Sh1 billion suspected garbage fraud at City Hall.
The Financial Reporting Centre (FRC) are on the trail of a fresh web of multibillion procurement fraud at Nairobi County government involving at least eight county staff and shadowy business entities associated with them.
The investigations are centered on garbage collection tenders where street children are listed as the beneficiaries, Covid-19 kits supply as well as road construction contracts with Mr Yunis Ibrahim Khalif at the center of the suspected fraud.
“The large cash declaration forms completed during cash withdrawals indicated the beneficiary of funds to be street boys employed to collect garbage,” reads one of the documents.
The fingered officers face probe into abuse of office, embezzlement and violation of procurement laws in what is suspected to have been aided by a high ranking member of the Nairobi County Assembly serving his third term from Northern Kenya, documents in our possession show.
Mr Khalif is linked to Flexilease Limited which received Sh1.1 billion from City Hall, Capital Waste Management Sh58 million, Sifa Cleaning and Bins Services Limited Sh51 million, Buko Developers Limited Sh4 million, Yassil Developers Limited Sh4 million, Asmara Ventures Limited Sh13.5 million, Saffa Construction Sh10 million and Msafiri Feeds Limited Sh8 million.
Mr Yahya Ibrahim Khalif, Yunis, Mr Hassan Ibrahim Khalif and Mr Yusuf Maina are listed as directors in the companies.
“It is likely eight entities belonging to Yunis Ibrahim Khalif and eight associates engaged in violation of procurement laws at Nairobi County between April, 2017 and October 2020, the entities received payments totaling to Sh1.3 billion from Nairobi county government for garbage collection and supply of Covid-19 personal protection kits which was not in line with their business profile. There is no evidence the entities paid taxes for the payments received,” reads the document generated by the two bodies.
Mr Khalif and his business associates are suspected of using 10 entities related to them to receive millions of shillings from the Nairobi County government and the Nairobi City County Alcoholics Drinks Control and Licensing Fund (NCCADCLF) for garbage collection services and supply of Covid-10 personal protection kits.
According to FRC, between April 2017 and October 2020, accounts related to Mr Khalif and his proxies cumulatively received Sh1.284 billion from City Hall out of these, Sh1.24 billion directly benefited Mr Khalif, either through payments to his own entity accounts or transfers making him the beneficial owner.
The funds were thereafter utilized through cash withdrawals, transfers to entities related to Mr Khalif and other third party entities.
“Suspicion of procurement fraud is based on the fact that three of the entities linked to Mr Khalif received contracts for garbage collection in Nairobi County while five entities linked to him received road construction tenders as well as contracts to supply Covid-19,” the documents note.
Flexilease incorporated as a company on June 4, 2013 received in excess of Sh982 million between January, 2019 and October, 2020 in its DTB Account from Nairobi County government as payments for garbage collection contract for the 2018/2019 financial year.
The funds were then utilized through internal bank transfers totaling to Sh713 million to the accounts of Abass, Yusuf and joint account for Yunis and Amina Ali Bulhan. Cash withdrawals totaled Sh132.5 million while cheques to Ibrahim Khalif amounted to Sh26.4 million.
On the other hand, the firm’s Coop Bank Account received Sh122 million between February and May, 2018 where a cash withdrawals totaling Sh119.6 million and transfers totaling Sh6.5 million to Hass Petroleum account at Standard Chartered Bank.
Capital Waste Management incorporated on May 15, 2015 with waste management the declared business received transfers totaling to Sh58.7 million from Nairobi County between March and June, 2020.
The fund would then be wired to Yusuf as Sh35.7 million in cash withdrawal, Sh8 million as internal transfer and cheque payments of Sh20.2 million.
Sifa Cleaning and Bins Services Limited incorporated the same day as Capital Waste Management, with declared business being cleaning services, between April 2017 and July 2018 received transfers totaling to Sh51.3 million from Nairobi County government for garbage collection services.
The cash were utilized through cash withdrawals of Sh35.7 million to Yusuf, internal transfer of Sh8 million and Sh20 million cheque payments to Yusuf.
Buka Developers, registered in 2012 with interest in real estate received Sh4 million from NCCADCLF on July 21, 2020 for supply of 2,942 packets of medium examination latex gloves at Sh1,360 per packet. The funds were utilized through internal funds transfer of Sh4 million to related company YH wholesalers limited on July 29, 2020.
Yassil on the other hand received Sh4 million from NCCADCLF on July 21, 2020 for supply of 267 infrared thermometers at Sh15, 000 each.
From the payment, Sh2.1 million went to YH wholesalers, Sh800, 000 to Asmara Ventures and Sh900, 000 to an influential Nairobi MCA who holds a key house leadership position.
Asmara Ventures, registered in 2017, received Sh13.5 million from NCCADCLF on July 22, 2020 for supply of 2,446 packets of three layer disposable face masks at Sh5, 500 per packet.
Saffa Construction, registered in June 2019, received Sh10 million from NCCADCLF on July 23, 2020 for supply of 8,000 bottles of alcoholic hand sanitizer at Sh1,250 per 500ml bottle. Sh9 million went to YH wholesalers owned by Yunis.
Msafiri Feeds registered in 2019 with supply of food stuff as declared business, received Sh8 million from NCCADCLF on July 22, 2020 for supplying 320 bags of chlorine at Sh25, 000 per bag. Sh3 million went to YH wholesalers, Sh889, 000 to Yahya and cash withdrawal of Sh2.95 million.
However, the money trail did not end there as the Liquor board on July 20, 2020 instructed the Cooperative Bank to enhance the internet banking transaction limit from Sh5 million to Sh30 million, an instruction signed by Mr Julius Matekwa, board accountant; Mr Mohamed Sahal, board secretary and Hesbon Agwena, a board director.
The following day, Sh69 million would then be transferred to Buko, Yassil, Asmara, Saffa, Msafiri, Touch Down Tours and Kemanan Enterprises with payment to Touch Down registered as for travel package to Dubai from August 17 and 24, 2020 for the board members on a bench marking tour of rehabilitation centers.
They included Allan Igambi, Finance CEC, Jairus Musumba, board members, Michael Wathigo and Mwaka Mwola.
“The funds were utilised in structured cash withdrawals totaling Sh3.9 million and a transfer of Sh250, 000 narrated as college fees payment. There was no evidence of payment to an airline to facilitate the travel to Dubai. Notably, none of the board members travelled outside the country as indicated in the supporting documents for the payment to Touch Down Tours Limited,” said FRC.
The FRC now wants the National Intelligence Service (NIS) to also carry out investigations to establish whether the eight county staff and 10 contracted entities were involved in violation of procurement laws at Nairobi County government.
The officers could face charges relating to award of tenders for a common service to entities owned by the same beneficiary, single sourcing of emergency supplies from common supplier without prior experience, payments for taxable goods and services without provision for tax, among other charges.
Sh1 billion suspected garbage fraud at City Hall.