Pressure for PS Muraguri to resign
Ministry to institute independent audit into claims Sh5 billion irregularly paid out to companies, including one owned by Uhuru relatives.
HEALTH Principal Secretary Nicholas Muraguri, who is at the centre of the Sh5 billion “Mafya House” scandal, is under pressure from State House operatives to quit.
The sleaze, also linked to President Uhuru Kenyatta’s own relatives, has turned into a public relations nightmare for the First Family and the Jubilee government, just 10 months to the general election.
The Star has established that top government officials have given Muraguri up to Friday to step aside – although the Head of State has remained tight-lipped.
Uhuru’s sister and cousin are among owners of companies suspected to have fraudulently pocketed millions of shillings in the “HealthGate” scam.
Yesterday, Health Cabinet Secretary Cleopa Mailu downplayed the outrage an internal audit has triggered and declared that no money was lost.
The CS also defended the President’s family, saying they had a right to do business with government.
“A Kenyan is a Kenyan. Anybody can conduct business with anybody,” Mailu said, insisting the contracts were aboveboard.
With the besieged Muraguri sitting by his side, Mailu said on live TV Kenya has made tremendous progress in creating a business environment, especially for women, youth and persons with disability.
Uhuru’s sister Nyokabi Kenyatta Muthama and cousin Kathleen Kihanya are directors of a company that pocketed Sh41 million in questionable payouts.
The controversial firm, Sundales International Ltd, is listed on the Public Procurement Oversight Authority’s 2014 roll of “Disadvantaged Groups” that should receive preferential treatment when they bid for tenders.
On Saturday, the Star exclusively reported that Sundales, registered on September 12, 2013 – five months after Uhuru’s election – has been awarded government contracts running into hundreds of millions of shillings.
Between September 2014 and February this year, for instance, Sundales won at least five separate tenders from the Kenya Medical Supplies Authority — worth Sh270 million.
In an elaborate press briefing at his Afya House office, Mailu responded to all the five issues that had been raised by the internal auditor, and declared that no money was lost.
He said, for example, that the Sh265.7 million that was transferred to the Cooperative Bank was for a Letter of Credit to one of the suppliers, Life Care Medics. The firm is owned by Sportpesa millionaire Paul Wanderi Ndung’u and Richard Ngatia.
“We have so far been able to establish that all expenditures under the audit report have been accounted for,” Mailu told journalists.
A letter of credit is a letter from a bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount.
Mailu went on: “It is also vitally important for me to clarify that the report under reference only raised audit queries based on an assertion of unaccounted expenditure, not fraud or theft”.
However, the internal auditor, Bernard Muchere, a certified fraud examiner, categorically termed some of the transactions “possible fraud schemes”.
Sources told the Star the ministry’s Head of Accounting Unit Joyce Mutungi and Head of Supply Chain Management Peter Njoroge would be central to the probe. Muchere had raised concerns over resistance to auditing by top ministry staff.
“The audit is experiencing setbacks in terms of a facilitative environment contributing to slow delivery of audit work which is necessary in management decision making and fraud risk mitigation,” the report says.
But even as he gave a clean bill of health to the controversial transactions, Mailu announced he would constitute an independent probe by a private firm.
“I hereby announce that we shall be initiating a private audit firm of international repute to conduct further independent evaluation of the interim audit report and the ministry’s responses thereto,” Mailu said, urging other state agencies, including the EACC, to expedite their probe.
The CS said Estama Investment Limited, which was paid Sh800 million to supply portable medical clinics, had done so.
He said the clinics, to be deployed in various parts of the country, are in safekeeping in a godown in Mariakani, Mombasa.
“We hereby also confirm that the company provided the requisite tax compliance certificate as well as a Pin certificate as required during the procurement process,” Mailu said.
However, on Friday last week, Attorney General Githu Muigai said Estama had not filed returns since it was registered in 2008.
“According to the records, no annual returns have been filed since incorporation. It’s a private company limited by shares that was incorporated on 19 June 2008,” Githu disclosed. The CS also said no money meant for the free maternity programme was lost, emphasising his ministry is focused on advancing “transformative programmes”.
The latest scandal has left Jubilee scratching its head amid public outrage at blatant theft and looting.
Health CS Cleopa Mailu with PS Nicholas Muraguri during a press briefing at Afya House, Nairobi, yesterday