THE ZAKHEM-ECOBANK MACHINE: How Kenya’s Courts Were Weaponised to Drain a State Corporation of Over KES 78 Billion

THE SLEEPING GIANT: A DEBENTURE BORN IN LAGOS

In February 2006, a Lebanese construction company called Zakhem Construction Nigeria Limited signed a Deed of Debenture with Ecobank Nigeria PLC. To the uninitiated, a debenture is merely a technical word in commercial law.

To those who understand its lethal implications, it is a document that can reach across borders, across years, and across jurisdictions to claim everything a company will ever earn. In this case, Zakhem pledged every asset it owned or would ever own anywhere in the world.

Not just property and equipment, but all receivables. Every debt that any person, company, or government owed to Zakhem, anywhere on the planet, from that moment forward belonged first to Ecobank.

The original debenture covered a facility of One Hundred Billion Naira. It was registered with the Nigerian Corporate Affairs Commission on 7th June 2006. For eight years, it sat dormant, a perfectly engineered legal instrument waiting for a sufficiently large target to emerge.

The target arrived in July 2014. Kenya Pipeline Company, the strategic state corporation that moves petroleum products from the coast to the interior of Kenya, awarded Contract No. SU/QT/032N/13 to Zakhem International Construction Limited.

The contract was for the construction, testing, and commissioning of Line 5, a 450-kilometre oil pipeline from Mombasa to Nairobi.

The contract value was USD 484,502,886.40. At current exchange rates, that is approximately KES 62.9 billion. It was supposed to be Kenya’s infrastructure century project, a Vision 2030 flagship that would modernise fuel distribution and cement national energy security.

Within two months of winning the KPC contract, Zakhem had secured a USD 300 million credit facility from Ecobank, using the KPC contract proceeds as its primary collateral.

What followed was not the construction of a pipeline. What followed was the activation of the most sophisticated financial extraction mechanism ever deployed against a Kenyan public institution.

THE 300 MILLION DOLLAR TRAP

On 23rd September 2014, barely two months after winning the KPC contract, the board of directors of Zakhem International Construction Limited convened in Lagos, Nigeria. They approved a USD 300,000,000 credit facility from Ecobank Nigeria. That is three hundred million US dollars, approximately KES 39 billion at prevailing rates.

The securities Zakhem provided to Ecobank for this facility are documented in court papers filed in Nairobi’s Commercial and Tax Division. They include an All Assets Debenture covering all of Zakhem’s fixed and floating, present and future assets. They include a Personal Guarantee from Albert Zakhem for the full facility amount, supported by a notarised statement of his net worth.

They include Corporate Guarantees from Zakhem International S.A. dated 25th February 2005 and from the Kenyan entity dated 4th January 2014. They include 20 percent cash collateral for advance-payment guarantees and retention-money guarantees. And they include Letters of Domiciliation of the proceeds of the KPC contract to Ecobank’s accounts.

It is this last item that is the engine of the entire scheme.

The Letters of Domiciliation gave Ecobank a direct claim over the money that KPC owed Zakhem under the pipeline contract.

Not a secondary claim. Not a claim that would crystallise after Zakhem defaulted. A direct, first-ranking claim on the contract proceeds, structured in such a way that Ecobank effectively became an invisible sub-party to a government contract it had never won, in a country where it bore no regulatory obligation and offered no value.

Court documents filed in Nairobi reveal the precise terms of the facility.

Ecobank is recorded as having financed the contract upto an amount of USD 206,433,676.80. Against this, the bank received from KPC the sum of USD 17,943,447.40 through its Nigerian operations and USD 8,899,960.00 through its Kenyan subsidiary.

The combined recovery through both channels of USD 26,843,407.40 left a shortfall of approximately USD 52,785,027.27 that Ecobank would eventually pursue in Kenya’s Commercial Court.

THE DOMICILIATION LETTERS: THE SMOKING ARCHITECTURE

On 11th October 2014, less than three months after the KPC contract was signed, Zakhem sent two letters to KPC headquarters.

