Behind Closed Doors: Magnates Securing Exclusive Deals in the Rice and Cooking Oil Industry
In 2017, the Jubilee Party relied on the financial support of several donors to ensure that Mr. Uhuru Kenyatta and Dr. William Ruto retained the presidency.
Through the Friends of Jubilee Foundation, the party was able to raise billions of shillings for nationwide campaigns that were instrumental in Mr. Kenyatta and Dr. Ruto’s election to the positions of president and vice president, respectively.
Ms. Mary Wambui, who is a member of the foundation, contributed an undisclosed amount.
Four years after the elections, several government agencies sought Ms. Wambui for alleged tax evasion and possible money laundering.
In political circles, there were allegations that the charges were politically motivated.
The elections concluded, and Dr. Ruto was named the victor. On September 5, 2022, all seven judges unanimously upheld President Ruto’s victory after the Supreme Court rejected several petitions challenging the results.
Rewarding loyalists
The outcome rewarded those who remained loyal to President Ruto, and Ms. Wambui could not have fared better.
In just nine months, the Office of the Director of Public Prosecutions dropped tax evasion charges. Ms. Wambui was appointed chair of the Communications Authority of Kenya, and despite the controversy. Her companies are poised to earn billions in government contracts.
ALSO READ: UDA MP Exposes Ruto’s Fuel Tax Hike
Ruto insiders secure enormous contracts.
Wednesday, Trade Cabinet Secretary Moses Kuria presented the Senate. With a list of eleven companies contracted by the Kenya National Trading Corporation (KNTC). To import various commodities as part of President Ruto’s plan to reduce the cost of food.
Kuria informed the Senate that the Public Procurement Regulatory Authority had authorized KNTC to purchase rice, beans, cooking oil, and fertilizer directly from companies, without a competitive bidding process.
Mr. Kuria did not disclose the criteria he used to select the eleven companies, four of which are owned by a senior civil servant who may have a conflict of interest with a government agency.
Mr. Kuria stated that 22 businesses had been pre-qualified and could be hired to sell goods to the KNTC. We have already contracted for fifty percent of these.
Mr. Kuria’s documents included a financial statement detailing KNTC’s performance over the past five fiscal years.
Accounting irregularities
Curiously, there are accounting anomalies in the accounts that Mr. Kuria did not explain to the Senate, such as the listing of results for the fiscal year 2022/23 even though the year has not yet ended.
In the fiscal year 2021/2022, KNTC’s revenue increased to Sh2.7 billion from Sh999 million the previous year.
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During the same period, the parastatal had expenses of Sh268.1 million and a net income of Sh96.three million. KNTC’s revenue for the fiscal year ending June 30, 2022/2023 was Sh9.132 billion.
This represented a 70.32 percent increase compared to the previous fiscal year. Despite a decrease in expenses to Sh2.634 billion, or 1.75 percent, and a significant increase in revenue during the current fiscal year, the state-owned company’s net income decreased. Profit for KNTC decreased to Sh67 million. This represented a decrease of 30.3% in net income.
Contracted Businesses
Gossipa2z has determined that four of the contracted businesses are associated with Ms. Wambui.
Documents presented by Mr. Kuria to the Senate indicate that four companies associated with Ms. Wambui were awarded contracts to import edible oil, rice, and beans worth over Sh6 billion.
In addition, Purma Holdings will sell the KNTC 30,000 tonnes of rice and 20,000 tonnes of beans.
Mr. Kuria did not provide values for the cost of the food types, which would have been useful for determining how much companies will earn by selling them to the KNTC.
According to records from the Business Registration Service (BRS), the company was incorporated on February 13, 1996. Mrs. Wambui holds 1,300 shares as the sole shareholder.
In the documents presented to the Senate, Mr. Kuria did not provide specific information regarding the import value of each company.
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However, according to documents obtained by Nation, KNTC purchases each 20-liter jerrycan of cooking oil for $26 (Sh3,647).
The contractors pay $20 for each jerrycan (5h2,806). The 12,500 tonnes of cooking oil are equivalent to approximately 702,000 cans.
This means that Purma Holdings, owned by Ms. Wambui, will sell oil worth $18.2 million (Sh2.5 billion).
Profit for Purma will be $4.2 million (Sh589 million), excluding taxes and expenses such as shipping costs.
Charma Holdings Ltd was contracted to import 535,950 jerrycans of cooking oil and 20,000 metric tonnes of red kidney beans under a separate agreement.
The date of incorporation was July 31, 2007. Ms. Ruth Waithira Kinyanjui, a close associate of Ms. Wambui, is the sole shareholder with 3,600 shares.
Ms. Kinyanjui is a co-owner, along with Ms. Wambui’s daughter Evelyn Nyambura Mungai, of Nightingale Enterprises, an additional company actively doing business with the government.
Recently, Nightigale Enterprises won a multibillion-shilling bid to install fiber optic cables.
In the fiscal year 2023/2024, Treasury CS Prof. Njuguna Ndung’u allocated Sh1.3 billion for the digital highway project.
Ms. Kinyanjui’s mailing address on Charma Holdings’ BRS ownership records is the same as Ms. Wambui’s mailing address on other official government documents.
