Former NHIF boss, chairman face off in Sh116m fraud case
Meridian Medical Centre directors Peter Wambugu (right) and Ndiba Wairioko at the High Court October 2, 2013. Photo/Phoebe Okall
What you need to know:
Mr Kerich was charged alongside four others and the Meridian Medical Centre in connection with the alleged loss of millions meant for civil servants’ medical cover.
The prosecution plans to call 40 witnesses, including the fund’s former chairman Richard Muga who was at the centre of the boardroom row over the Meridian deal.
The hearing of the case will start on January 27 and ran for five days.
Former National Hospital Insurance Fund boss Richard Kerich has denied a charge of conspiracy to defraud the fund of Sh116 million in a legal battle that will offer a peep into boardroom fights that gripped the health insurer last year.
Mr Kerich was charged alongside four others and the Meridian Medical Centre in connection with the alleged loss of millions meant for civil servants’ medical cover.
Marwa Chacha, David Kipruto, Peter Wambugu and Ndiba Wairioko also denied the charge and were released on a cash bail of Sh2 million each.
The hearing of the case will start on January 27 and ran for five days.
The prosecution plans to call 40 witnesses, including the fund’s former chairman Richard Muga who was at the centre of the boardroom row over the Meridian deal.
Mr Chacha and Mr Chingi served as NHIF managers for strategy and quality assurance respectively while Dr Wambugu and Dr Ndiba are directors at the Meridian Medical Centre.
“On diverse dates between December 21, 2011 and February 28, 2012 at NHIF building in Nairobi the accused conspired to defraud the National Hospital Insurance Fund of Sh116.9 million by entering into a contract with Meridian Medical Centre Limited,” read the charge sheet.
Mr Chacha and Mr Kerich face separate charges of allegedly failing to comply with procurement law that calls for open tendering and that of abuse of office.
Dr Wambugu and Dr Ndiba are accused of obtaining money by pretence while they knew that Meridian has no capacity to provide medical services to the civil servants.
The two are accused of obtaining Sh18 million from NHIF on March 13, 2012 with intent to defraud.
A parliamentary committee in May 2012 found out that Meridian Health Group and Clinix Healthcare were paid Sh116 million and Sh202 million respectively for services to civil servants in some outlets that do not exist.
This prompted Dr Muga to suspend Mr Kerich who was, however, reinstated by former Medical Services minister and now Kisumu Senator Anyang Nyong’o just hours after the suspension.
Prof Nyong’o later ousted Dr Muga in a day-long boardroom drama that saw former Prime Minister Raila Odinga suspend the fund’s board.
The choice of Dr Muga as a prosecution witness along with Titus Ndambuki, a former permanent secretary, will offer insights into board operations that led to the award of contracts to Meridian.
The charges come as Meridian fights for a compensation of Sh800 million from NHIF over the cancellation of the contract. But NHIF has denied breaching the contract when it terminated the agreement in June last year.
Meridian is seeking Sh118 million in lieu of three months’ notice, Sh531.7 million being the loss of profit as a result of termination of the alleged three-year contract and Sh1118 million for outstanding debt for the services offered prior to cancellation of the deal.
