Economy

President rubbishes Auditor-General proposal to probe US Fed

Ouko

President Uhuru Kenyatta talks to Auditor-General Edward Ouko at State House on October 18, 2016 during the State House Anti-Corruption and Accountability Summit. PHOTO | EVANS HABIL |

President Uhuru Kenyatta has scoffed at plans by Auditor-General Edward Ouko to investigate activities of the Federal Reserve Bank of New York regarding alleged misuse of the $2 billion Eurobond cash that Kenya raised in 2014.

Mr Ouko had in May told MPs that his office would conduct a forensic audit of the funds outside Kenya after securing appointments with top US and UK financial institutions involved in the transactions.

“When you say that the Eurobond money was stolen and stashed in the Federal Reserve Bank of New York, are you telling me that the Kenyan government and United States have colluded?” Mr Kenyatta said Tuesday during an anti-corruption summit at State House.

“Who’s is stupid here? And he (Mr Ouko) says he wants to investigate the Federal Reserve Bank of New York,” he added.

The main opposition party CORD holds that the cash was embezzled but the government maintains the transaction was above board with every cent accounted for.

READ: Cord ‘takes steps’ to force US central bank to release Eurobond details

Probe transaction data

Mr Ouko in May said a team of forensic auditors would visit a number of financial institutions including JP Morgan, Federal Reserve Bank, City Transaction Services New York, JP Securities, Barclays Bank, ICB Standard Bank and Qatar National Bank to scrutinise transaction data.

READ: Kenyan auditors to visit US for special Eurobond probe

“We are now in a position to say that we have been given appointments to see JP Morgan and other banks that handled the $2 billion Eurobond transactions,” he told the National Assembly’s Public Accounts Committee (PAC).

The team was scheduled to first visit JP Morgan, which was the receiving bank for the Eurobond proceeds, before inspecting the transaction records at the Federal Reserve Bank where the contested cash was transferred to the Central Bank of Kenya (CBK) account.

Kenya in June 2014 floated a $2 billion bond in two tranches of $1.5 billion over 10 years and a five-year $500 million bond whose proceeds it deposited in JPMorgan Chase, New York.

Auditor-General Edward Ouko in his 2013/14 fiscal year report said that Sh54 billion of the total proceeds was drawn to settle a syndicated loan that the government took in 2012.

The rest was earmarked for infrastructure development and budgetary support.