National Youth Service: Looting Most Foul

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By Kenya Confidential Corruption Investigations Editor, Nairobi, May 17, 2018

Firstling Supplies Ltd received the highest bounty at Ksh1.48 billion, followed by Flagstone Merchants, which received Ksh1.03 billion

Kenyans are watching with consternation the massive looting of  National Youth Service (NYS), a body intended to empower their youths with skills to build the country for a better future. The level of corruption will derail any prospects of achieving President Uhuru Kenyatta’s Big 4 objectives as long as the corrupt are pampered because of their ethnicity and political ties.

Firms now under investigation over the possible loss of whooping  Ksh 9 billion at the NYS are by far not first offenders but have had previous questionable dealings with the parastatal but unlike the general believe firms dealing with billions of shillings must have websites, they are reported to have lnone. Only one has a website but, even that, does not list its management.

Companies like Firstling Supplies Limited and Flagstone Merchants, that danced all the way to their banks with more than Ksh1 billion each in the latest NYS scandal remain largely anonymous operations. That means the famed Integrated Financial Management Integrates System (IFMIS) cannot literally trace footprints on their dealings.

Not surprising on matters of unpunished corruption in Kenya, companies flagged by the Auditor-General and the Ethics and Anti-Corruption Commission (EACC) in the past for suspect fraud are still comfortably doing business with the government.

A notorious case is Fastlane Freight Forwarders, which had its accounts frozen by the High Court in the wake of “reasonable suspicion” that it had received Ksh209 million from NYS as reimbursement for clearing and forwarding costs for equipment, even though there was no proof that such services had been rendered.

A Nairobi court found that the Ministry of Public Service, Youth and Gender Affairs had not tendered for the provision of such services during the 2015-2016 financial year, and no contract between the ministry and (Fastlane) had been provided as a basis for the payment. Yet the company has been driving on the fast lane looting NYS at unstoppable speed. In the current scandal, Fastlane is said to have been paid a cool Ksh221 million.

The Principal Secretary in charge of National Youth Service Lillian Mbogo Omollo and NYS Director General Richard Ndubai stood aside on May 18, 2018 to allow for full investigations to the scandal. However, both did not occupy those offices at the height of the massive looting going by Auditor General reports.

Firstling Supplies Limited, which received Ksh1.48 billion, was also cited in a report by the Auditor-General in 2012, meaning it has been doing business with government bodies for years. The directors of the company based at Ukulima Co-operative House are James Thuita Nderitu and Yvonne Wanjiku Ngugi.

Firstling Supplies Ltd received the highest bounty at Ksh1.48 billion, followed by Flagstone Merchants, which received Ksh1.03 billion.

Although Nderitu’s contact is listed in tender documents, he has denied knowledge of the two companies, which work closely with Flagstone Merchants, another beneficiary of the questionable NYS transactions. His firm is also related to Bosqure Systems Limited, which was paid Ksh59 million. The latter has been doing business with some county governments.

Mombasa-based Techbiz Limited, which was ranked 72 on the Business Daily’s Top 100 list in 2009, is listed as having received Ksh767 million.One Faraj Mansur claims to be the co-founder of the company.

Emaki Ventures, that received Ksh39.3 million, is on the list of suppliers who sold cleaning materials to the National Environment Management Authority (Nema) in the 2014-2015 financial year.

Ms Eunice Ngeene of Excella Limited, indicated to have been paid Ksh282 million, when reached for further information, denied doing business with the NYS.

Another firm, Ensa K Ltd is available, details are complete with a landline and mobile telephone number. In the Ministry of Transport portal, its address is listed as Gill House in Nairobi, but in the Nairobi County business portal, it is listed as ‘Nairobi CBD, Tom Mboya Street’.

Ensa received Ksh1.9 million and was prequalified to supply the Ministry of Transport and Infrastructure as a youth-owned company. Ms Esther Ototo is listed as one of its directors.

Under the Uhuru Kenyatta administration, companies owned by youth, women and people with disabilities are offered preferential treatment to supply 30 per cent of government tenders. That facility is being abused at an alarming rate.

Ensal Kenya Ltd is another company linked to the NYS payments. Ensal was contracted to supply office equipment, stationery and related items. It received the third lowest payment from NYS between September 2016 and August 2017. Edmand Enterprises had the lowest payment of Ksh140,000 followed by Mammery Solutions at Ksh22,730.

Bosqure Business Systems Ltd received Ksh59.3 million from NYS. Between 2014 and 2016. At the time, Firstling was listed as a prequalified supplier of tyres to the government, but documents at the World Bank also show that it bid to supply fencing materials to Moi International Airport as part of the northern corridor project in 2004.

Its offer was rejected and the tender, worth Ksh37.4 million, awarded to Westcon Contractors Limited. Edward Mwangi claims to be the “owner” of Firstling.

According to online documents, the company is based in Nakuru and is prequalified — as supplier number 164 — by Nakuru County Government. The list is for companies that will provide road and civil engineering services in the current and next financial year, which starts on July 1.

Era Two Thousand Enterprises received Ksh273.9 million from NYS in one of the highest payouts.  But, according to the Kenya Law Report, the company was taken to court last year by the Ethics and Anti-Corruption Commission and a private firm, Sale Superstores.

The case was filed under miscellaneous application number 67 of 2017 and sought to freeze the transfer of money from the company’s account at Barclays Bank, Queensway Branch in Nairobi. More often than not courts have shamefully denied EACC injunctions to freeze looters accounts, which are immediately cleaned up and substantial protection fee paid to judicial officers.

Era Two Thousand was listed as the second respondent while a Mr Evanson Thuo Waweru was the first. The case was filed in the Anti-Corruption and Economic Crimes Division of the High Court, which gave the orders sought in October last year.

Another company, Evergreen Enterprises Ltd, received Ksh70.5 million from NYS. The company is a prequalified supplier for the production and supply of branded promotional materials. It is among the prequalified suppliers for Magical Kenya, which is run by Brand Kenya.

Evertec General Trading Company Ltd, which received Ksh68.7 million, is listed as the tenth company in the NYS dossier. Interscope Tech and Services, which received Ksh176 million of the NYS money, is also cited in the Auditor-General’s report of 2012, indicating it has had previous dealings with the government.

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