Economy

Anglo Leasing debts hit Sh17.5bn despite payments freeze

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National Treasury building. FILE PHOTO | NMG

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Summary

  • Debts linked to the Anglo Leasing type of contracts increased 3.6 percent to Sh17.5 billion at the end of last year even as payments were suspended pending investigations and litigation.
  • National Treasury has published the debt owed to the firms linked to the Anglo Leasing scandal that were contracted in 2002 and 2003 during President Mwai Kibaki’s regime.
  • The debts are owed to five companies including LBA Systems, Sound Day Corporation, Apex Finance, Ciara Systems and Midland Finance for security contracts.

Debts linked to the Anglo Leasing type of contracts increased 3.6 percent to Sh17.5 billion at the end of last year even as payments were suspended pending investigations and litigation.

National Treasury has published the debt owed to the firms linked to the Anglo Leasing scandal that were contracted in 2002 and 2003 during President Mwai Kibaki’s regime.

The debts are owed to five companies including LBA Systems, Sound Day Corporation, Apex Finance, Ciara Systems and Midland Finance for security contracts.

Treasury did not disclose whether the dollar and euro denominated loans increased because of currency valuations or inclusion of interest charges.

The debts include Sh2 billion owed to LBA Systems for the national early warning system for meteorology department charging five percent interest, repayable in 13 quarterly instalments.

Sound Day Corporation is owed Sh1 billion for providing Kenya Police equipment and charges six percent interest on the dollar loan.

Apex Finance was supposed to be paid Sh522 million between 2002 and 2005 for Police Airwing support and had charged the country 3 percent interest.

Ciara Systems is owed Sh4.4 billion for project Flagstaff at unspecified interest rate while LBA Systems had charged five percent for its Sh3.4 billion loan for Kenya Prison.

Similarly, Midland Finance charged Kenya five percent on a Sh5.9 billion loan for Administration Police Telecommunication Equipment.

“The above listed security related contracts remain suspended pending completion of investigations/litigations,” Treasury said in the debt register.

Kenya has paid off some of the contractors linked to the controversy over billions of shillings paid out to a firm linked to the Anglo Leasing scam, which involved state contracts worth Sh70 billion awarded to non-existent firms.

In 2014, the Treasury reached a negotiated settlement of the long-running legal dispute with one of the 13 Anglo Leasing companies, clearing the main hurdle that had delayed plans to raise the first Eurobond.