The integrity of the Kenyan government of President Mwai Kibaki, elected 18 months ago on an anti-corruption platform, is facing its first real test with investigations being launched into two multimillion-dollar contracts.
The investigations by the police anti-corruption unit and a watchdog committee of MPs centre on plans to buy a sophisticated $36-million passport equipment system from France. The inquiries have already led to the suspension of four senior civil servants after the government found ”serious irregularities” in one of the deals.
The episode is proving an embarrassment to President Kibaki, who pledged to combat the corruption that disfigured the regime of President Daniel Arap Moi.
One of his first steps was to set up a commission of inquiry into the billions of dollars syphoned off by Moi and his cronies — a haemorrhage which led to the suspension of IMF aid.
But John Githongo, the government anti-corruption chief, has warned in the Kenyan press that ”the corrupt networks that held the state hostage under the former regime have started attempting to regroup”.
The EU, the US and Japan said on Monday that much international aid was at risk unless there were detailed investigations into the corruption apparently still at the heart of government.
The passport scheme has now been cancelled along with another £29-million ($53-million) contract for the supply, from Britain, of forensic science laboratories for the police.
Both projects were to have been financed by a shadowy company, Anglo Leasing & Finance, and its UK agent which turns out to be a small property company in north-west England.
The central and still unanswered question posed by the Kenyan investigators is the precise provenance of Anglo Leasing.
Ministers have refused to reveal any details about it. However, The Guardian has learned that Anglo Leasing’s agent is a Liverpool-based firm, Saagar Associates, owned by a woman whose family has enjoyed close links with senior officials in the Moi regime.
The managing director of Anglo Leasing is a Swiss businessman, Michel Gruring. He insisted the firm was ”an offshore trust with a group of investors who invest in projects around the world”. He refused to reveal where the company was registered or to identify the investors. But he added: ”None of them are Kenyan.”
It was Saagar’s accounts manager, Colin Flynn, who signed both contracts.
Company records show Saagar Associates is owned by Sudha Ruparell, a 47-year-old Kenyan woman whose late husband Ashwin built up a property firm in northern England. Until January she lived in a mansion in Barnet, north London, but has since moved back to Kenya.
Ruparell is the daughter of Chamanlal V Kamani, the 72-year-old multimillionaire patriarch of a business family which enjoyed close links with senior officials in the Moi regime.
The family, through their company Kamsons, was responsible for the import of Mahindra jeeps from India for the police. Their poor performance turned the police into a laughing stock.
Last month Ruparell’s brother, Deepak Kamani, was interviewed by detectives after his name was mentioned in Parliament as one of those possibly involved in financing the passport deal. He was released without charge. None of the Kamani family responded to calls at their Nairobi business headquarters.
Suspended
The passport scandal broke on May 14 when the president’s office announced that ”serious irregularities” had been found. The four officials were suspended.
On the same day Anglo Leasing published a statement in the Kenyan press saying it was pulling out of the project because of ”adverse reports and publicity”.
It went on: ”We assure the government and the public that Anglo Leasing & Finance has complied with the required financial standards and procedures.”
A week later the auditor general published a critical report. He explained that as Kenyan passports had been open to fraud and forgery, international tenders for a computer system were invited in October 2001. By February 2003, after the new government had taken over, two sets of bids from international firms had been rejected on price and technical grounds.
Then, on the advice of the government’s IT department — whose director is one of the suspended officials — it was agreed to expand the system to cover visas and immigration border controls. But before this was announced, the home affairs department received an ”unsolicited technical proposal” for the new project from Anglo Leasing, which offered a price of £20-million ($36-million).
The supplier would be François Charles Oberthur of Paris — the world’s leading supplier of Visa and MasterCards. The auditor general said: ”The indications are that the firm [Anglo Leasing] may have had foreknowledge of the recommendation to enhance and expand the system.”
Despite the lack of competitive tendering Anglo Leasing was paid a ”commitment fee” of more than £600 000.
The auditor general said: ”The basis for determining the ability of the two firms to perform the contract is not clear.”
Oberthur declined to answer phone and e-mail requests from The Guardian.
Lawyers for Saagar and Anglo Leasing said the companies strongly denied foreknowledge of the passport system details. But the company’s future in Kenya seems to have been ended. Last week the finance minister, David Mwiraria, said the firm would not be considered for further contracts. As well as repaying the commitment fee, the firm voluntarily returned an advance fee of £2,5-million for the police laboratories contract.
The laboratories have never been built.
Anglo’s Liverpool lawyers said it had cancelled the contract because the land provided was inadequate, logistical difficulties, delays and adverse publicity.
One person who could shed light on these events is a US businessman living in Nairobi, Merlyn Kettering, who acted as a consultant for Forensic Laboratories.
A former development consultant for the US government and a business associate of the Kamani family, Dr Kettering was also a consultant for the computerisation of Kenya Airports Authority in the late 1990s. Dyntech’s address was given as Fulwood Park in Liverpool — the residential address of Ashwin Ruparell, according to Companies House records.
Kettering did not respond to e-mails seeking clarification. – Guardian Unlimited Â