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Charma Holdings will sell cooking oil for $13.9 million (1.95 billion Shillings). After taxes and expenses, the company will earn $3,250,000 (Sh451,000,000).
Additionally, Mr. Kuria informed the Senate that Enterprise Supplies Ltd. will sell 6,250 tonnes of cooking oil to KNTC.
This equals approximately 350,000 20-liter jerrycans. Thus, Enterprise Supplies Ltd. will sell oil worth $9.1 million (Sh1.2 billion).
After taxes and expenses, the company’s net income will be $2.1 million (5h294.6 million). Enterprise Supplies lists Mrs. Wambui as the sole shareholder with 550 shares.
The date of incorporation was January 13, 2010. Evertec General Trading Company Ltd will also provide 6,250 tonnes of cooking oil to KNTC under a separate contract. Additionally, it will earn $2,100,000 (5h294,600,000) before taxes and expenses.
On 10 April 2008, Evertec General Trading Company Ltd. was incorporated. Mr. George Maina Wanjohi is the only listed shareholder.
Evertec General Trading Ltd. lists Ms. Kinyanjui, the sole shareholder of Charma Holdings, as a contact. Evertec’s ownership documents contain her contact information.
Behind Closed Doors: Magnates Securing Exclusive Deals in the Rice and Cooking Oil Industry
Tax fraud charges
Evertec was mentioned in court proceedings when the DPP sought to drop tax evasion charges against Ms. Wambui, her daughter Purity Njoki, and Purma Holdings.
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Ms. Wambui’s attorneys provided the court with a chronology of events, which included the freezing of her companies’ bank accounts.
Evertec General Trading Company Ltd, Njest Suppliers Ltd, and Daydot Ltd were the companies she mentioned.
She claimed that her bank accounts were frozen to prevent her from posting the Sh50 million cash bail granted by the court after she was indicted.
In 2018, Evertec General Trading Company Ltd was one of several companies listed as beneficiaries of the National Youth Service’s massive procurement mess.
The Directorate of Criminal Investigations (DCI) discovered that the company received Sh67.8 million; it was one of several firms investigated for procurement irregularities that led to the loss of billions of dollars in the scandal known as NYS II.
In court documents, Evertec Trading Company Ltd has not been charged or implicated in any wrongdoing.
Makram Imports and Exports Ltd, Standard Petroleum, and First Quality Supplies are additional local businesses that have won contracts with KNTC. Makram will sell KNTC 25,000 tonnes of rice.
The company began operations on April 27, 2021. Mr. Abdirahman Muhumed Kainan is the sole shareholder with 100 shares.
KNTC approached the company, which was just over a year old, about the rice contract.
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First Quality Supplies has been awarded a contract for the sale of 25,000 tonnes of Canadian fertilizer.
Mirram Chepkosgei Saina, who holds 90 shares, owns the company.
In April 2023, according to ownership records, First Quality Supplies borrowed $12,250,000 (Sh1.71 billion) and Sh2.1 billion from an unidentified bank.
The timing of the loan suggests that the company may have borrowed the money to finance its contract with KNTC, with the loan amounts indicating the enormous size of its fertilizer supply agreement.
The BRS lists Standard Petroleum Ltd as unaudited. This indicates that the company has not complied with the Companies Registry’s requirement that all companies declare their shareholding and directorship details. Consequently, ownership records are unavailable.
In his responses to the Senate, Mr. Kuria provided a document indicating that the company is listed as unverified, meaning that the KNTC and the Ministry may not be aware of the company’s owners.
Standard Petroleum has an agreement with the KNTC to sell 12,500 tonnes of urea.
Additionally, the state-owned company has contracted with four UAE-based firms to supply it with fertilizer, edible oil, and rice.
Invest Africa FZCO, Multi Commerce FZC, Lone Trading FZE, and Lamar Commodity Trading DMCC.
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On July 20, 2018, Lamar Commodity Trading registered a local subsidiary with the same name.
Lamar Commodity Trading (Kenya) Ltd. lists Abdi Mohamed Abdi (600 shares), Kenneth Dedan Kimathi (200 shares), and Antony Kimeu Muindi (200 shares) as its shareholders. KNTC will purchase 30,000 tonnes of NPK fertilizer from Lamar.
Shehena Commodity Ltd., Invest Africa’s local subsidiary, deals with KNTC.
Invest Africa owns 100 percent of the local subsidiary. KNTC will purchase 353,540 jerrycans of cooking oil from Shehena for $9,1,000,000 (Sh1.2 billion). The company will earn $2,100,000 (Sh294,600,000) before taxes and expenses.
Multi Commerce FZC will sell KNTC 2,276 million jerrycans of cooking oil worth $59.17 million (Sh8.3 billion) and 10,000 tonnes of rice. The business is registered in Dubai but lacks a local office.
KNTC will purchase from Lone Trading FZE 111.592 million cans of cooking oil worth $50.7 million (Sh7.1 billion) and 52,500 tonnes of rice.
Behind Closed Doors: Magnates Securing Exclusive Deals in the Rice and Cooking Oil Industry
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