Traders who made millions from Covid supplies
By Paul Wafula
Some business people chattered planes to China to physically fly in Covid-19 medical supplies.
Others waited for the goods — personal protective gear, ventilators and other medical items — to land in Nairobi, then snapped them up in bulk and waited.
Then there were those who waylaid donations at the airport and diverted them to private warehouses, waiting for the procurement whistle to be blown.
At the time, billions of shillings were flowing into government accounts as worried Kenyans absorbed the shock of the novel coronavirus landing in the country via London.
First, Kenya received Sh78.3 billion from the International Monetary Fund (IMF) to address the pandemic.
Then the World Bank wired Sh108 billion to the Central Bank of Kenya (CBK), as both budgetary support and extra resources to help fight the deadly viral infection.
Before this tidy sum hit the government bank accounts, the global lender had already extended Sh6.8 billion support to the Health ministry for preparations and response.
That was not all. The African Development Bank also joined the fundraising effort, sending Nairobi a Sh22.5bn boost as concessional loan.
The European Union topped this up with an additional Sh7.5bn in form of grants.
In just under 60 days, Kenya had already secured Sh223 billion as part of its Covid-19 war chest.
Treasury Secretary Ukur Yatani was also busy, slashing travel budgets and other wasteful expenditure, in a bid to secure as much money as possible for the fight ahead.
Beginning today, the Nation tells you how the billions of shillings flowed and the firms — at both the national and county levels — that got paid, in a supplies frenzy that has created several Covid-19 dollar millionaires.
As we found out in this investigation, not every Kenyan is cursing the arrival of Covid-19 disease.
For some lucky companies, the pandemic, which has given them a big break, is a blessing in disguise.
Twelve firms, for instance, were awarded contracts worth Sh3 billion by the Kenya Medical Supplies Authority (Kemsa) to deliver items that were not covered by the state agency’s 2019/20 approved budget as at June 4, 2020, with some multimillion-shilling irregular bids going to friends and well-connected individuals.
The scramble for the awards reveals just how getting it right in procurement in Kenya is like a die-hard Jew bowing to the tomb of Adolf Hitler.
The Covid-19 pandemic also gave some government ministries and counties the perfect cover to break procurement laws, and order goods worth billions of shillings in bulk from little known companies and briefcase entities, some of which had no capacity to deliver.
Take the case of Ivy Minyow Onyango, whose story demonstrates how easily Kenya’s procurement system can be bent.
On January 22, Ms Onyango, barely 30 years old, walked into the companies registry. This was weeks before Africa reported its first coronavirus case. She registered Kilig Limited.
Several weeks later, her company was handpicked and handed a Sh4 billion offer to supply hundreds of thousands of Personal Protective Equipment (PPEs). Each kit was to be delivered at an inflated cost of Sh9,000, from the then market price of Sh4,500, according to revelations in Parliament.
The complete kit includes N95 masks, body suits, goggles, waterproof shoe covers and gloves. She was to supply 450,000 of each item.
The fact that her company had no proof or record of ability to supply such a big tender on such a short notice did not bother Kemsa executives, who are now under the radar of the Ethics and Anti-Corruption Commission.
On paper, at the company registry, Ms Onyango is the sole shareholder and director of the company, holding all the 1,000 shares.
All went well until something went wrong between her benefactors and top executives at Kemsa.
The deal would later leak to investigative agencies, but it was too late since the agency had already put pen to paper and the ink had dried.
Kemsa boss Jonah Manjari, would then quickly take a hasty retreat to cancel the deal after it became clear that Kilig had been given more than it could chew.
The Nation Investigations Desk has established that the actual beneficial owner of the company is a vocal Jubilee politician, who has made his billions by securing contracts from government agencies and selling them to companies in exchange for 10 per cent cut.
We cannot name the politician, despite various confirmations by top executives at the drug agency, without running afoul with the defamation law, since his name and signature do not appear on any documentation.
Kilig did not pick our calls or respond to our text messages and emails on its role in the saga. Then there is Shop ‘N’ Buy Limited, another new kid on the block.
The little known company was registered on February 14, 2020 and, like the gifts that people born on Valentine’s Day receive, went ahead to be one of the other big beneficiaries of the flawed procurement system at Kemsa. Despite being just four months old, the company was handed a Sh970 million contract to supply 100,000 PPE kits, each at an approximate price of Sh9,000, earning it revenues of Sh900 million. The company was also allowed to supply another 100,000 pieces of KN95 masks at Sh700 a piece.
