The Directorate of Criminal Investigations (DCI) is piecing together a case that could reveal the defrauding of taxpayers in an edible oils import scandal.
Though the DCI is yet give an official statement on the matter, Kenya National Trading Corporation (KNTC) bosses – including MD Pamela Mutua – are said to have been held for questioning on Monday.
The DCI is investigating reports of irregular KNTC import tenders for edible oils valued at Sh16.5 billion and other food items, including rice and maize.
The Senate has also taken an interest in the issue, demanding to know if the government imported 12,500 tonnes of edible oils as reported by KNTC after a House committee failed to locate the consignment that was intended to tame the rising cost of basic commodities.
“We want to know how and why KNTC settled on the companies awarded the tender and the board resolutions by the National Treasury and the Kenya Revenue Authority (KRA) to import the commodities duty-free,” said an officer aware of the investigations.
He said detectives are also focused on establishing if the tendering was competitive, who the bidders were and the identities of the beneficiaries.
“We want to know how the payments were done before the commodities were sold and if the bank credit (used to finance the imports) has been settled. If so, with which funds?” said another officer familiar with the investigations.
“We are still interrogating the KNTC officials and bank officials who guaranteed the credit financing. We need to establish if due process was followed.”
Insiders told the Daily Nation that the companies contracted were hurriedly paid for deliveries after flooding the KNTC warehouse with the commodities that have not been sold to date.
The lenders, on the other hand, are reportedly demanding to be paid.
“The commodities are still in the stores. We want to know why KNTC received the goods and cleared payments before ascertaining their quality,” another officer said.
The DCI is expected to forward the investigation file to the Office of the Director of Public Prosecution when investigations are complete.
Agriculture Cabinet Secretary, Mithika Linturi, has been on the spot over the edible oil and food purchases.
He was recently questioned over the duty-free imports, and tasked to give a breakdown on the commodities.
Mr Linturi told lawmakers that 163,827 tonnes of sugar from non-Comesa countries was imported between January and September.
He added that 156,957 tonnes of maize valued at Sh6.6 billion was imported in the same period while 707,107 tonnes of rice valued at Sh37.6 billion was shipped into the country.
The minister told the MPs that of this amount, Sh3.3 billion was spent on maize imports and Sh13.2 billion on rice.
“The foregone revenue is the percentage of duty normally charged on commodities delivered at 50 per cent on maize and 35 per cent or $200 per tonne on rice, whichever is more,” Mr Linturi said when he appeared before the National Assembly Agriculture Committee.
The government allowed traders a six-month duty-free import window at the peak of the drought and before the onset of the current rains.
While serving as the Trade CS, Mr Moses Kuria – now heading the Public Service docket – earlier this year defended the imports.
The Ethics and Anti-Corruption (EACC) is also said to have taken an interest in the procurement of edible oils by KNTC.
Already, the commission has sought documentation from the corporation’s management.
The EACC is pursuing KNTC commercial bank accounts, accounts for companies engaged in the tender, and the credit financing agreement between KNTC and KCB Bank on letters of credit.
The commission also wants a list of companies that were contracted to supply and deliver food commodities as well as a list of firms that purchased food commodities from KNTC and tax exemption letters from the National Treasury and KRA.
Further, the commission is looking at data and revenue reports for the sale of the commodities to local companies and audit reports on supply and delivery of the items and correspondence between KNTC and KCB on credit arrangements.