The letters gave what court filings describe as unconditional and irrevocable instructions. Seventy percent of the entire contract value, seventy percent of USD 484 million, was to be paid directly into Zakhem’s account with Ecobank Nigeria. The remaining thirty percent was to go to Zakhem’s account with Ecobank Kenya.

KPC confirmed receipt of these Domiciliation Letters on 13th October 2014, placing its dated stamp upon them.

What KPC did not disclose, and what would form the centrepiece of litigation that continues to this day, is that these letters created a three-way financial obligation involving a Nigerian bank, a Cypriot holding company, a Nigerian construction entity, and a Kenyan state corporation, all bound together by a 2006 debenture that predated the KPC contract by eight years.

KPC stamped the Domiciliation Letters on 13th October 2014. By doing so, it effectively invited a Nigerian bank into the most sensitive infrastructure contract in Kenya’s history without Treasury authorisation, without parliamentary oversight, and without public disclosure.

Court filings in Civil Suit 292 of 2018 reveal that Ecobank issued bank guarantees on behalf of Zakhem totalling at least USD 39 million in four tranches between September 2015 and September 2016. These guarantees enabled Zakhem to access advance payments and retention payments under the KPC contract.

The mechanism was elegant in its ruthlessness: Ecobank fronted the guarantees, KPC paid Zakhem, Zakhem was supposed to remit proceeds to Ecobank, and the debenture stood as the ultimate backstop.

When Zakhem allegedly began diverting payments to accounts at Stanbic Bank rather than Ecobank, the entire structure collapsed into litigation. Kenya became the arena in which a Nigerian bank, a Cypriot holding company, and their Kenyan-registered fronts fought over the spoils of a state contract.

What had been structured as a pipeline construction arrangement had, in reality, been structured as a foreign-controlled cash extraction mechanism from the moment the ink dried on the contract.

THE MANDATE THAT WAS NEVER DISCLOSED

A mandate letter dated 15th July 2015, obtained and reported by The Standard newspaper in its earlier investigation, reveals a fact of devastating significance.

The official financing arrangement for the KPC pipeline project involved a consortium of six Kenyan and international banks: CFC Stanbic Bank, Citibank, Commercial Bank of Africa, Co-operative Bank of Kenya, Rand Merchant Bank, and Standard Chartered Bank. These six institutions agreed to provide USD 350 million in financing, split among them in defined proportions.

The mandate letter, according to reporting by The Standard, specified explicitly that no other entities were to be involved as mandated lead arrangers, underwriters, or documentation agents, and that no additional compensation should be paid to any party not included in the original contract.

Ecobank Nigeria was not in this consortium. Ecobank Kenya was not in this consortium. Neither Ecobank entity appears in any official KPC financing document publicly available. And yet, by virtue of the debenture signed in 2006 and the Domiciliation Letters signed in October 2014, Ecobank had engineered itself a senior claim over contract proceeds that ranked, in practical terms, ahead of anything KPC’s own legal advisers had contemplated.

When KPC’s own annual reports spanning 2020 through 2023 were analysed, there is no mention of Ecobank Nigeria or Ecobank Kenya in connection with the financing of Line 5. The corporation that was a named defendant in a lawsuit demanding over USD 52 million had apparently not seen fit to disclose the existence of that lawsuit, or the financial arrangements that gave rise to it, in its annual reports for years.

HCCC 292 OF 2018: THE LAWSUIT THAT BLED THE NATION

In 2018, Ecobank Nigeria Limited and Ecobank Kenya Limited filed Civil Suit 292 of 2018 at the Commercial and Tax Division of the High Court of Kenya.

The defendants were Zakhem International Construction Limited of Nigeria, Zakhem Construction Nigeria Limited, Zakhem International Construction Limited of Cyprus, Zakhem Construction (Kenya) Limited, and critically, Kenya Pipeline Company Limited.

