A company linked to Nairobi businessman Stanley Livondo is caught up in a controversy over claims that it paid kickbacks for a $21 million (Sh2.7 billion) tender by Zambia’s army and Ministry of Defence to upgrade a military hospital in the capital Lusaka.
The Anti-Corruption Commission in Zambia is probing Kenya’s DLS International Group Limited over claims that part of a $.5.3million (Sh683.05 million) payment to it last year for the contract was later wired back to the personal accounts of some private Zambian business owners and Army officials.
In addition to the alleged kickbacks to Zambian government officials, the anti-graft agency is probing how a newly registered company bagged such a huge taxpayer-funded deal, despite not having any relevant experience in construction or security contracts.
The August 10, 2023 cash transfer by the Ministry of Defence in Lusaka was first flagged by the Financial Reporting Centre (FRC) in Nairobi, which asked DLS International to explain the purpose of the amount paid to its bank account.
The company, in its defence, said it had a contract in Zambia with the Ministry of Defence for the supply, installation, equipping and training of two hospitals and upgrading Maina Soko Medical Centre in Lusaka to a United Nations Level IV referral hospital at a contract cost of $21.2million.
The deal raised eyebrows because DLS International was incorporated in Kenya on February 21, 2023—barely six months before the payment for the contract.
Mr Livondo is the majority owner of DLS International with 350 shares. Other shareholders are David Kiguongo Kanja (300 shares), Simon Njoroge Ndung’u (300 shares), and Agnes Naini Walyaula (50 shares). Kanja is an architect, while Ndung’u is a quantity surveyor. They are both listed by the Board of Registration of Architects and Quantity Surveyors.
Mr Livondo has been the face and voice of DLS International in Zambia, even appearing in press conferences.
Yesterday, the businessman and politician dismissed the corruption and money laundering allegations against DLS International as “street gossip”.
He insisted that despite DLS International bagging a contract a few months after incorporation, his firm delivered its end of the bargain.
“There is nothing. It was true I registered a company (in) 2023 but is it a sin? What I was to deliver, I delivered 100 per cent … I don’t believe in street gossip,” Mr Livondo said in a series of WhatsApp messages.
Mr Ndung’u however denied having any stake in DLS International, despite his name and phone number appearing in official records held by the Business Registration Service.
“That is not my company, I am sorry,” he said before disconnecting the call.
Thabo Kawana, the Principal Secretary in Zambia’s Information Ministry, recently led a media tour of the hospital in Lusaka and dismissed the graft claims involving DLS.
Financial Intelligence Centre
The State-owned Financial Intelligence Centre (FIC) in Zambia lists the payment to DSL as a case study in its 2023 trends report on money laundering and terror financing.
“A foreign-owned Company DL was incorporated in February 2023 and opened a bank account in April 2023. In June 2023, Company DL was awarded a contract to supply equipment by Government Institution AR. The total contract sum was USD21 million. In August 2023, Company DL received a credit of USD5.6 million in its account from Institution AR as an advance payment” FIC says.
“It was established that Company DL had no previous work experience but had purported to have been involved in works for the construction of a national university when in fact not. A check with the parent Ministry M for Institution AR revealed that the procurement process used was direct bidding and that the solicitation document did not require previous work experience to be provided by Company DL, which raised a red flag as Company DL was recently incorporated,” it adds.
The Ethics and Anti-Corruption Commission (EACC) has sent a series of documents related to the investigation to its Zambian counterpart following a request from Lusaka, a move that opens up the possibility of prosecuting the controversial businessman.
Zambia sent a request for mutual legal assistance (MLA) to the office of the Attorney-General in Kenya.
“It is confirmed that EACC, through the Office of the Attorney General of the Republic of Kenya, received a mutual legal assistance request from Zambian authorities to support the said investigations where DLS International Group Ltd is adversely mentioned.
“The Commission has since availed the requested information and documents to the Zambian authorities, whose officials were in the country for that purpose,” EACC spokesperson Eric Ngumbi said yesterday.
The MLA has now triggered another investigation by the EACC, which is focused on the money laundering aspect of DLS International Group’s dealings the Zambian Defence ministry.
“The EACC has launched its own investigations focusing on the money laundering aspects as the Zambian authorities pursue the procurement and other offences committed in their country,” Mr Ngumbi added.
