Companies

De La Rue wins battle for currency printing deal

De La Rue

De La Rue has been contracted to print Kenya’s currency since Independence, but was only registered in Kenya as a company in February 1992. PHOTO | FILE

British company De La Rue has won a protracted court battle for a lucrative tender to print currency for the Kenyan government. The High Court last week gave the Central Bank of Kenya (CBK) the green light to enter into a contract with De La Rue, throwing out a petition that was seeking to quash a deal the two parties signed in 2006.

Lady Justice Mumbi Ngugi dismissed a petition filed by human rights group Kituo cha Sheria in 2011, which sought to restrain the government from completing the deal arguing that it had not been put to public participation.

“In the absence of evidence that the decision alleged to have been made on the basis of a Cabinet memo was made at all, or was made without input from the central bank, it is difficult to see a basis on which the court can declare the said decision null and void,” ruled the court.

Part of the agreement was to see the government acquire a 40 per cent stake in the British firm. The court’s decision paves the way for the CBK to continue engaging the British firm in currency printing tenders.

READ: De La Rue in fresh push for currency printing contract

De La Rue has been contracted to print Kenya’s currency since Independence, but was only registered in Kenya as a company in February 1992. It has since built a factory in Ruaraka, Nairobi, to ease its operations.

The lobby was also challenging the extension of De La Rue’s currency printing contract with the CBK for 10 years starting 2011, arguing that it was done clandestinely and that it was marred by irregularities. It wanted the Registrar of Companies compelled to make public De La Rue’s top management.

READ: Currency printing cost rises sharply to Sh2.4 billion

Kituo cha Sheria sued the CBK, the Finance minister, the Attorney-General, the Registrar of Companies, and De La Rue.

Lady Justice Ngugi said in her ruling that Kituo cha Sheria failed to prove that the decision to award the contract to De La Rue was made without the input of the CBK as alleged, which made it difficult to grant the orders it had sought in its application. The judge also faulted the lobby for relying on Press articles, which she said were not well researched, as its primary evidence.

She advised the lobby to request documents from government institutions before lodging suits of a similar nature. One of the few documents Kituo cha Sheria had attached to its suit papers was a share sale agreement between Kenya and De La Rue, but it failed to convince the judge otherwise as it was unsigned.

Kituo cha Sheria had alleged that the decision was made based on directions from the Cabinet, and that the CBK had not been allowed audience as regards the deal. The lobby also wanted the court to compel the government and the CBK to make public the particulars of the deal it was to strike with De La Rue, arguing that all Kenyans have a right to the said information.

Lady Justice Ngugi again agreed with the respondents, who had said that it had not received any request for information regarding the procurement process, hence could not be accused of violating Kenyans’ right to information.

De La Rue, however, said that it would not have released the information in any event, as it is a private entity, hence has no obligation to release any information to anyone.

Kituo cha Sheria had questioned the procurement process, saying that the tender should have been advertised publicly to inject transparency into the process.

“While the zeal of the petitioners in ensuring that public entities conform with the law and the Constitution when they undertake projects and enter into contracts involving public finance is commendable, they are sorely lacking in concrete information which can assist in determining the issues in question,” she added.

Lady Justice Ngugi agreed with the CBK’s pleadings that the Public Procurement and Disposal Act does not outlaw direct procurement, and that the petitioners should have sought the various appellate mechanisms provided for in the Act.

CBK’s lawyer Waweru Gatonye had in his final arguments said that Kituo cha Sheria should have lodged their misgivings at the Public Procurement Administrative and Review Board (PPARB) rather than the Constitutional Court. Mr Gatonye said that the PPARB was the best platform for challenging any public procurement decision.

While the State did not respond to the allegations that it had violated principles of good governance, the judge said the petitioner had failed to prove that the CBK acted on directions from the government.

Kituo cha Sheria had accused the State of directing the CBK to extend the De La Rue deal by 10 years, which it said was illegal as the regulator cannot take instructions from any other entity as per the Constitution.

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