A search at the company registry shows that Shop ‘N’ Buy Limited is owned by Mr James Kipketer Chululey.
Mr Kipketer told the Nation that his company had done nothing wrong. It was like a dozen others handpicked by the government and invited to supply the kits.
He explained that the prices were high at the time because he had flown in most of the items, paying excessive cargo fees of about Sh2,000 for every kilogramme of import.
“We quoted the Sh9,000 per kit because we were importing by air and a kilo of any import was going for about 20 dollars in March,” he said.
“Today, it might look inflated, but at that time, that was the price. Kemsa is now at a loss because the prices of some of those kits have dropped since we are now importing by sea.”
He has been reaching out to Kemsa to know the way forward, but officials at the agency are in panic mode after EACC started its investigations.
Shop ‘N’ Buy is today selling KN95 masks at Sh200 a piece, which is less than a third of what it sold to Kemsa.
This means that Kemsa was buying some Covid items for prices that were inflated by up to three times— after going against its own internal procurement advice not to buy en masse at the time.
Since it procures on behalf of public facilities, Kemsa has forced these expensive supplies on county governments and other public hospitals, when they can get the items at half the price on the open market.
Mr Kipketer, like dozens of other companies, has done nothing wrong; they simply saw an opportunity in the market and went for it. And they got lucky.
Only that now, with the audit queries in the air, it may take a little longer for the windfall to hit their bank accounts.
But if the cash taps will ever open, the biggest windfall will go to those who were already in the public procurement system.
For instance, it has been a wonderful three months for events organising company Wanderjoy Party World Limited.
Wanderjoy has been providing catering services to Statehouse and has now extended its clientele base to the Interior ministry, serving tea and snacks to police officers manning roadblocks during Covid-19 curfew and lockdown hours.
It has also been supplying mobile toilets to the police roadblocks.
The company, which is owned by Mr Isaac Maina Wandere Kiboi and his wife and children, made its mark supplying tents to the Jubilee Party during campaigns.
The Covid-19 pandemic has only multiplied his fortunes given that his services have been sought by almost all the critical departments engaged in the fight against coronavirus.
And catering services do not come cheap. In just one month into the crisis, a small team at the Health ministry had consumed tea and snacks worth Sh4 million.
Other firms that have landed multi-million-shilling contracts at Kemsa include Accenture Kenya Limited, whose ownership we could not verify with certainty as we could not find any company registered by that exact name at the company registry.
The mystery firm is among those that were awarded contracts, whose budgets were not covered by the Kemsa budget, putting them at the centre of the ongoing fraud investigations. It was to supply 12,000 PPEs, also at an approximate unit price of Sh9, 000 a piece, in a contract valued at Sh108 million.
Abyssinia Group of Industries (AGI), like others, was awarded a contract to supply 30,000 pieces of N95 face masks at a cost of Sh900 each. This will see the company make Sh27 million.
We could not get name of the firm’s directors since its record does not exist on the online public portal of the registrar of companies.
Bell Industries, which is owned by a Mr Titus Kirea Ibui and Mercy Karambu Ngeera, is also on the list of suppliers, after it got a tender to supply 15,000 PPE kits at a cost of Sh135 million, and 5,000 infrared thermometers at Sh10,000 a piece.
In total the company would supply goods worth Sh185 million.
Medlife Biologicals Limited was handed two tenders worth Sh230 million to supply 200,000 KN95 masks and 20,000 disposable masks.
This means that Kemsa was buying each ear loop disposable mask at Sh90 a piece, which is more than double what it is costing today.
Nanopay Limited also benefited from Kemsa’s flawed procurement process and this has put its top executives in the cross hairs of the EACC. The company, which is owned by a Mr Ahmed Rahim Mohamud Mohammed, got a tender to supply 50,000 pieces of KN95 face masks at Sh35 million.
Then there was Light Up Africa Limited, owned by Ms Emma Wanjiku Maina and Martha Wanjiru Thuku. It got a Sh25-million contract to supply 50,000 pieces of sanitiser in 500ml units.
Ziwala Limited, which is owned by Ms Samantha Ngina Muthama and June Nduta Kinyua, equally received a piece of the Covid-19 billions.
It got a Sh84 million contract to supply 120,000 pieces of KN95 face masks, also at the inflated price of Sh700 a piece.
Also on the list is Wallabis Ventures Limited, owned by Ms Catherine Wanjiku Ndungu and James Njenga Ndungu. The firm got a Sh90-million contract to supply 10,000 PPE kits.