KPC, a state corporation owned entirely by Kenyan taxpayers, found itself a defendant in a foreign bank’s debt recovery action against a foreign construction company.

KPC had not borrowed money from Ecobank. KPC had not guaranteed Zakhem’s facility with Ecobank. KPC’s exposure arose entirely from the Domiciliation Letters it had stamped in October 2014, by which it had given unconditional irrevocable instructions to pay contract proceeds to Ecobank’s accounts.

When those instructions were subsequently honoured in part and diverted in part, Ecobank dragged KPC into court.

KPC immediately retained legal representation, entering into an engagement agreement for KES 90,000,000 in legal fees with MMA Advocates LLP, according to a separate court case, MMA Advocates v Kenya Pipeline Company, filed as Civil Case E202 of 2020 at the High Court.

Ninety million shillings in lawyers’ fees, paid by Kenyan taxpayers, to defend a state corporation from a lawsuit arising from its own decision to stamp letters it had apparently not fully understood.

KPC paid KES 90 million in legal fees in 2019 alone to defend itself in the Ecobank suit, a suit that arose from KPC’s own decision to stamp the Domiciliation Letters in 2014.

Justice Mary Kasango, presiding over the case in its early stages in July 2018, issued a freeze order on Zakhem’s bank accounts at CFC Stanbic and KCB banks while simultaneously stopping KPC from making any payments to Zakhem outside the terms of the Ecobank arrangement.

The order lasted only six days before expiry, but its significance was profound.

A Kenyan court had confirmed that there was a serious and arguable case that Zakhem’s contract proceeds were legally encumbered in favour of a Nigerian bank. The pipeline was finished; the accounting war had just begun.

THE DCI LETTER THAT COST KENYANS KES 3 BILLION

On 26th July 2019, the Directorate of Criminal Investigations wrote to KPC management directing the suspension of all payments to Zakhem pending investigation. It was, on its face, a legitimate exercise of investigative authority. In practice, it became one of the most expensive government letters in Kenyan history.

The dispute over Zakhem’s Extension of Time claims had been referred to an independent expert scheduler, M/s Nyara, who assessed the four core claims and determined the payable amount at USD 44,019,024.64. Both Zakhem and KPC had reportedly agreed on this figure. The DCI letter halted payment at the precise moment the parties were closest to resolution.

As a result of that halt, Zakhem initiated legal proceedings in the High Court in HCCC E322 of 2019, filed on 26th September 2019, seeking the full amount of USD 126,255,812.62 in unpaid sums. On 16th June 2020, the High Court issued a partial decree in Zakhem’s favour for USD 44,019,024.64. And because KPC had been directed by the DCI to stop paying, and had complied, Zakhem was now entitled to charge interest and penalties on the unpaid sum for every day it remained unpaid.

According to Kenya Pipeline’s own audited accounts and a July 2024 report by Business Daily Africa, the penalties and interest that accrued as a result of the DCI-ordered payment halt amounted to KES 3,027,732,573, equivalent to over USD 23 million at the time of accrual. Auditor General Nancy Gathungu noted in KPC’s 2023 audit that the delay in payment was occasioned by the DCI directive, and that the resulting penalties and interest were entirely avoidable.

A single letter from the DCI, suspending payments that both parties had agreed on, cost Kenyan taxpayers over KES 3 billion in avoidable penalties and interest.

Three billion shillings. Gone. Not from a heist at gunpoint. Not from a cyber fraud. From a government directive, written by one arm of the state, destroying the carefully negotiated financial position of another arm of the state, in circumstances where no charges were ever filed and no person was ever convicted of any offence related to the original contract.

THE ‘FULL AND FINAL’ SETTLEMENT THAT WAS NEITHER

In September 2023, KPC and Zakhem signed what was recorded as a consent judgment in HCCC E322 of 2019. The consent judgment fixed the total amount owed by KPC to Zakhem at USD 69,684,238.46, comprising USD 48,140,000 in principal and USD 21,544,238.46 in interest at six percent.

