulent activities, the partnership received government blessing.

Company managing director David Kinyua acknowledged the controversy surrounding Sembritzky, stating that the firm is in the process of restructuring its ownership. “Together with new investors we are negotiating with, we should reach 30 percent of the total investments, which is expected to be between $500 and $600 million,” Kinyua said, adding that shareholders have already invested approximately $20 million in the project.

Murage factor

Stanley Murage’s involvement adds another dimension to the story. As Kibaki’s former “Advisor on Policy and Programmes,” Murage held significant influence during the previous administration and has remained active in major infrastructure deals since leaving government.

In 2017, Murage led a consortium seeking to purchase an 80% stake in Rift Valley Railways for Sh13.3 billion, demonstrating his continued appetite for large-scale infrastructure investments.

This case highlights broader systemic issues in Kenya’s approach to vetting international partners for major infrastructure projects. The government’s recent troubles with Adani Group which saw multiple billion-shilling deals canceled amid corruption allegations, should have heightened scrutiny of similar arrangements.

Yet the Rasli Bahari approval suggests that adequate safeguards may still be lacking in the PPP approval process, particularly when it comes to conducting thorough background checks on foreign investors with criminal histories.

As Rasli Bahari moves toward final contract negotiations with the government, several critical questions remain unanswered:

– How did a company with a convicted fraudster as a major shareholder pass government vetting?

– Why hasn’t the company updated its official records if Sembritzky is indeed deceased?

– What additional oversight will be implemented to prevent similar partnerships in the future?

The Treasury and PPP directorate have yet to respond to questions about their due diligence processes, leaving taxpayers to wonder whether lessons have been learned from previous controversial deals.

With Kenya’s public debt burden already straining government finances, the country can ill afford another infrastructure scandal. The Rasli Bahari case serves as a stark reminder that robust vetting procedures aren’t just bureaucratic formalities, they’re essential safeguards protecting public resources from those who would exploit them.