Treasury sets aside Sh6bn for Anglo Leasing payments

Kenya Anti -Corruption Commission director, Mr
Kenya Anti -Corruption Commission director, Mr Aaron Ringera (left) and Mars anti-graft lobby group executive director, Mr Mwalimu Mati, after a public forum on fighting graft in Nairobi. 

Efforts by the Government to conclude negotiations on four of the Anglo Leasing type contracts by July have failed, fuelling anxiety that Kenyans stand to lose billions of shillings in the scam.

It has emerged that the Government had factored in Sh6 billion in the 2008/2009 Budget in the event that it lost in the negotiations.

But the money has since been diverted to other uses, after it became apparent that the negotiations on the contracts could only be concluded in the next fiscal year, said Treasury officials.

The details of the negotiations are contained in a report by a joint committee on Finance, Planning and Trade and the Budget Committee which was investigating inconsistencies in the 2009 Supplementary Budget which was tabled in Parliament on Wednesday.

Finance Minister, Uhuru Kenyatta and his Permanent Secretary Joseph Kinyua told the committee that the money set aside for the Anglo leasing payments were removed from the Supplementary estimates.


“This is because the next round of talks will fall in the next financial year and therefore it was pointless to factor in the amounts in the current fiscal year, ” says the report which concluded that the estimates had been inflated by Sh10.7 billion in what was said to have been computer or human error.

Imenti Central MP, Gitobu Imanyara, who blew the whistle on the flawed estimates last week had claimed the amount could be funnelled into questionable contract payments such as Anglo Leasing and the Ken-Ren projects, or a secret kitty.

The Anglo leasing scandal involved 18 contracts which were secured by the Kenyan Government through Anglo Leasing and related businesses in what could cost Kenyan taxpayers over Sh60 billion.

“Of the four security contracts, the Government had been sued and the cases are ongoing with the intention of arriving at a negotiated settlement” says the submission by Mr Kenyatta and the PS before the Committee contained in the report.

“An explanatory note on the payments was attached to the approved estimates stating that the amounts were for payment of security contracts under negotiations”

Even before the truth about the Anglo Leasing is known, new corruption scandals have emerged over the last one year involving oil and maize in what has dented the image of the Grand Coalition Government.

Among the four cases which had been filed in court is the Sh3 billion project Nexus in Karen involving Nedemar Technology BV who claim to have been given the contract to put up the project for the Department of Defence (DoD).

The other involved Globetel Incorporated (UK) and First Mercantile Securities Corporation in Sh6 billion contracts.

The two firms were contracted to supply a communications system for Postal Corporation of Kenya and installation of a multi-channel security system for the administration police.

Anti-graft crusaders are now raising fresh questions over the Anglo Leasing scandal, saying Kenyans still stand to lose billions of shillings in the negotiations.

“What are we negotiating on? Kenya never received any funds from the financiers,” says Mwalimu Mati, the executive director at Mars Group, an anti-corruption lobby. “We can only pay for what we received and therefore, the alleged negotiations are a fraud.”

In the scandal, Midland Finance and Securities Ltd obtained 36 irrevocable and negotiable promissory notes worth 49.6 million euros (Sh50 billion) from the government on May 29, 2003, for a sham loan of a similar amount which Kenya never received.