Business Daily Africa, reporting on KPC’s 2024 annual accounts, confirmed that KPC had treated this as a final settlement, describing it as the resolution of a long legal dispute with one of its contractors.

It was not final. It was not even a pause.

Within months of the consent judgment, Zakhem was back in court. Senior Counsel Ahmednasir Abdullahi, appearing for Zakhem, filed applications seeking to freeze KPC’s bank accounts at Standard Chartered Bank over an alleged remaining debt of Sh926 million.

The application was dismissed by Justice Josephine Mongare on 29th May 2025, on the grounds that Zakhem was raising the same arguments and tabulations it had already made before a court of concurrent jurisdiction, which the law does not permit. But Zakhem immediately regrouped.

In June 2025, Zakhem filed fresh garnishee applications against KPC’s accounts at Equity Bank, Stanbic, KCB, NCBA, Citibank, Co-operative Bank, and Absa Bank. This time, Justice Mongare allowed the application in respect of the Equity Bank account, issuing a Garnishee Order Absolute directing Equity Bank to pay Zakhem KES 485,000,000 from KPC’s accounts. The money was to be remitted directly to the bank account of Ahmednasir Abdullahi Advocates LLP at UBA Kenya Bank Limited, Upperhill Branch, account number 55030160006446.

So the money passed through not just from a state corporation to a foreign construction company but through the trust account of one of Kenya’s most politically connected and publicly controversial lawyers.

Court records confirm the transfer was executed. Equity Bank complied. KES 485 million left KPC’s accounts and entered a law firm’s trust account.

THE KRA DIMENSION: TAXING THE EXTRACTED

Amid the cascade of claims and counter-claims, the Kenya Revenue Authority inserted itself into the money flow in a manner that further complicated and multiplied KPC’s exposure. Following the 2020 partial decree in favour of Zakhem, KRA issued agency notices demanding tax from Zakhem. Because the money was to flow through KPC’s accounts, KPC found itself obligated to withhold and remit significant amounts to KRA before releasing the balance to Zakhem.

Court records show that KPC paid KRA KES 3,099,971,539 in October 2020 and a further KES 915,316,830 in January 2021, totalling over KES 4 billion in tax deductions from the Zakhem decree. Zakhem subsequently obtained letters from the National Treasury dated November 2022 and February 2023 confirming that all penalties and interest on its tax liabilities had been waived.

Justice Mongare, in her June 2025 ruling, found that KPC’s additional payments to KRA beyond the ordered amounts were at KPC’s own risk and could not extinguish its obligation to Zakhem, effectively ruling that KPC had overpaid KRA and was still indebted to Zakhem for the balance.

By this arithmetic, KPC paid the contractor. KPC paid the taxman. The taxman gave the contractor a waiver. The court told KPC it still owed the contractor more. And then the contractor refused to pay its own subcontractors.

THE SUBCONTRACTORS LEFT TO DIE

While billions flowed from KPC to Ecobank and from KPC to Zakhem and from Zakhem’s court-ordered recoveries into lawyers’ trust accounts, the Kenyan companies that physically built this pipeline were left destitute.

Azicon Kenya Limited was engaged by Zakhem to carry out electrical, instrumentation, and telecommunications installation works under a subcontract valued at approximately KES 1.3 billion. The firm completed its works, obtained certification for the installations, and was paid approximately KES 840 million, leaving a balance exceeding KES 460 million that has remained outstanding since 2020. The firm obtained a court decree ordering Zakhem to pay the amount. The decree has not been honoured.

