EACC moves to recover Sh330 million lost in stadiums deal

The case revolves around a contract awarded to Auditel Kenya ahead of Kenya’s failed bid to host the 2018 Africa Nations Championship (CHAN). 

Investigators allege the deal was marred by illegalities, with payments made for work never performed. Funds were allegedly siphoned to Madrid, Spain, before being dispersed back to Nairobi to a network of local firms and individuals in 2018.

Court documents reveal that Auditel Kenya and its Spanish parent company, Auditel Ingenieria y Servicios S.L., were later dissolved in June 2020 after the funds were transferred.

Among the defendants listed are former Sports PS Mr Kaberia, Sports Kenya official John Ruga, former State Department for Sports Development director Haron Komen Chebet and former Ministry of Sports procurement head Isaac Okoth Omogi. 

Others include former senior finance officer Stephen Njoroge Muthuma, ex-FKF president Mwendwa, Samuel Mbaa Njoroge, Auditel director Marcos Gonzalez Puente, Anthony Mwangi Kimathi, and Kitheka Muema. 

Corporate defendants Restea Enterprise Limited, Leasepride Limited, and Leasepath Limited are accused of receiving or laundering the disputed funds.

 EACC has accuses the 13 defendants of engineering a corrupt procurement, laundering the proceeds and leaving the public empty-handed.

The lawsuit focuses on an advance payment of Sh330.5 million wired to Auditel Kenya’s Spanish account in January 2018, which EACC describes as payment for "supply of air." 

The State Department for Sports Development had awarded Auditel Kenya a $15.9 million (Sh1.5 billion at the time) contract to design and install security, communications, and lighting systems for CHAN 2018 venues. 

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However, EACC claims the contractor invoiced an advance of $3.687 million barely five weeks after signing the deal, despite failing to meet contractual conditions, including providing a milestone completion certificate.

"No work was performed, inspected, or accepted, meaning no value was received for the payment," EACC stated, terming the transfer an unlawful disbursement exposing public funds to loss.

The commission alleges the procurement process violated multiple laws, including the Public Procurement and Asset Disposal Act and the Anti-Corruption and Economic Crimes Act.

Key failures cited include single-sourcing without justification, absence of tender documents, lack of bid security, and no evaluation committee. Additionally, there was no performance bond to safeguard government interests.

EACC further questions the competence of key individuals involved, noting one defendant lacked engineering qualifications yet was presented as capable of executing the contract. 

Illegalities and irregularities

By the contract’s end, none of the promised systems had been installed, contributing to Kenya’s loss of CHAN hosting rights—leaving taxpayers with nothing but financial losses.

"The payments to the contractor were tainted by corruption, illegalities and irregularities, fraudulent collusion between the defendants, and were not supported by verifiable documents," EACC argues.

Investigators also allege the Sh330 million was laundered through three trading companies—Restea Enterprise, Leasepride, and Leasepath—before reaching individuals linked to the deal. 

The defendants are accused of conspiracy, abuse of office, and submitting falsified procurement documents.

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EACC further claims that the dissolution of Auditel Kenya and its Spanish parent company compounded the loss of public funds and underlines the need for the court to order recovery from the individuals and entities it believes benefited from the scheme.

The commission seeks joint and several recovery of the funds, arguing they represent proceeds of corruption and public finance laws. 

The suit frames the alleged conduct as a coordinated scheme. The 13 defendants are yet to file their responses to the case.

EACC says it filed the suit to “protect public property” and to claw back money it describes as “proceeds of corruption and payments of compensation.”

The commission has also forwarded the case to the Office of the Director of Public Prosecutions for potential criminal charges.

The lawsuit marks a high-stakes legal battle over a deal meant to elevate Kenya’s sports infrastructure but which EACC now allege was a fraudulent scheme yielding no public benefit. The defendants have yet to respond to the suit.

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