Team accuses City Hall of frustrating Sh5bn loan probe
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The Local Authorities and Funds Accounts Committee said officials at City Hall were deliberately “taking the committee round in circles” in the hope that Parliament will be dissolved before it adopts the report.
A parliamentary committee probing the controversial Sh5 billion Equity Bank loan to the City Council of Nairobi (CCN) in April last year has reported attempts by City Hall to frustrate its efforts.
The Local Authorities and Funds Accounts Committee, which will sit to deliberate on the matter for the last time Wednesday before compiling a report, said officials at City Hall were deliberately “taking the committee round in circles” in the hope that Parliament will be dissolved before it adopts the report.
The team, chaired by Wundanyi MP Thomas Mwadegu, warned City Hall officials that their tricks would not succeed even if the Tenth Parliament is dissolved.
“We have every reason to believe that there are attempts on the part of City Hall to delay our investigations. But I want to tell you that we shall write and present our report for adoption before we go home with or without your input,” said Mr Peter Mwathi, a committee member, at a meeting between Equity Bank, CCN and the Local Government ministry Tuesday.
Mr Mwathi raised the issue after Town Clerk Tom Odongo failed to present a report on the list of creditors the council paid after securing the loan from the bank.
“The work has been tedious and the list we have forwarded to the Auditor-General is incomplete. Auditors have had no time to do reconciliation,” said Mr Odongo.
The committee last week adjourned its sittings to allow the bank, City Hall and the Auditor-General’s office to reach an agreement over the way the loan was procured.
Equity Bank CEO James Mwangi had appealed to the committee to be allowed more time for consultation to resolve the outstanding issues after tabling the original copy of the loan agreement for the first time.
He said neither the CCN nor the Auditor-General’s office had requested the documents or assistance from the bank in production of the documents, which the council failed to provide to auditors and the committee.
Settling debts
Mr Mwadegu had ordered the council to produce the original contract entered with the bank to secure the loan, which it says it used to settle debts owed to statutory bodies and other creditors Tuesday.
The council borrowed the money to offset a Sh4.3 billion debt owed to statutory agencies like Laptrust, Lapfund, NSSF and NHIF. It also used Sh862 million to pay sundry creditors.
Tuesday Mr Mwathi, who co-chaired the session, criticised the council for lacking the “goodwill” to either present documents or cooperate with the committee in its investigations.
Nyakach MP Pollyns Ochieng accused the council of holding the country at ransom by holding the committee from writing its report, which must be tabled before the House adjourns.
The committee also took exception to the manner in which former Town Clerk Philip Kisia and then Director of Legal Affairs Aduma Owour and his deputy, Wilberforce Wambulwa, passed the buck on who approved the loan contract before it was signed.
While Mr Kisia told the committee that he signed the contract with the Equity after due diligence was done by the Council legal officers. Mr Aduma said he never saw or approved the final document.
