The identities of individuals who negotiated on behalf of the government in the Sh6.2 billion buyback of Telkom Kenya remain a mystery, with no one at the National Treasury wanting to be associated with the questionable deal.
Members of the Finance and National Planning and the Communication, Innovation and Information committees of the National Assembly, who are undertaking a joint investigation into the questionable sale, have especially been left frustrated by the behaviour of some senior former and current government officials.
Former National Treasury Cabinet Secretary Ukur Yatani, former Principal Secretary Julius Muia, and former acting director-general of Public Investments and Portfolio Management (PIPM) Stanley Kamau have appeared before the committee.
The others are Mr Bernard Ndung’u, the current director-general Accounting Services and Quality Assurance at the National Treasury and former ICT Cabinet Secretary Joe Mucheru.
But none of them has admitted negotiating with Helios Investors LLP, a company that was paid the money through Jamhuri Holdings Limited (JHL), its special purpose vehicle (SPV), on behalf of the government, despite their positions being crucial in the deal.
However, they have been quick to say that the buyback deal was sanctioned by the National Security Council (NSC). But what they are not revealing is that NSC’s approval came after Helios had requested to exit from Telkom Kenya Ltd, citing frustrations from the government.
The NSC move opened the window for further negotiations between the government and Helios Investors LLP/JHL on the price and the mode of payment.
So, who negotiated the buyback deal on behalf of the government?
When he appeared before the committee last week, the former Head of Civil Service and acting Secretary to the Cabinet, Dr Joseph Kinyua, said the National Treasury had a team that advised Mr Yatani on the way forward.
“The National Treasury had a technical team that sat and prepared a paper that was co-signed by the CS National Treasury and Attorney-General, for approval by the NSC and the Cabinet. It is only that we cannot put faces but these people are known,” Dr Kinyua said.
But even as he said this, Dr Kinyua took issue with the kind of people the MPs approve for appointment to senior government positions.
“You should be raising the capability issues about the people you appoint to government offices,” said Dr Kinyua, without revealing much or making any reference.
Mr Yatani, when he appeared before the committee sometime back, said the deal was approved by the NSC, and that it was good for the country, and if given another opportunity, he would do it again.
For his part, Dr Muia told the MPs that he forwarded the approvals to the directorate of PIPM ‘so that they can do their work’.
“This was after receiving the approvals from the CS National Treasury,” Dr Muia told the committee, adding that “the discussions started way before I joined the National Treasury”.
Mr Mucheru said his former ministry was not involved because Telkom Kenya Ltd was not a state corporation and, therefore, not under its ambit. This, notwithstanding the fact that an Executive Order in the immediate former administration had placed Telkom Kenya under Mr Mucheru’s ministry.
The PIPM directorate is responsible for coordinating, managing and providing leadership in government investments and public enterprises, assets and liabilities in government, public investment management, public-private partnerships and government pensions.
When asked by the committee members who negotiated the payment on behalf of the government during his previous appearance before the committee, Mr Ndung’u said he was not competent to answer the question.
“I don’t know. That question is best answered by the directorate of PIPM,” said Mr Ndung'u.
He could not also say whether the transaction was above board, throwing the buck at the doorstep of the former acting director-general of PIPM.
“The substance of the transaction is best addressed by the directorate of PIPM, who are in charge of evaluating public investments and making appropriate recommendations,” said Mr Ndung’u.
This saw the MPs question Mr Kamau’s role and intentions after scrutiny of documents before the committee, especially after revelations that he authored letters on the deal and received them as a second party.
Mr Kamau, in his previous appearance before the committee, said he did not negotiate on behalf of the government.
“I wish to inform the committee that I did not participate in the negotiations for the buyback of the Telkom shares by the government,” Mr Kamau said.
This notwithstanding that he was in charge of government investments and that his position was crucial to the Telkom Kenya acquisition.
Mr John Ngumi of Eagle Africa Capital Partners Ltd had told the committee that while acting for JHL, he negotiated with Mr Kamau on behalf of the government, an assertion the former acting DG PIPM dismissed.
Telkom Kenya buyback plan
“I did not sit down with Mr Ngumi to negotiate on behalf of the government. I have never met him,” said Mr Kamau, an explanation that Molo MP Kimani Kuria, who chairs the Finance and National Planning committee, said was not adding up.
“It is either you are misleading us or you are contradicting yourself,” said Mr Kuria while referring Mr Kamau to the letters and memos he generated over the Telkom Kenya buyback plan.
When he appeared before the committee on March 23, 2023, Mr Kamau said his role was to assist the CS National Treasury to implement the decision of the NSC.
Documents presented to Parliament by Mr Ndung’u put Mr Kamau at the centre of the Telkom Kenya buyback deal.
On July 25, 2022, Mr Kamau generated a memo to the National Treasury PS, Dr Julius Muia, notifying him about the decision of the NSC of April 1, 2022 and goes on to state that the payment of Sh6.2 billion to JHL will be done in form of a three-year Treasury bond.
Mr Kamau further says the payment should be regularised in the supplementary budget I for the 2022/23 financial year.
On the same day, Mr Kamau, in a letter to Dr Muia, which he purportedly signs off as then CS Yatani, changes his position on the mode of payment to JHL.
“The payment to JHL should be made through the normal exchequer,” reads the July 25, 2022 letter that interestingly makes reference to a July 27, 2022 letter.
“It is interesting how the letter purportedly written by then CS Yatani to Dr Muia but signed by Engineer Kamau can make reference to a letter that will be written in future,” Dagoretti South MP John Kiarie, who chairs the Communication, Innovation and Information committee, had wondered in one of the joint committee’s investigations.
When questioned by the MPs last week why he signed the letter as Mr Yatani, he said he signed it on behalf of the then CS. “I drafted the letter and signed for the CS with his approval as he was out of Nairobi,” he told the committee.
Mr Ndung'u had, however, told the MPs that only the PS can sign letters on behalf of the CS “but only on delegated authority from the CS, which must be in writing”.
When asked what changed and why the memo and the letter to the PS were contradictory on the mode of payment, Mr Kamau said: “I am not an expert in Treasury bonds.”
This is despite telling the lawmakers that Treasury bonds in line with section 53 of the Public Finance Management (PFM) Act are a means of raising funds and not a mode of payment.
“When I issued the memo I was following instructions,” Mr Kamau said but did not disclose to the MPs where the instructions came from. In another letter to former Solicitor-General Ken Ogeto, he says, “We have discussed the matter with JHL and have agreed to change the mode of payment.”
This saw the Molo MP put to him that discussions about the Telkom buyback were already in place before the NSC came in.
“I am not denying that we did not participate in the decision. However, I did not sit down with JHL to negotiate this transaction though I participated in the implementation of the agreements,” Mr Kamau said, as some members sought to have him declared a hostile witness.
