Kenya Insights

Tag: parliament

  • Why CMA Faces Investigations

    Why CMA Faces Investigations

    The Capital Markets Authority (CMA) is now staring at parliamentary scrutiny for failing to protect investors, following the proliferation of unregulated and illegal investment funds that have led to loss of investor funds in the country.

    Garissa Township MP Aden Duale has asked the Finance and National Planning Committee to probe the CMA after investors cried foul over unfulfilled promises over the much hyped Cytonn High Yield Solutions (CHYS), offered by Cytonn Investments Limited.

    Cytonn which has for ages marketed the funds as private placements, a closed shop of a few sophisticated investors, limited to 100 investors and didn’t fall under CMA’s radar. However, court filings indicated that Cytonn had raised money from 3,000 investors in breach of regulations that demand funds raised through private placements limits to no more than 100 people.

    The Garissa town legislator also indicated various instances which he claimed was a backslide of the CMA to regulate the capital markets effectively in total disregard of Section 11 of the Capital Markets Act.

    Over time, investor confidence has been eroded on Kenya’s capital markets, with most investors sharing the sentiments that the Capital Markets watchdog has done little in terms of protecting the retail investors. In recent times however, CMA has taken regulatory action against some of the capital markets illegalities, the most recent being over the Kenol Kobil insider trading.

    In addition, the suspension of Deacons, Kenya Airways, ARM Cement, National Bank and briefly Nairobi Business Venture, Marshals East Africa, Atlas, African Lakes Corporation (Africa Online) and Unilever, all have shaken investor confidence, which CMA is ultimately mandated to protect.

    MP Duale’s Citations Over CMA
    • The 2005 Imperial Bank corporate bond valued at Kes 2.0 billion to bondholders which was issued despite having ongoing financial fraud within the bank.
    • Clearing Chase Bank to issue Kes 4.8 billion worth of bonds in 2005, after which the bank fell into receivership.
    • Nakumatt Holdings Supermarkets Kes 4 billion commercial paper issuance in 2018. (In default)

    Aden Duale, now wants the CMA to disclose the total number of unregulated capital market products in the country including the number of invested persons and the role of the regulator in the proliferation of illegal investment funds.

    Further to this, the legislator also wants the effectiveness and efficiency of the CMA established and the total number of firms penalized in last five years including remedial actions issued by the regulator listed

  • How MPs Loot Using Fake Mileage Claims

    How MPs Loot Using Fake Mileage Claims

    The Parliamentary Service Commission (PSC) is on the spot over Sh16.6 million paid to three MPs irregularly.

    The three lawmakers blew out Sh16.6 million in triple payments for domestic travel, mileage claims and overseas travel, all done in the same day.

    The three MPs were paid Sh11,392,479 in domestic travel and subsistence in respect of mileage claims.

    “However, no explanation was provided as to why three Members were paid twice or thrice for the same date of travel,” Nancy Gathungu, the Auditor-General said in a report to Parliament.

    Ms Gathungu said further examination of payments for claims by MPs for mileage and domestic subsistence facilitation revealed instances where some legislators were paid domestic subsistence facilitation and mileage claims amounting to Sh5,219,357 on days when they were outside the country and already receiving foreign subsistence allowances.

    “In the circumstances, the propriety of the expenditure of Sh11,392,479 and Sh5,219,358 included under domestic travel and subsistence in the statement of receipts and payments for the year ended June 30, 2020 could not be determined,” Ms Gathungu said.

    The Treasury has allocated Parliament Sh37.7 billion in the current financial year.

    MPs are ordinarily reimbursed weekly mileage of about 18,000 per kilometre for return trip per kilometre depending on the distance covered. Those travelling long distance like Mandera, Lamu, Garissa Wajir, and Turkana pocket more than Sh1 monthly.

    Mileage reimbursement is usually claimed Monday to Friday by MPs also draw Sh5,000 per committee sitting, while chairman laughs all the way to the bank with Sh15,000. Vice chairpersons draw Sh7,500.

    Other perks include domestic subsistence (Sh19,000), house allowance (Sh2000,000). And Medical (Sh10 million) among others.

    In a qualified audit opinion for the year ended June 30, 2020 Ms Gathungu said the PSC spent Sh303,881,415,626 in respect of use of goods and services.

    “As disclosed under Note 4 to the financial statements, the expenditure includes an amount of Sh1,395,384,441 relating to domestic travel and subsistence out of which Sh11,392,479 was paid to the Members in respect of mileage claims.

    “However, no explanation was provided as to why three Members were paid twice or thrice for the same date of travel,” she said.

    She said examination of payments for claims by Members for mileage and domestic subsistence facilitation revealed instances where some Members were paid domestic subsistence facilitation and mileage claims on days when they were outside the country and already receiving foreign subsistence allowances.

    “The irregular payments had not been recovered by the time of the audit in December, 2020.

    “In the circumstances, the propriety of the expenditure of Sh11,392,479 and Sh5,219,358 included under domestic travel and subsistence in the statement of receipts and payments for the year ended 30 June, 2020 could not be determined,” Ms Gathungu said.

    Source: BD.

  • DCI Probe Into Fatuma Gedi’s Leaked Porn Hits A Dead End

    DCI Probe Into Fatuma Gedi’s Leaked Porn Hits A Dead End

    In February, DCI had summoned two MPs, Eldas MP Adan Keynan and his Fafi counterpart Abdikarim Osman Mohamed on allegations that defamed Wajir Woman Representative Fatuma Gedi using a leaked sex tape.

    The two were to record their statements with the anti-crime watchdog alongside Isiolo Woman Representatives Rehema Jaldesa, and controversial Kirinyaga Woman rep, Wangui wa Ngirici.

    “I have not received any summon from the DCI nor the police. They all know where to find me but no one has communicated with me so far regarding the purported summon,” Mr Osman was quoted saying this in an interview with a local press on 25th February this year.

    In the video that emerged online last December, the alleged Wajir Woman Representative Fatuma Gedi was filmed having coitus. She  however, vehemently denied that she was the said woman in the video.

    Fatuma Gedi termed the leaked tape as evil-work of her political backbiters in the National Assembly as well as in Isiolo, her county, and sought a legal recourse.

    In March, the DCI requasted Michael Sialai, the clerk of the National Assembly to inform the four to report at the DCI headquarters to record their statements regarding the tape.

    However, the Legal Counsel for the Directorate of Litigation and Compliance at Parliament, Josephat Kuyoni directed the clerk to not honour the DCI’s request as it falls out of the scope of Parliament.

    “Based on the abovementioned case under investigation, in the face of it, it does not arise from the performance of duties of a member of parliament. As such we recommend that the DCI correspond with the said members individually,” the parliamentary legal counsel said in a memo.

    And earlier today, DCI Boss George Kinoti said that detectives are unable to question 4 MPs over fake porn video about Fatuma Gedi due to Parliamentary privileges they are enjoying.