Eyes on Uhuru over Sh180m Youth Fund scam

President Uhuru Kenyatta is responsible for the continuation in office of embattled Youth Enterprise Development Fund (YEDF) chairman Bruce Odhiambo, 24 days after the Inspectorate of State Corporations (ISC) recommended the sacking of the entire board, Parliament was told on Wednesday.

Public Service, Youth and Gender minister Sicily Kariuki told the National Assembly’s Public Investment Committee (PIC) that she had written to the President through his Chief of Staff, Joseph Kinyua, asking him to suspend the board to facilitate investigations but no action has so far been taken.

Parliament Wednesday demanded the immediate suspension of Mr Odhiambo and the entire YEDF board pending conclusion of investigations into the alleged loss of Sh180 million belonging to the fund.

“We are asking the President to hear us loud and clear. We want one Bruce Odhiambo and the entire YEDF board suspended with immediate effect as investigations continue,” PIC chairman Adan Keynan said.

The committee has summoned Mr Kinyua to explain why action has not been taken against Mr Odhiambo and the board as recommended by the minister and the ISC.

PIC is investigating how Sh180 million was transferred in two tranches of Sh115 million and Sh65 million to Quorandum Limited, 10 days after Mr Odhiambo appointed Catherine Namuye, the suspended acting chief executive, as the sole signatory to the fund’s account.

Ms Namuye allegedly contracted Quorandum to design a computer management software for the fund before making the payments.

But Mukuria Ngamau, a director of the controversial firm, on Tuesday linked Ms Namuye to the scam, saying she was the sole contact person at the YEDF.

Mr Ngamau also revealed that he had paid Sh115 million of the total amount he received to Donny Collins Reeves, an American consultant Quorandum and YEDF hired to design the software.

READ: Youth fund chair on the spot over Sh180m bank deposit loss

On Wednesday, Ms Kariuki shocked MPs when she tabled a separate ICT strategy for the fund covering the period 2013-2017 that was developed by Micro Flex Limited at a cost of Sh5.9 million and whose implementation is underway.

Ms Kariuki told MPs that the ministry was reviewing a number of options under the State Corporations Act to implement recommendations from the inspectorate.

The minister said she had directed the fund to inform the banks that any communication regarding change in bank signatories must be accompanied by certified board minutes.

Ms Kariuki told PIC that she had ordered the blockage of Mr Odhiambo and other board members from accessing and transacting any business on behalf of the fund.

“I have barred the chairman and board members from accessing facilities to allow for investigations. I didn’t suspend the chairman because I don’t have that power. I have advised the appointing authority (President) on the matter,” she said.

YEDF acting CEO Emanuel Odera and Public Service principal secretary Lillian Omollo said it has been agreed that all facilities, including a Sh12 million Toyota Prado that the fund procured on the request of Mr Odhiambo, be withdrawn.

The MPs demanded to know how a non-executive chairman could enjoy use of top-of-the-range vehicles, bodyguards and drivers. 

Ms Kariuki denied the existence of a “super chairman” at the fund, saying the ISC advised that the entire board step aside to facilitate investigations by the Directorate of Criminal Investigations, the Ethics and Anti-Corruption Commission, the Auditor-General and the ISC. 

Ms Kariuki asked the ISC to carry out a comprehensive management audit on the fund and governance challenges facing the board.

“The report of this audit is expected by March 31, 2016.

“The ISC, from their preliminary inquiries, has recommended that the directors of the fund step aside to pave the way for further investigations,” she said.

Deposit account

The minister said the YEDF adopted the recommendation of the audit committee on December 1, 2015 to transfer Sh102.3 million held in a deposit account at Chase Bank to the development account at KCB.

The fund also transferred Sh120 million to its operations account at the KCB.

Mr Keynan Wednesday said that the contract signed between the youth fund and Quorandum, “on the face of it, shows blanket theft and abuse of office.”

“Taking into account that the ISC had written a letter saying the YEDF chair and board are required to step aside with immediate effect,  given that the CS has written to Mr Kinyua, taking into account Article 10 of the Constitution on national values and principles of governance, Article 94 (4), Article 95(4)C) and equally Article 75 on conduct of State officers and Standing Order  206(c) we feel as a committee that the ministry should expedite filling the chief executive’s post at the fund through competitive process ,” Mr Keynan said.

The MPs will this morning question the ISC over its investigations into the matter.