State paid Sh120m commitment fee to Anglo Leasing firms, court told

The government paid Sh120 million commitment fee to Anglo Leasing companies 12 years ago, a witness told a Nairobi court yesterday.

Producing vouchers showing the payment, Monica Muthoni, the chief accountant at the Kenya Police department, said the €1.2 million (Sh120 million) was paid to Apex Finance Corporation through their account at the Schroder’s Bank in Geneva, Switzerland. She said this was desribed as a three per cent arrangement, commitment and management fee.

Muthoni said two companies – Sound Day Corporation and Apex Finance Corporation – which signed the contract to supply security equipment to the Police Department, were direct beneficiaries of the money, which cost Kenya €40 million (Sh3.8 billion). She said she authorised the payments for supply of police equipment and accessories in January 2004. Muthoni said part of the contract was signed by two former PSs, Joseph Magari and David Onyonka.

Another witness, Kenneth Mwangi, who was the procurement director at the Office of the President, told trial magistrate Felix Kombo that former Finance minister David Mwiraria (pictured) gave special authorisation to Magari to sign the contract on behalf of the government. He said Mwiraria further authorised use of direct procurement of a contract to modernise police equipment and accessories.

Mwangi also tabled correspondence showing that on December 17, 2003, the director of debt management received a letter from Treasury PS Dave Mwangi that the €40 million was to be split in two since the money was not budgeted for in the 2003-04 financial year.