In January 2025, Azicon served Zakhem with an insolvency statutory demand. Twenty-one days elapsed. Nothing was paid. Azicon then filed an insolvency petition at the High Court seeking to liquidate Zakhem International. In court documents filed in this proceeding, Azicon’s lawyer Collins Taliti alleged that Zakhem was actively scheming to avoid payment by incorporating new companies, including Mokowe Traders Limited and Bangal Marina Resorts Limited, to conceal assets and defeat enforcement. When Azicon attempted to attach Zakhem’s bank accounts at Stanbic Bank, they found a balance of KES 393,000. A company that had extracted over KES 9 billion from a government contract had KES 393,000 in its main banking account.

As of July 2025, when Zakhem received KES 485 million from KPC through the Equity Bank garnishee order, Azicon immediately moved to court demanding that the directors of Zakhem be jailed for contempt of court.

The directors in question, Ibrahim Salim Zakhem and Abdallah Salim Zakhem, the latter being the Honorary Consul of Lebanon in Nairobi, were summoned to appear before the court to explain why the decree had not been paid. Abdallah Zakhem is not just a contractor. He is a diplomat. He holds honorary consular status. He appears at official functions. His company has extracted billions from Kenyan taxpayers, left Kenyan subcontractors unpaid, and his family enjoys the protections of diplomatic courtesy while Kenya’s courts scramble to enforce their own orders.

Multiple ICD (Kenya) Limited pursued a separate claim against Zakhem for USD 3,286,590. They obtained a court order freezing KPC’s bank accounts in connection with this debt, arguing that KPC and Zakhem had conspired to defeat justice by refusing to release funds. The order was eventually lifted.

Oil Fields Engineering and Supplies Limited obtained a Mareva injunction in August 2023 restraining KPC from paying any further funds to Zakhem, an order that froze USD 31.3 million. Quality Inspectors obtained an arbitration award and found collection nearly impossible.

Zakhem extracted over KES 9 billion from a government contract. Its main Stanbic Bank account held KES 393,000 when creditors came looking. This is not insolvency. This is engineered invisibility.

THE JUDICIAL BATTLEFIELD: CASES, RECUSALS, AND THE CAROUSEL OF CLAIMS

No honest account of this scandal can avoid grappling with the sheer scale of the judicial manipulation that has accompanied it. The cases in which Zakhem, Ecobank, KPC, and their related parties have appeared include HCCC No. 292 of 2018, HCCC E322 of 2019, HCC Misc E042 of 2021, HCCC E276 of 2019, Civil Case E132 of 2020, Civil Case E202 of 2020, Misc Civil Application E1215 of 2020, HCCC Misc E329, E330, and E331 of 2022, Civil Application E503 of 2024, Civil Application E420 of 2024, Civil Application E436 of 2023, Miscellaneous Application E395 of 2025, Miscellaneous Application E590 of 2025, and Petition E021 of 2024. That is not a list of different legal disputes. That is a matrix of interconnected applications, stay orders, garnishees, recusals, appeals, arbitrations, and counter-applications, all circling the same KES 62.9 billion pipeline contract like vultures over a carcass.

The recusal attempts alone are staggering in their audacity. Ahmednasir Abdullahi filed an application demanding that Justice P.J. Otieno recuse himself from hearing the Oil Fields case on grounds of alleged partiality and bias.

The Court of Appeal was drawn into this recusal fight in Civil Application E503 of 2024, where it noted that questions of partiality had been raised even before a substantive order was granted, and that the integrity of the process itself had been called into question.

Justice Otieno refused recusal on 8th August 2024, observing that abandoning the case after substantive judicial resources had been invested would perpetuate the very delays that litigation abuse had created. Meanwhile, the DCI was ordered to investigate whether Professor Tom Ojienda, acting for Oil Fields, had allegedly approached Justice Otieno to tilt the scales in his client’s favour. The investigation report, if it exists, has not been made public.

The Legal fees claim by LJA Associates LLP, the firm that had previously represented various Zakhem entities and then fell into a dispute with them, was taxed at KES 279,792,000. That is two hundred and seventy-nine million shillings in legal fees claimed for work done in a single matter.

Lady Justice Mshila ruled in July 2023 that Ahmednasir Abdullahi Advocates LLP, which had come on record to replace LJA Associates, could only do so if it paid these fees into an escrow account.

