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.

The Star (Kenya) - - Front Page - FE­LIX OLICK @olick­fe­lix

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.

/ MONICAH MWANGI

Health CS Cleopa Mailu with PS Nicholas Muraguri dur­ing a press brief­ing at Afya House, Nairobi, yes­ter­day

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