Dubai firm says Kebs and KRA staff colluded to steal Sh300m
Former Kenya Bureau of Standards managing director Kioko Mang’eli. PHOTO | FILE
What you need to know:
Geo Chem Middle East says in court papers that Kebs knew that a Nairobi-registered company with a name similar to its own had been registered by the agency’s former managing director Kioko Mang’eli in a bid to dupe the State into paying him the sum.
A Dubai-based firm has claimed that Kenya Bureau of Standards (Kebs) officers colluded with the agency’s former managing director Kioko Mang’eli and some Kenya Revenue Authority employees in an attempt to defraud it of Sh300 million.
Geo Chem Middle East says in court papers that Kebs knew that a Nairobi-registered company with a name similar to its own had been registered by Dr Mang’eli in a bid to dupe the State into paying him the sum.
The Dubai firm was an inspection agent with Kebs in 2009 but its contract was cancelled seven months into the deal. It claims Kebs still owes it the Sh300 million.
The Kenyan-registered Geo Chem Middle East Limited sued Kebs and KRA claiming the sum as compensation for the contract.
But the Dubai firm appeared in court claiming that it was the one that had a petroleum products inspection contract with Kebs, and that the Nairobi firm is a shell corporation that Dr Mang’eli was using to fraudulently claim its dues.
“Kebs and KRA were willing participants in what would have ended in a massive loss of public funds. The certificate of compliance issued five years after Geo Chem Middle East’s (Dubai) left Kenya should have raised flags,” the firm’s lawyer Fred Ngatia said on Friday.
The Nairobi-based Geo Chem had claimed to be a subsidiary of the Dubai company, and that it was to collect Sh300 million on behalf of its parent firm.
Mr Ngatia held that Kebs officials should have suspected the claim by the Nairobi firm which had indigenous Kenyans as its directors, as Geo Chem Dubai had only been represented by individuals of Arab descent when negotiating the 2008 oil inspection deal.
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 later arguing that procurement laws had been flouted.
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 Nairobi company associated with Dr Mang’eli has asked the court to withdraw the suit, but did not give reasons for withdrawal.
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