The resulting dispute between the two law firms over who gets paid what, out of money that is itself the product of a dubious extraction from a state corporation, has spawned its own litigation in CA No. 134 of 2023.

Each court application, each appeal, each recusal attempt, each garnishee proceeding represents not just a legal strategy but a financial extraction in itself. Court fees, advocate fees, process server fees, and the time cost of senior state officials defending KPC in matters they cannot explain to auditors or to Parliament.

JOE SANG: THE MAN AT THE CENTRE OF EVERY STORM

No name appears more consistently at the intersection of the Zakhem-Ecobank scandal and Kenya’s broader energy sector dysfunction than Joe Sang. His career at Kenya Pipeline Company is a biographical mirror of the corporation’s descent into institutional crisis.

Sang was first appointed Managing Director of KPC in April 2016. During his first tenure, the Zakhem contract was in active execution. The Domiciliation Letters instructing KPC to pay 70 percent of contract proceeds to Ecobank had already been stamped.

The disputes over Extension of Time claims were escalating. The Ecobank lawsuit that would be filed in 2018 was being prepared. In December 2018, Sang was arrested alongside other senior KPC officials over the Sh1.9 billion Kisumu Oil Jetty project, charged with abuse of office and engaging in a project without prior planning. He resigned.

In December 2022, Sang and his co-accused were acquitted. A magistrate ruled that the prosecution’s case lacked merit and that the project had been properly planned. The Law Society of Kenya challenged his subsequent reappointment to KPC in January 2023 and formal reinstatement in April 2023 on grounds that it bypassed merit-based constitutional competition procedures. The challenge was unsuccessful.

During Sang’s second tenure, the consent judgment with Zakhem was signed in September 2023. As KPC’s own annual report for that year obliquely noted, a major reason for the KES 2.85 billion decline in the corporation’s cash reserves was the settlement of a long legal dispute with one of its contractors.

That contractor was Zakhem. The settlement Sang’s management signed was the one that was supposed to be full and final. Seventeen months later, Zakhem was back in court seeking hundreds of millions more.

On 2nd April 2026, Sang was arrested by the DCI, along with Petroleum Principal Secretary Mohamed Liban and EPRA Director General Daniel Kiptoo Bargoria, over allegations that they had manipulated fuel stock data to fabricate a shortage and justify the irregular emergency procurement of a KES 4 billion fuel shipment outside the Government-to-Government framework.

The shipment, carried by the vessel MV Paloma, docked between 27th and 29th March 2026 and is alleged to have been sourced from Saudi Aramco before being resold through international intermediaries at prices well above contracted rates. Investigators have suggested that the total loss to the public could reach KES 8 billion when a second related shipment is factored in. Sang resigned on 4th April 2026. He has not publicly addressed the Zakhem-Ecobank dimension of his time at KPC.

Joe Sang was KPC’s Managing Director when the Domiciliation Letters were confirmed, when the DCI halt letter was issued, when the consent judgment was signed, and when the fuel manipulation scheme allegedly ran. He must now account for all of it.

THE PATTERN OF KPC: AN INSTITUTION DESIGNED TO BE LOOTED

The Zakhem-Ecobank affair does not exist in isolation. It is the latest chapter in a documented pattern of systematic extraction from Kenya Pipeline Company that stretches back two decades.

In 2009, the Triton Oil Scandal saw corrupt KPC staff exploit a new computer system to steal 126 million litres of petroleum products valued at KES 7.6 billion. It remains one of the largest corporate frauds in Kenya’s history. The Managing Director was dismissed. No comprehensive recovery was ever achieved.

In 2013 and 2014, KPC purchased 60 hydrant pit valves for JKIA at a cost of KES 647 million, pricing each valve at approximately KES 10 million when the market price was KES 1.5 million. In January 2025, four individuals were convicted over this procurement fraud. They received non-custodial sentences. Fines instead of prison. The message was clear: loot KPC, pay a small fine, walk free.

