Companies

Ex-Kebs boss Mang’eli withdraws case after Dubai firm fraud claims

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Former Kenya Bureau of Standards managing director Kioko Mang’eli. PHOTO | FILE

A company linked to former Kenya Bureau of Standards (Kebs) boss Kioko Mang’eli has withdrawn a Sh296 million court claim filed against the State agency after allegations emerged that it is a shell company being used to fraudulently acquire the funds.

Geo Chem Middle East Limited has withdrawn the suit barely two months after a Dubai firm with a similar name claimed the Nairobi company is a shell corporation formed by Dr Mang’eli to defraud it of the colossal sum.

The firm has, however, not given reasons for withdrawing the suit.

The Nairobi-registered Geo Chem had sued Kebs and the Kenya Revenue Authority (KRA) claiming it is a local subsidiary of the genuine Dubai company. It held that the amount was owed out of a petroleum products inspection contract with Kebs.

Dubai’s Geo Chem appeared in court in July and told Justice David Onyancha that it did not have a Kenyan subsidiary and that it had not instructed any lawyer to file a claim in court.

“Take notice that Geo Chem Middle East Limited wholly withdraws the suit against Kebs and KRA,” the court filing reads.

The move comes after Justice Onyancha ordered that officials and lawyers of the Nairobi-registered Geo Chem appear in court to answer to the accusations.

Dr Mang’eli was Kebs managing director when Dubai’s Geo Chem was awarded the tender in 2009 but the government called off the deal seven months arguing that procurement had been flouted.

READ: Dubai Kebs inspection agent sues Kenya firm for fraud

Dr Mang’eli left Kebs on September 22, 2009 after a month-long standoff with then Head of Public Service Francis Muthaura. He had refused to leave office following a confidential letter sent to then Industrialisation PS John Lonyangapuo.

His dismissal followed claims of mismanagement and alleged graft. A report by the Inspectorate of State Corporations to the Ministry of Industrialisation accused Dr Mang’eli of falsifying information to justify a salary increment.

The Sh296 million arose from unpaid invoices for product inspection that Geo Chem Dubai says it conducted. It says Dr Mang’eli used his knowledge of its ownership structure to register a shell corporation with a similar name and hoodwink the court into awarding it the sum.

A harshly worded letter sent by a director of the UAE firm — Pradeep Gopal — to Dr Mang’eli on August 2 has been attached as evidence in the suit. Mr Gopal in the letter demanded that Dr Mang’eli withdraw the suit before Mr Justice Onyancha and issue a public apology.

“Do take steps to immediately remove that case at the High Court at your personal expense. In addition, you must apologise for your unashamed act of trying to steal money from the Kenyan Treasury. Do keep away from our affairs completely and desist from making telephone calls to us,” the letter reads.

The former Kebs boss is yet to respond to the allegations. The case was meant to come up before Mr Justice Onyancha on October 15.

The State agencies and UAE’s Geo Chem had agreed to stop any proceedings in the suit until the Nairobi firm’s director Kenny Alois Kioko appears in court and answers to the accusations before his firm.