KEMSA Scandal: Sh870m Paid to Covid Suppliers Ahead of 2022 Polls
In July 2022, the focus of the majority of the nation was on electoral politics and the policy shifts that accompany a new government.
At this time, business was generally slow for any enterprise that was not in the events, printing, fuel, or campaign-related industries.
However, for a handful of contractors hired by the Kenya Medical Supplies Authority (Kemsa) to import personal protective equipment (PPE) during the height of the Covid-19 pandemic two years earlier, it poured money.
A month before the 2022 General Election, Kemsa paid four companies 500 million shillings in a series of payments whose controversy could once again attract anti-corruption detectives to a government institution plagued by procurement scandals over the years.
Kemsa paid Shop “N” Buy Ltd (Sh332.5 million) on July 8 and July 27, as well as Medilife Biologicals Ltd (Sh110 million) and La Miguela Holdings (Sh60 million).
According to internal documents obtained by GossipA2Z, Kemsa paid six suppliers of Covid-19 protective gear Sh869.6 million in the five months preceding the 2022 General Election.
The payments were made despite an active investigation by the Ethics and Anti-Corruption Commission (EACC) into Kemsa’s procurement of protective equipment in 2020 when Kenya was paralyzed by the Covid-19 pandemic.
The conclusion of the EACC’s investigation could result in the prosecution of Kemsa officials and suppliers implicated in any wrongdoing.
Yesterday, Director of Public Prosecutions Noordin Haji confirmed that the investigation is nearing its conclusion.
On February 23, the file was returned to the EACC for the completion of a few details before charging the suspects.
EACC investigators are confirming the cost of the protective equipment at the time Kemsa contracted dozens of companies to supply it, to compare it to the State agency’s payments.
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“We need to know who received the money, when, and where. It requires assistance from other nations, particularly in terms of pricing,” Mr. Haji stated.
As press time approached, Kemsa had not responded to our inquiries.
When news of Kemsa’s questionable procurement of PPEs became public in 2020 as a result of an investigation by The Nation, then-President Uhuru Kenyatta gave investigative agencies 21 days to ensure the prosecution of those involved. Nothing ever resulted from this. To date, no information about the directive has been made public.
The Public Investments Committee (PIC) of the National Assembly also investigated Kemsa and published a report recommending the prosecution of certain individuals and the investigation of others.
Nearly two years have passed since the House adopted the report, and no one has been charged.
Once committee reports have been adopted, investigative agencies are free to use the findings in their investigations and efforts to prosecute those implicated.
According to PIC, Kemsa paid astronomically inflated prices for protective equipment such as masks.
Kenya was unable to account for at least Sh17 billion (mostly donor funds) intended for the purchase of PPE for medical professionals and the general public against Covid-19 as a result of the procurement mess.
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The Nation has determined that Shop “N” Buy Ltd was the largest recipient of Kemsa’s payments in 2016, receiving a total of Sh498.7 million in three installments.
On September 7, 2022, just two days after the Supreme Court upheld President William Ruto’s election, the third installment was paid.
Reversed letter
Shop “N” Buy was the target of the PIC investigation. Because Kemsa’s letters promising to pay the company were irregularly backdated.
Pamela Kaburu, a secretary in the office of former procurement director Charles Juma. Admitted to the committee that she was instructed to retroactively date the letter for Shop “N” Buy.
The PIC report suggested an investigation into those who backdated the letter.
The incorporation of Shop “N” Buy occurred on February 14, 2020.
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Three months later, it won a Sh970 million bid from Kemsa to provide 100,000 PPE kits.
The company is completely registered to James Kipketer Cheluley. He insisted that neither he nor the business had done anything wrong.
Other established companies that had been stocking PPEs before the pandemic were neglected.
According to the PIC report, some established and seasoned businesses were denied supply contracts. Because they insisted on adhering to Kenya’s public procurement regulations.
Kemsa paid the second largest recipient, Nairobi Enterprises Ltd, first in the previous year.
The company is one of the well-established companies that the PIC discovered. To be dissatisfied with their adherence to the rules.
Co-founder Rajan Dhahani told the committee that his company was mistreated after supplying Sh200 million worth of PPEs.
“The EACC should investigate how Kemsa’s upper management processed payments to certain suppliers. Companies, such as Harleys Limited and Nairobi Enterprises Limited, that insisted on adhering to the procurement law were denied payment, according to the PIC report.
The incorporation of Nairobi Enterprises Ltd occurred on August 16, 1984. It is owned by Mr Dhahani, Perviz Dhahani Rajnikant and Saroj Rajnikant Dhahani.
Medilife Biologicals, the third largest recipient, received Sh110 million in two installments. Both payments occurred in July 2022.
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Mishra Pallavi and Soyuz Ranjan Mishra are the proprietors of the business.
The business was incorporated on January 7, 2017. It has been tasked with providing 200,000 KN95 masks and 20,000 disposable masks. The two contracts were worth Sh230 million.
Between July and September 2022, La Miguela Holdings received Sh90 million. Similar to Shop “N” Buy, the company received payment in three equal installments.
James Njuguna Kuria and Jane Wairimu Njoroge founded the business on March 21, 2014.
In the past, La Miguela has supplied fire equipment to Kemsa Worth Sh400,000. It won a Sh180 million contract over more experienced medical suppliers.
Mr. Njuguna explained to PIC that he sought a supply contract with Kemsa. Out of compassion for a friend who had contracted the Coronavirus.
Abyssinia Group of Industries (Sh18 million), Trippleage Investment Ltd (Sh13 million), and Pasaiba Tourmaline Ltd (Sh4.5 million) also received payment for PPE supplies last year.
Abyssinia Group, a company primarily engaged in the production of steel and iron. Was awarded a Sh27 million contract for the delivery of 30,000 N95 masks.
The company was founded by Jateen Patel, Mahendra Danabhai Hathibhai, and Indra Patel Mahendra on November 23, 2007.
Trippleage Investment won a bid to provide KN95 respirators. The company was incorporated on December 9, 2013, and Ali Abdoul Maalim is the sole owner.
Pasaiba Tourmaline, a distributor of medical supplies, won a contract to supply Kemsa with KN95 masks.
The company was incorporated on April 9, 2012, and Irene Chemutai Rop and Amos Kipkoech are its owners.
KEMSA Scandal: Sh870m Paid to Covid Suppliers Ahead of 2022 Polls
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