Firms in Kemsa Covid deal did not conform to the law

Tuesday, January 26th, 2021 00:00 |
PIC chairman Abdulswamad Nassir and Embakasi East MP Babu Owino during a past committee hearing. Photo/PD/File

Only 13 of the 102 companies that won tenders to supply Covid related materials to the Kenya Medical Supplies Authority (Kemsa) were tax compliant, a parliamentary committee heard yesterday.

A report signed by the Kenya Revenue Authority (KRA) and signed by Commissioner General Githii Mburu tabled before the Public Investments Committee, indicated that only 13 companies applied for the Import Declaration Form (IDF) which is mandatory for importers.

The committee could not, however, interrogate the report as Mburu was not present. He was said to be held up in a high-level government meeting.

Committee chairman Abdulswamad Nassir directed that Mburu appears to furnish members with details regarding how companies were allowed to bring in imports without the vital IDF document.

Grossly inflated

Kenya bought Covid-19 supplies at grossly inflated prices, handing billions of shillings in quick profits to a few individuals.

Kemsa Chief Executive Officer Jonah Manjari and two other top managers have since been suspended pending investigations by State agencies. The probe has taken over seven months.

Among the companies that complied included Megascope Healthcare Limited, Shop ‘N’ Buy, Nanopay Limited, Medilife Biologicals limited, Crown Healthcare Limited and Wallabis Ventures Limited.

Twelve firms, for instance, were awarded contracts worth Sh3 billion by Kemsa to deliver items that were not covered by the State agency’s 2019/20 approved budget as at June 4, 2020, with some multi million-shilling irregular bids going to friends and well-connected individuals.

It also emerged that Kilig Limited, which was at the centre of the Kemsa Covid scandal, changed ownership five times before it was awarded the tender.

The company was registered on January 22, 2020 by two investors before it eventually changed hands, bringing on board Ivy Minyow, who won a Sh4 billion tender from Kemsa.

Form CR6 tabled before the committee by Registrar of Companies, Sarah Ndung’u, showed that as at April 15, 2020, the company was owned by Willbroda Gachoka and Zhu Jinping, a Chinese investor.

They, however, transferred their shares to Collins Bush Wanjala, but on May 7, 2020, he resigned as a shareholder and sold his 1,000 shares to Minyow.

“According to the records relating to Kilig Limited held by the Registrar as at December 22, 2020, the names of the shareholders are Ivy Minyow Onyango with 1,000 shares,” Ndung’u told the committee.

But when she appeared before the committee last December, Minyow said she was the company lawyer when the company was registered. She said she registered the company on January 22 last year.

Her company was handpicked and handed a Sh4 billion offer to supply hundreds of thousands of Personal Protective Equipment (PPEs).  

Market price

Each kit was to be delivered at an inflated cost of Sh9,000, from the then market price of Sh4,500.

The complete kit included N95 masks, bodysuits, goggles, waterproof shoe covers and gloves. She was to supply 450,000 of each item.

Today, the committee is expected to interrogate directors of several companies, which benefited from the tenders that include, Shop ‘N’ Buy Limited, Megascope Healthcare Limited regarding the Special audit report.

Other companies under probe are Abyssinia Group of Industries (AGI), which was awarded a contract to supply 30,000 pieces of N95 face masks at a cost of Sh900 each.

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