StanChart says ex-Youth Fund chair was paid part of lost cash

Bruce Odhiambo, former chair, Youth Enterprise Development Fund. PHOTO | FILE
Bruce Odhiambo, former chair, Youth Enterprise Development Fund. PHOTO | FILE 

Former Youth Enterprise Development Fund (YEDF) chairman Bruce Odhiambo got money from a company suspected of receiving Sh180 million from the fund through a dubious IT contract, Parliament was told on Tuesday.

Standard Chartered Bank submitted to the Public Investment Committee (PIC) details of numerous transfers made to Mr Odhiambo’s account in a different bank from a StanChart account held by Quorandum Limited, the firm at the centre of the scam.

David Idoru, the head of retail banking at StanChart, told the committee that on several occasions between March 2015 and March 2016, the Quorandum account paid millions to Mr Odhiambo’s personal account at Co-operative Bank.

It was, however, not possible for the committee to immediately get details of why the cash transfers and payments were made.

“Mr Odhiambo is not a client of Standard Chartered Bank so we are not in possession of his bank details,” Mr Idoru told the committee.


The bank statements submitted to Parliament show that in one instance, Mr Odhiambo is detailed as a supplier of equipment to the firm, while in another as a consultant.

This is the first time Mr Odhiambo has been directly linked to Quorandum Limited, the company at the centre of the loss of public funds at the YEDF.

Mr Idoru submitted the documents in response to demands by MPs that the bank should offer details of payments to Mr Odhiambo in an effort to resolve the mystery behind the massive loss of funds.

Suspended YEDF chief executive Catherine Namuye had earlier told the committee that she was under immense pressure from unnamed board members to make payments to Quorandum.

Ms Namuye detailed how she executed a board decision based on the board’s own agenda for the ICT and Enterprise Resource Plan (ERP) strategy.

Mr Odhiambo, a former music producer, last month resigned as chair of the YEDF one year before the end of his tenure.

He is on the spot for unilaterally appointing Ms Namuye to be the sole signatory of the YEDF account held at Chase Bank that resulted in the loss of Sh180 million.

Ms Namuye transferred the money in two instalments, 10 days after Mr Odhiambo wrote to Chase Bank informing its managers of the change in signatories.

Chase Bank has since told the PIC that its management immediately took note of the irregular transactions and alerted the anti-money laundering watchdog - Financial Reporting Centre - but no action was taken.

At the time of reporting to the FRC, only Sh6.4 million out of the Sh115.7 million in the YEDF account had left the bank.

It was also revealed that during the lifetime of the account, Quorandum had only received Sh3,000 and payments totaling millions had been unheard of.

Chase Bank pegged its decision to obey Ms Namuye’s instructions to transfer the funds on account of the due diligence conducted on the YEDF.

The fund had obtained the relevant documents required for purposes of authorising the transactions, including board extracts, contracts and invoices between the fund and Quorandum as well as reporting suspicious transactions to the FRC.

Youth Affairs minister Cecily Kariuki recently told Parliament that President Uhuru Kenyatta did not act on recommendations by the Inspectorate of State Corporations (ISC) calling for the sacking of the entire YEDF board in the wake of the suspect IT contract.


The YEDF’s decision under the chairmanship of Mr Odhiambo to invest surplus money in commercial banks instead of lending it to the youth has also come under scrutiny.

Jane Mugambi, the former State Corporations Advisory Committee (SCAC) chief executive officer, told Parliament that the action meant the board had chosen to act in disregard of Treasury circulars and in breach of Section 12 of the 2007 order establishing the fund.

A director of Quorandum Limited has been reported to have used proceeds of the stolen YEDF cash to purchase a five bedroom house in Lavington, Nairobi.

Parliament has directed the Assets Recovery Agency (ARA) to obtain a court order stopping the transfer of the property purchased with the loot.

The directors of property developer Duchess have informed Parliament that Ngamau Mukuria, a director of Quorandum, had approached them to purchase a residential apartment at a cost of Sh48 million.

Quorandum opened the Standard Chartered account in 2002, which operated on low balances until March 2015 when it started handling millions of shillings.

The bank said it took steps to report the transactions to the FRC as is required by law.

The bank was asked to furnish the committee with bank statements of Quorandum Limited from November 2002 to January 2015 as well as instruction details to the bank on transactions made to Mr Odhiambo.