E-Clips:- Business Pictorial - Queries Over Payment To UK Firm

Questions are still being raised over the Governments allocation of Sh464 million to a company that is under investigation over the multi-million-shilling passport scandal. The money, announced by Finance Minister David Muraria in his budget speech on Thursday, is the final instalment in a Sh1.9 billion project to set up a forensic laboratory for the Criminal Investigations Department.

It is to be paid to Anglo Leasing Finance, which is at the centre of investigations being done by Mr Hussein Mutua with Ethics Permanent Secretary John Githongo and anti-corruption police boss Gideon Mutua as supervisers.

Two Permanent Secretaries – Mr John Magari of Finance and Home Affairs Mr Sospeter Mwaliko – are among senior government officials, who have been suspended pending completion of the investigations. The company was to have organised the financing of the Sh2.7 billion project to be carried out by a French company, Francois-Oberthur Fiduciaire, which was paid Sh91 million as commitment fees.

But even before the project could start, queries arose over the tendering procedure. This led to the Government suspending it as investigations were launched.

Questioned by the Public Accounts Committee, Mr Magari has since confirmed that the contract with the Government was signed by Mr Colin Flynn on behalf of Anglo Leasing Finance. Details about the company are scanty, but investigations by the Nation established that the address it gave as its home base – Alpha House in Liverpool – is occupied by a property management firm called Saagar Associates.

Even as investigations continue to determine who its directors are, Nairobi lawyer Fred Ojiambo, who has been acting for it, has been caught in the widening net. Mr Ojiambo has twice given statements on behalf of Anglo Leasing Finance. Last week, he was arrested and recorded a statement after he failed to appear before the Anti-Corruption Police Unit, who wanted to get more information on the company and its directors. But shortly before this, the firm refunded the Sh91 million commitment fee. Mr Githongo admitted knowledge of the refund, but it was not clear how or by whom it was returned to the Government coffers.

Mr Ojiambo insists that he cannot disclose any information about the company, saying he is only acting on instructions from its lawyers in London. "It would be contravening the client-lawyer confidentiality," he said when he gave the first statement. The issue is expected to feature during the Budget debate. Of great interest will be the Governments response to the allocation of funds to a company whose directors its officers deny knowledge of.