MPs question Cabinet move on Sh650m deal

No feasibility study was done on De La Rue Currency and Security Printing Kenya Ltd before the Cabinet decided to invest Sh650 million for a stake in the company.

Treasury PS Joseph Kinyua on Tuesday told members of the Public Accounts Committee that the Finance Ministry only relied on valuation reports done on the company.

“There was no need for a feasibility study. We looked at parameters as we were buying into an existing business. We were to make assessment of the business based on the valuation report,” Mr Kinyua said.

The revelations sparked fears among MPs that the government could be buying into a shell only to be asked to inject capital later.

“Somebody just acted on a knee-jerk response given that there was an opportunity to invest. You know what is happening to Telkom Kenya where France Telcom came to invest and is now asking for billions from the government,” PAC chairman Boni Khalwale said.

The committee gave Mr Kinyua one week to respond to comments by Central Bank governor Njuguna Ndung’u that the bank was not party to an agreement believed to be in place for the purchase of the 40 per cent stake.

(READ: CBK lost Sh2.7bn in cash tender, MPs told)

The agreement allegedly binds CBK to print money at De La Rue for the next ten years.

Mr Kinyua said the contract existed in draft form and would have been signed were it not for a court case filed against the transaction by a private citizen.

MPs said Mr Kinyua needed to confirm that no monies were paid to De La Rue before the contracts were signed.

He, however, tabled before the team a valuation report done on De La Rue by Tyson’s Valuers which was forwarded to the auditor-general Edward Ouko for scrutiny before MPs discuss it.

Mr Kinyua had told the committee that CBK has both the valuation report and agreement and promised the committee copies.