Economy

Kenya Ports Authority boss faces graft case over Sh241m scandal

Kenya Ports Authority (KPA) Finance Manager Patrick Nyoike has been arrested after he was linked to the irregular payment of Sh214 million to a private company owned by his wife.

Mr Nyoike was arrested alongside four other suspects who have been linked to the alleged siphoning of money from KPA to Nyali Capital Limited. The suspects are likely to be arraigned in a Mombasa court today.

They were arrested by Ethics and Anti-Corruption Commission (EACC) detectives in Mombasa at the weekend. EACC confirmed in a Press statement that Mr Nyoike and the other suspects were being held at Central Police Station in Mombasa.

They were arrested after the Director of Public Prosecutions (DPP), Noordin Haji, gave the go-ahead.

Mr Haji recommended the arrest of Mr Nyoike, KPA clerical officer Isaac Obunga and Jacinta Wambugu, who is the Nyali Capital Limited (NCL) general manager and also Mr Nyoike’s wife.

The others are the company’s directors Alfred Hinga and Peter Ndichu. Mr Hinga is Mr Nyoike’s brother. Mr Nyoike, who has expressed interest in the KPA CEO’s position, is accused of being at the centre of irregularly awarding NCL the millions of shillings between 2013 and 2017.

In a statement, Mr Haji said Mr Nyoike used his office to improperly confer the benefit of Sh214 million to NCL by irregularly facilitating the definition of the private company, which was not part of KPA suppliers, as a vendor in the parastatal’s portal without authority.

Mr Haji further said that Mr Nyoike had facilitated NCL’s micro finance business, to finance KPA suppliers, Local Purchase Orders (LPOs) and Local Service Orders (LSOs) and thereafter utilised the KPA system to have the principal and the interest forms from the said suppliers remitted to the company by KPA.

“It is therefore, clear from the evidence that Patrick Wambugu Nyoike abused his office by facilitating Nyali Capital Limited to finance the KPA suppliers and to receive payments directly from KPA,” said Mr Haji in the statement.

Mr Nyoike is also accused of failing to declare that his wife and brother were the GM and director of NCL respectively, which amounted to conflict of interest. The DPP added that there was no contractual relationship between KPA and NCL, yet there were letters by Mr Obunga, who irregularly defined NCL as a vendor.

A source at EACC revealed that all the irregular payments to NCL were being processed by Mr Obunga.

“In effect the duo turned KPA to debt collector for monies loaned by NCL to the authority’s suppliers,” said the source.

The suspects face four charges among them conspiracy to commit an offence of corruption, abuse of office, failure to disclose a private interest and dealing with suspect property.

EACC has been investigating the dubious transactions over the last three years. Its findings indicate that KPA was used to recover funds that 58 of its suppliers owed NCL.

All the 58 had financing agreements with Nyali Capital.

“Graft and impunity at the port and other State corporations must be confronted from all directions,” said EACC chief executive Twalib Mbarak.

KPA has no substantive CEO after Daniel Manduku resigned. He was succeeded by the agency’s general manager for engineering, Rashid Salim, in an acting capacity.