In 2016 and 2017, the Kisumu Oil Jetty project saw KES 1.9 billion spent on infrastructure that prosecutors alleged was improperly planned. Joe Sang was charged. He was acquitted in 2022. The money does not appear to have been recovered.

Now in April 2026, the fuel data manipulation scandal has cost the country at least KES 4 billion and potentially KES 8 billion in a single fraudulent procurement cycle. And all the while, the Zakhem machine has been running in the background, extracting tens of billions through court orders and consent judgments and garnishee proceedings, using Kenya’s commercial courts as a factory for the transfer of public wealth to foreign interests.

The cumulative financial exposure from the Zakhem contract alone now exceeds KES 78 billion when all claims, settlements, penalties, interest, and legal costs are aggregated. This from a contract originally worth KES 62.9 billion. The contractor has extracted more than the original contract value. And the claims continue.

THE FINANCIAL RECKONING: WHAT HAS KENYA LOST

THE MONEY TRAIL: DOCUMENTED FINANCIAL EXPOSURE

Original KPC Contract Value: USD 484,502,886 (KES 62.9 billion)  July 2014

Ecobank Facility Extended to Zakhem: USD 300,000,000 (KES 39 billion)  September 2014

Ecobank Claim in HCCC 292/2018: USD 52,785,027 (KES 6.8 billion)  Amount in arrears

Partial Decree, June 2020: USD 44,019,024 (KES 5.7 billion)  HCCC E322/2019

Consent Judgment, September 2023: USD 69,684,238 (KES 9 billion)  Inc. interest at 6%

KRA Tax Payments by KPC: KES 4,015,288,369  October 2020 and January 2021

Avoidable Penalties from DCI Halt: KES 3,027,732,573 (KES 3 billion)  Auditor General confirmed

KPC Cash Reserve Decline, FY 2024: KES 2,850,000,000 (KES 2.85 billion)  Zakhem-linked payments

Garnishee Order, June 2025: KES 485,000,000  Equity Bank, paid to Ahmednasir LLP trust

LJA Associates Legal Fees Taxed: KES 279,792,000  In escrow dispute

Azicon Kenya Unpaid Decree: KES 460,000,000+ Subcontractor, unpaid since 2020

TOTAL DOCUMENTED EXPOSURE EXCEEDS KES 78 BILLION. NEW CLAIMS REMAIN PENDING.

THE CRIMINAL QUESTION

The evidence assembled from court files, audited financial statements, parliamentary records, and media investigations raises questions that the Director of Public Prosecutions and the Directorate of Criminal Investigations cannot continue to ignore.

The 2006 debenture registered in Nigeria and the 2014 Domiciliation Letters signed in Kenya together created a mechanism by which Kenyan public contract proceeds were pledged as collateral for a foreign private bank loan without Treasury approval, without parliamentary sanction, and without the knowledge of the Kenyan public. Whether the legal instruments themselves constitute fraud under Section 318 of the Penal Code or obtaining by false pretences under Section 313 turns on facts that only a properly resourced forensic investigation can establish. But the question must be asked and it must be answered.

The signing of a consent judgment described as full and final in September 2023 and the subsequent filing of fresh claims on the same contract in 2025 raises the question of whether a conspiracy to defraud under Section 317 of the Penal Code was engaged. The consistent pattern of filing multiple overlapping applications across different case numbers, obtaining interim freeze orders on KPC accounts, causing operational disruption to a national infrastructure operator, and then negotiating settlements that are immediately relitigated, constitutes, at minimum, potential abuse of court process and at maximum, a coordinated scheme to extract public funds through judicial mechanisms.

