Firms owned by Kenya Kwanza-linked honchos have won multi-billion-shillings contracts, but some crucial details are not in the state portal.
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How government tenders billionaires cheat the system to hide details
Details of well-connected individuals who own firms that recently bagged lucrative government tenders are missing from a public procurement portal aimed at bringing transparency and accountability into public procurement.
Analysis of a sample of 12 companies — owned by individuals with close links to the Kenya Kwanza administration — shows that details of the contracts they recently signed with various State agencies were not published as required, pointing to heightened opaqueness in public procurement.
In total, these companies have in the last nine months won Government tenders valued at over Sh22 billion, a big chunk of which is supplying various commodities to the Kenya National Trading Corporation (KNTC) in what was aimed at reducing the prices of food.
Such omissions have caught the attention of the International Monetary Fund (IMF), which has in turn expressed displeasure at the slow rate of publishing details of beneficial owners of government suppliers on the Public Procurement Information Portal (PPIP).
“Continued low level of reporting of beneficial ownership information by companies is hampering effective implementation of the beneficial ownership framework,” said the IMF in its latest report.
As part of a $3.52 billion (Sh503.4 billion) programme Kenya has with the IMF, all the details of shareholders of companies doing business with state corporations must be made public.
Because public procurement is one of the government activities most vulnerable to fraud, the global financier reckons that ensuring transparency and accountability in the process will help the country reduce its high fiscal risks by ensuring that taxpayers get value for money.
The Sunday Nation’s query of the PPIP — a portal where all information on government tenders is supposed to be found — did not yield substantial results on these well-connected individuals analysed.
In some instances, the names of the companies were missing from the list of suppliers. And where the names featured, the contracts could not be found.
A beneficial owner can generally be described as an individual or individuals with control over a company without being legally listed as a director or shareholder. In almost all the contracts, details of the beneficial owners were scanty.
Save for the names of the substantial shareholders, postal address, their Kenya Revenue Authority Personal Identification Number, national identity card or passport copies, residential address, occupation, telephone number and the date when an investor became a beneficial owner were missing.
Companies associated with the Communications Authority Board Chair Mary Wambui Mungai, Belgut MP Nelson Koech, and Kenya Revenue Authority Chair Anthony Mwaura and other prominent people, recently won or unsuccessfully bid for major government tenders.
However, details of their beneficial owners, or those with over 10 per cent control of the companies, had not been uploaded in the portal.
Moreover, the tenders won by these companies were not among the 14,663 contracts in the Financial Year 2022/23.
The portal broadly lists active tender notices, closed tenders, Access to Government Procurement Opportunities tenders, terminated tenders, restricted tenders and various notices.
For Wambui, who was facing charges of tax evasion by the administration of retired President Uhuru Kenyatta that were later dropped, Dr Ruto’s rise to power in September coincided with a bumper harvest of government deals by four companies associated with her.
This was around this time that Trade Cabinet Secretary Moses Kuria presented to the Senate a list of 11 companies that KNTC had contracted to import various commodities aimed at bringing down the prices of cooking oil, wheat, rice and beans.
Mr Kuria told the Senate that the Public Procurement Regulatory Authority had given KNTC to buy these commodities directly from companies without going through the competitive bidding.
The four firms linked to Ms Wambui got the contract to import edible oil, rice and beans in deals worth Sh6 billion. But details of their directors, or beneficial owners, were scanty.
Purma Holdings, which is fully owned by Ms Wambui, did not have any details on the contract it won to supply KNTC with 30,000 tonnes of rice and 20,000 tonnes of beans captured in the online portal.
The only contracts for Purma listed in the portal include the supply of KN95 respirator face mask and surgical face mask to KEMSA which was completed in 2020.
Charma Holdings, owned by Ruth Waithira Kinyanjui, an associate of Ms Wambui, is in the portal. However, the contract of supplying 30,000 tonnes of red kidney beans to KNTC is not included in the online portal.
It is the same thing with Nightingale Enterprises, which Ms Kinyanjui co-owns with Evelyn Nyambura Mungai, Ms Wambui’s daughter.
The details of the contract — laying fibre optic cables for the Communication Authority — is not captured as one of their contracts.
Ms Wambui’s Enterprise Trading Company also does not feature in the portal. Enterprise was contracted by KNTC to supply 6,250 tonnes of cooking oil worth Sh1.2 billion to the state corporation.
There are also no details of Evertec General Trading Company which was contracted to supply 6,250 tonnes of cooking oil to KNTC.
KNTC also contracted a number of foreign companies, mostly from the United Arab Emirates, to supply it with these commodities. All of these companies, as well as details of their beneficial owners, are not included in the portal as required.
First Quality Supplies, majority-owned by Mirram Chepkosgei, supplied KNTC with 25,000 tonnes of CAN fertiliser to bring down the cost of food.
This contract is not captured in the portal. However, four other contracts of Sh71.4 million are listed in the portal. First Quality has bagged a contract to supply farm inputs, fertiliser and agrochemicals to Kenya Seed Company valued at Sh41.8 million.
The company was also contracted by Kenya Pipeline Corporation to improve and supply fluid powered JET A-1 Anti-Static additive dosing pump at a cost of Sh12 million.
Then there were two contracts to supply personal protective equipment for drilling staff under Kengen’s Geothermal Development Division. Each of the contracts was valued at Sh8.75 million.
In its latest review, the IMF decried the minimum disclosure on the details of owners of companies that do business with State agencies, bringing into question the effectiveness of the 48-month agreement the country has with the Washington-based financier.
Shovels and Trowels, a company owned by MP Koech’s wife Chepkirui Kones, was awarded a Sh1.2 billion contract to repair sections of Mombasa Road, Uhuru Highway and Waiyaki Way destroyed during the construction of the Nairobi Expressway.
The company has been contracted by Kenya National Highways Authority for periodic maintenance of the section from James Gichuru Junction– Museum Hill – Nairobi Southern Bypass Interchange (Ole Sereni).
The project, which runs from April 26 to April 25, 2025, is captured in the portal. However, various details, including beneficial owners, are incomplete.
The exclusion of these details continues despite the assurances by both the administration of retired President Uhuru Kenyatta and President William Ruto to the IMF that all information on beneficial owners of government suppliers would be made public.
The publishing of the public procurement information was part of the structural benchmarks in the ongoing Extended Fund Facility and Extended Credit Facility arrangements.
Kenya was supposed to start publishing beneficial ownership information, or details related to the identity of individuals with a stake of more than 25 percent by the end of June 2021.
“The authorities are taking additional measures to ensure public procuring entities continue to comply with the publication requirements, including by conducting capacity building activities,” added the IMF.
Similarly, Section 93A of the Companies Act 2015 requires firms to disclose to the State the identity of secret shareholders, including names, phone numbers and residential addresses.
The IMF reckons that this requirement will also help the government’s efforts to unmask illicit wealth.
“To further strengthen the country’s beneficial ownership framework, Kenya Business Registration Services has developed the centralized electronic register for beneficial ownership information in October 2020, which provides for timely access to the information by competent authorities,” said the IMF.
The law requires new firms to fill the Beneficial Ownership Information E-Register at the companies registry ahead of registration and existing firms to comply within the set timelines in a major shakeup of shareholder records.
Under the deal, every company contracted by a State agency was expected to reveal its beneficial owners on the procurement portal or be locked out of the tender.
However, this was delayed with the government explaining that it did not yet have the right legal framework to reveal such data.
