Kemsa paid Covid suppliers Sh870m days to 2022 polls
Health workers at the Mathari National Teaching and Referral Hospital in Nairobi wearing personal protective equipment on August 12, 2020. Kemsa paid four companies half a billion shillings one month before the 2022 General Election in a series of payments whose controversy could once again invite anti-graft detectives to a government institution that has been plagued by procurement scandals over the years.
In July 2022, most of the country was fixed on elective politics and the policy shifts that come with a new government.
By this time, business was generally slow for anyone who was not in events, printing, fuel or any enterprise required for campaigns.
But for a handful of contractors hired by the Kenya Medical Supplies Authority (Kemsa) to import personal protective equipment (PPE) at the peak of the Covid-19 pandemic two years earlier, it was raining money.
Kemsa paid four companies half a billion shillings one month before the 2022 General Election in a series of payments whose controversy could once again invite anti-graft detectives to a government institution that has been plagued by procurement scandals over the years.
On July 8 and July 27, Kemsa paid Shop “N” Buy Ltd (Sh332.5 million), Medilife Biologicals Ltd (Sh110 million) and La Miguela Holdings (Sh60 million).
Internal documents seen by the Nation show that Kemsa paid six companies that supplied Covid-19 protective gear Sh869.6 million in the five months leading to the 2022 General Election.
The payments were made despite an active investigation by the Ethics and Anti-Corruption Commission (EACC) into Kemsa’s procurement of protective gear in 2020 when the Covid-19 pandemic had brought Kenya to a standstill.
The EACC’s investigation is at the tail end and could mean the prosecution of individuals—both Kemsa officials and suppliers—implicated in any wrongdoing.
Director of Public Prosecutions Noordin Haji confirmed yesterday that the investigation is about to be concluded. On February 23, the file was returned to the EACC for completion of a few aspects before the suspects are charged.
EACC detectives are confirming the cost of the protection gear at the time Kemsa contracted dozens of companies to supply the equipment, for comparison with the State agency’s payments.
“We want to see who got the money, where and when. It requires assistance from other countries, especially on the pricing (of PPEs),” Mr Haji said.
Kemsa had not responded to our queries by the time of going to press.
When Kemsa’s questionable procurement of PPEs first went public in 2020 as a result of a Nation investigation, then President Uhuru Kenyatta gave investigative agencies 21 days to ensure the prosecution of individuals and companies involved. Nothing ever came out of this. No information regarding the directive has been made public to date.
The National Assembly’s Public Investments Committee (PIC) also probed Kemsa and published a report calling for the prosecution of some individuals and the investigation of others.
Nobody has been charged nearly two years after the report was adopted by the House. Once committee reports have been adopted, investigative agencies are at liberty to use the findings in investigating and pushing for the prosecution of implicated individuals.
According to PIC, Kemsa purchased protective gear such as masks at rates that were grossly above market rate.
The procurement mess left Kenya unable to account for at least Sh17 billion—mostly donor funds—intended to purchase PPE for medical professionals and the public against Covid-19.
The Nation has established that Shop “N” Buy Ltd was the biggest beneficiary of Kemsa’s payments last year, having received a total of Sh498.7 million in three instalments. The third instalment was paid on September 7, 2022, just two days after the Supreme Court upheld President William Ruto’s election.
Backdated letter
Shop “N” Buy was on the spot during the PIC investigation as Kemsa’s letters committing to pay the firm were backdated irregularly.
Pamela Kaburu, a secretary in the office of the then-procurement director Charles Juma, admitted to the committee that she was ordered to backdate the letter for Shop “N” Buy. The PIC report recommended an investigation of the individuals that backdated the letter.
Shop “N” Buy was incorporated on February 14, 2020. Three months later, it had bagged a Sh970 million tender from Kemsa to supply 100,000 PPE kits. The firm is fully registered to James Kipketer Cheluley. He insisted that neither he nor the company committed any wrong.
Other established firms that had been stocking PPEs long before the pandemic were overlooked. The PIC report noted that some of the established and experienced firms were denied supply contracts because they insisted on playing by Kenya’s public procurement rules.
Nairobi Enterprises Ltd, the second biggest recipient, was the first to be paid by Kemsa last year. The firm is one of the established firms that PIC found was frustrated for insisting on playing by the rules. Co-founder Rajan Dhahani told the committee that his firm was taken around in circles after supplying PPEs worth Sh200 million.
“The EACC should investigate the top Kemsa management on how it processed payment to some suppliers. The companies, such as Harleys Limited and Nairobi Enterprises Limited, that insisted on following the procurement law, were left out of payment,” the PIC report reads.
Nairobi Enterprises Ltd was incorporated on August 16, 1984. It is owned by Mr Dhahani, Perviz Dhahani Rajnikant and Saroj Rajnikant Dhahani.
The Kenya Medical Supplies Authority Embakasi warehouse in Nairobi on December 1, 2020. On July 8 and July 27, Kemsa paid Shop “N” Buy Ltd (Sh332.5 million), Medilife Biologicals Ltd (Sh110 million) and La Miguela Holdings (Sh60 million).
The third biggest beneficiary, Medilife Biologicals, received Sh110 million in two instalments. Both payments were made in July 2022.
The firm is owned by Indian nationals Mishra Pallavi and Soyuz Ranjan Mishra. The company was incorporated on January 7, 2017. It been contracted to supply 200,000 KN95 masks and 20,000 disposable masks. The value of the two contracts was Sh230 million.
La Miguela Holdings received Sh90 million between July and September 2022. Just like Shop “N” Buy, the firm was paid in three equal instalments.
Incorporated on March 21, 2014, the firm is owned by James Njuguna Kuria and Jane Wairimu Njoroge.
La Miguela has in the past supplied Kemsa with fire equipment worth Sh400,000. It somehow won a Sh180 million tender at the expense of seasoned medical suppliers.
Mr Njuguna told PIC that his sympathy for a friend who contracted the Coronavirus compelled him to seek a supplies contract with Kemsa.
Other firms that received payment for PPE supplies last year are Abyssinia Group of Industries (Sh18 million), Trippleage Investment Ltd (Sh13 million) and Pasaiba Tourmaline Ltd (Sh4.5 million).
Abyssinia Group, a firm whose main business is steel and iron, was handed a Sh27 million contract for the supply of 30,000 N95 masks. The firm was incorporated on November 23, 2007, and is owned by Jateen Patel, Mahendra Danyabhai Hathibhai and Indra Patel Mahendra.
Trippleage Investment won a tender to supply KN95 masks. The firm was incorporated on December 9, 2013, and is fully owned by Ali Abdi Maalim.
Pasaiba Tourmaline, a medical supplies distributor, got a contract to supply Kemsa with KN95 masks. The firm was incorporated on April 9, 2012, and is owned by Irene Chemutai Rop and Amos Kipkoech.