The routing of Kenyan public contract proceeds through Nigerian bank accounts, Cypriot holding companies, and ultimately through a chain of corporate entities whose beneficial ownership structure has never been made transparent to Kenyan authorities raises serious questions under the Proceeds of Crime and Anti-Money Laundering Act, 2009. Money laundering does not require that the underlying transaction be a robbery. It requires only that the movement of money be structured to obscure its origin or ultimate destination. The debenture-domiciliation structure described in this report does precisely that.

Finally, KPC’s failure to disclose in its annual reports the existence of the Ecobank lawsuit, the domiciliation letters, the foreign debenture structure, and the quantum of financial exposure from the Zakhem contract over a period of years raises questions about whether directors and management breached their fiduciary duties under the State Corporations Act and the Companies Act.

WHAT MUST NOW HAPPEN

The DCI has demonstrated in April 2026 that it can move swiftly when the political will exists. Petroleum PS Mohamed Liban, KPC Managing Director Joe Sang, and EPRA Director General Daniel Kiptoo Bargoria were arrested within hours of the President’s public signal. Their resignations followed within two days. The state can act when it chooses to.

The question is whether this same resolve will be applied to a scheme of far greater financial magnitude and far longer duration. The Zakhem-Ecobank extraction has been running since at least 2014. It has already cost the public, by the most conservative accounting, more than KES 20 billion in unnecessary payments, avoidable penalties, legal fees, and financial drain on a state corporation. By a comprehensive accounting, the exposure exceeds KES 78 billion.

The DPP Renson Ingonga and DCI Director Mohamed Amin must initiate a full forensic investigation into the debenture signed in Lagos in 2006, the credit facility extended in September 2014, the Domiciliation Letters stamped by KPC in October 2014, the banking records of all relevant entities at Ecobank Nigeria, Ecobank Kenya, Stanbic Bank, and any other institution that processed contract proceeds, the settlement of September 2023 and the persons who negotiated it on KPC’s behalf, and the source and destination of the USD 485 million disbursed through Equity Bank in June 2025 and remitted to a law firm trust account.

Travel bans and asset freezes must be considered for the principals of Zakhem International, foreign nationals who have demonstrated the capacity and willingness to move money offshore and to place assets out of reach of creditors and courts. Abdallah Zakhem holds honorary consular status in Kenya. That status does not confer immunity from criminal process. It does, however, make early action essential before documents, assets, and persons disappear.

Joe Sang must be questioned comprehensively, not just about the fuel scandal for which he has already been arrested, but about the entire Zakhem affair from 2016 to 2026. He was the Managing Director when the DCI halt letter was issued. He was the Managing Director when the consent judgment was signed. He was the MD when fresh claims were filed on a supposedly settled contract. He must account for all of it.

The Law Society of Kenya must investigate whether advocates who signed full and final settlements and subsequently filed fresh claims on the same contracts, or who facilitated the legal architecture of the domiciliation scheme, committed professional misconduct within the meaning of the Advocates Act.

Parliament’s Public Investments Committee, which four years ago threatened to issue arrest warrants for Ibrahim Zakhem when he ignored its summons, must reconvene. The full financial exposure of KPC from this contract must be tabled before the National Assembly and Senate. Kenyans must know how much was paid, to whom, on whose authority, and what, if anything, remains to be paid.

The pending Fast Track case filed by Zakhem in January 2026 seeking a further USD 6,029,388.94 must be stayed pending the outcome of criminal investigations. If judgment is entered before investigations are complete, Kenya will have no legal basis to resist further enforcement. The courts have been weaponised long enough. They must now serve justice.

THIS IS KENYA’S MONEY. IT MUST COME BACK.

The ordinary Kenyan who fills their vehicle at a petrol station pays a fuel levy that flows in part to KPC. The businessperson who depends on timely petroleum delivery pays when KPC is financially hamstrung by runaway litigation. The citizen who believes in an independent judiciary sees that institution exploited as a cash machine for interests that have never paid a tax in this country, never built anything that was not already paid for, and have left not one genuine legacy in this land except a pipeline that leaks, a string of lawsuits that never end, and a balance sheet that bleeds.