Contractor says Waiguru used her as NYS front

A businesswoman at the centre of investigations into the theft of Sh791 million from the National Youth Service (NYS) Monday turned her guns on former Devolution and Planning secretary Anne Waiguru, claiming that her prosecution is a ploy to divert attention from a massive funds misappropriation syndicate that Ms Waiguru commanded during her term in office.

Josephine Kabura says in an affidavit filed in the Civil Division of the High Court that Ms Waiguru not only helped incorporate the companies that were used to receive the Sh791 million, but also helped fast-track payment of the colossal sum.

The 33- year- old Kabura says she met Ms Waiguru in 2012 and insists that the Sh791 million payments made to her companies - Form Homes Builders, Roof & All Traders, Reinforced Concrete Technologies - were for building materials delivered to the NYS.

Investigators have claimed that Ms Kabura’s companies were used to make fraudulent payments from the NYS amounting to Sh791 million,
which were then funnelled to over 20 other individuals and companies.

Ms Kabura now says Ms Waiguru was the source of capital she used to deliver her first NYS tenders, and that it was the minister who advised her to set up another business as a front that would help divert any suspicion over the hefty payments from the NYS.

“CS Waiguru provided seed capital to start supply of the road construction materials and the monies were brought to me by Loise Mbarire (Ms Waiguru’s elder sister), amounting to Sh24 million. Prior to the supply of road construction materials in 2014, the CS Waiguru had assisted me secure other contracts with about 30 local purchase orders with value in excess of Sh400 million.’’

The businesswoman’s suit has also implicated Ms Mbarire, accusing her of acting as a conduit for several cash exchanges in exchange for a portion of the proceeds of Ms Kabura’s firms engagement with the NYS.

Ms Kabura insists that all payments the NYS made to her firms were legitimate -- having delivered the building materials, a fact Ms Waiguru knew.

“CS Waiguru also stated that in big deals there are normal government bureaucratic delays in remittance of payments and she therefore advised that it would be wise to have some other business as a front to rely on. I floated the idea of a computer accessories shop and she loaned me a sum of Sh1 million,” Ms Kabura says.

The businesswoman says other individuals in the syndicate include political analyst Mutahi Ngunyi, Ms Waiguru’s personal assistant Betty Maina, Hassan Noor, who is the director of planning at the NYS, Adan Harakhe, who was the deputy director- general at the NYS, and Ms Mbarire.

READ: NYS scam suspects face 14 years in jail over Sh791m loss

She claims that the said individuals all met after the Central Bank of Kenya questioned suspicious payments made by the NYS, and that they blamed Mr Harakhe for processing several payments amounting to Sh695 million behind their backs.

Ms Kabura reckons that it was during the meeting that Mr Ngunyi floated the idea of painting Ms Waiguru as a whistleblower in an attempt to divert attention from the massive loss of funds through the Integrated Financial Management Information System (IFMIS).

It was also during the said meeting that Ms Waiguru introduced her to Banking Fraud Investigation Unit boss Joseph Mugwanja whom she has accused of using her and 25 other individuals as pawns in the scheme to divert attention from massive misappropriation of funds from the NYS.

“This was done ostensibly to pave the way for Mr Mugwanja to officially take charge of investigations and the CS Waiguru to become the whistleblower. The manner in which investigations have been conducted, it is my view that certain individuals are being shielded from blame while others are being blamed.’’

Ms Kabura says Ms Waiguru in 2014 gave her a “secure phone” which could not be easily traced, and directed that she only switch it on between 7am and 9am, then again between 7pm and 9pm on a daily basis. It was at these times that Ms Waiguru would issue Ms Kabura with instructions on the payments from the NYS and who to pay part of the profits to.

She insists that Ms Waiguru knew that the Sh791 million payments to her three firms were genuine business and that materials had been supplied for the tenders in question.

‘‘The BFIU has only questioned me about the Sh695 million attempted fraud at NYS, which I have written a statement on and they have never taken my statement on the Sh791 million for which I have been charged in court,” she says.

Ms Kabura says her initial arrest in July was supposed to be a sham to calm down the public, but that afterwards investigator Jeremiah Sautet and Mr Mugwanja tricked her into signing bank documents, which would implicate her in the alleged theft of Sh791 million from the NYS.