Ex-CEO conviction evokes memories of youth fund scams

Juma Mwangala Mwatata. PHOTO | PAUL WAWERU
Juma Mwangala Mwatata. PHOTO | PAUL WAWERU 

Barely a year after he was appointed chief executive of the Youth Enterprise Development Fund (YEDF) on March 25, 2011, Juma Mwatata Mwangala opted to roll out a multi-million shilling chicken hatcheries project for the youth countrywide.

But as noble as the whole concept may have seemed, especially in a country experiencing runaway unemployment among the youth, all did not go well for him.

In February 2013, Mr Mwangala was hounded out of office and put to task to explain the procurement of 1,050 hatching machines at a cost of Sh208 million without approval by the fund’s board.

Exactly five years later, an anti-corruption court in Nairobi found him guilty of unprocedurally contracting Comnete Technologies Ltd to supply, deliver and install the machines and handed him a choice to pay a Sh1 million fine or face six months in jail.

“Having considered all material evidence, l find the accused guilty and convict him of abuse of office charge,” ruled senior principal magistrate Felix Kombo ruled.

The conviction of Mr Mwangala rekindled the memories of the long chain of controversies that have dogged the top leadership of the fund since its establishment in 2006.

Mr Mwangala’s predecessor and first ever CEO of the fund, Umuro Wario, was suspended in 2009 and later bundled out of office over claims of irregularities in financial, recruitment and procurement procedures in the institution. The Ethics and Anti-Corruption Commission (EACC) later absolved Mr Wario of the claims.

Mr Mwangala’s successor, Roselyne Namuye (now deceased) also had a disgraceful exit from the YEDF following a damning verdict by the National Assembly’s Public Investments Committee (PIC) over the loss of Sh180 million at the fund.

The PIC recommended her prosecution alongside a former chairman of the fund, Bruce Odhiambo, for irregularly awarding Quorandum Ltd about Sh180 million for a contract to develop a suspect Information, Communication and Technology (ICT) strategy. The committee also endorsed the prosecution of the managing director of Quorandum Ltd, Mr Mukuria Ngamau.

“The youth fund lost Sh180 million through a well-orchestrated and dubious non-existent consultancy service scheme that was crafted by Mr Odhiambo, Ms Namuye and Mr Ngamau,” the PIC partly stated in its report and called for further investigations by the Ethics and Anti-Corruption Commission, the Directorate of Criminal Investigations and the Attorney-General.

Most of the Sh180 million was used to purchase luxury homes, pay debts and line the pockets of powerful individuals, law firms and companies, according to revelations by the PIC that were tabled in the House.

Mr Ngamau, for instance, used Quorandum’s Chase Bank account to receive money from the Fund and make several transactions with third parties, including the purchase of a duplex apartment in Nairobi’s Lavington estate.

The property was bought from Duchess Park Limited at a cost of Sh48.5 million.

The PIC dossier revealed that Mr Ngamau transferred Sh59,082,835 — part of the phony YEDF transactions — to Quorandum’s account at Chase Bank from where the funds were moved to Quorandum’s account at Standard Chartered Bank, Yaya Centre branch.

The funds were then used “to make further transactions and payments on various dates to third parties, including a payment of Sh3.3 million to Bruce Dominic Odhiambo’s account at Co-operative Bank, purportedly for payments of supplies and consultancy services,” the report says.

PIC says Quorandum separately received Sh115 million and Sh65 million from the Fund as payments for purported consultancy services to develop an ICT Strategic Plan and Enterprise Resource Planning (ERP) System.

Mr Odhiambo was dismissed as YEDF chairman by President Uhuru Kenyatta in the wake of the embarrassing scandal.

The President also sacked Sella Bogongo, Paul Gathura Ng’ang’a, Sabra Omar Hussein, Jane Mutinda, Mike Wamae, Clement Ayungo and Nicholas Mwaniki as members of the YEDF board.

Both Ms Namuye and Mr Odhiambo were on August 26, 2016 charged with 12 counts of corruption in relation to the loss of Sh180 million of taxpayers’ money.

They were charged alongside the directors of Quorandum Ltd, Mr Ngamau and Doreen Waithera, who were flown in from Mombasa to answer to the multiple charges before an anti-corruption court in Nairobi.

Ms Namuye and Mr Odhiambo were alleged to have received Sh4.5 million and Sh1.8 million in kickbacks from Quorandum that prosecutors said “they had reasons to believe was corruptly acquired from the Youth Enterprise Development Fund.”

Prosecutors claimed that between November 17, 2014 and May 4, 2015 in Nairobi, the suspects conspired to defraud the public through “unlawful payment of Sh180, 364,789 from the Youth Enterprise Development Fund to Quorandum Limited for services not rendered.”