Money Inc Undercover On Sunday

#Conflict of Interest: Uhuru Presidency as family business…

The Kenyattas are laughing their heads off at what Kenyans are calling it ‘Railway to Nowhere’

Mother, sing for me: President Uhuru Kenyatta and former First Lady Mama Ngina Kenyatta. Family business interests sweep across real estate, property, ranching, healthcare, large scale agriculture, education, hospitality, dairy, equities, timber, aviation, media, mining and banking.

By GW Ngari


@Undercover KE

It was laughable, really, President Uhuru Kenyatta having beef with public servants engaged in private business. Conflict of interest, he called it, and asked the Attorney General- who is curiously his cousin- to spirit a law against it.  

In reality, Uhuru Kenyatta is Mr Conflict of Interest in flesh and blood: He uses state trips as forays for family business, his mother receives a monthly salary from the government, his siblings and assorted cousins win state tenders. Just consider Nana Gecaga, his niece.

Uhuru appointed Nana, daughter of his half-sister Jeni Kenyatta, CEO of KICC. Nana’s brother, Jomo Gecaga, is the President’s Personal Assistant. But then Nana owns a PR company called Bora Ubora which was paid Sh361 million for supplying campaign T-shirts, caps and related merchandise to President Uhuru’s Jubilee Party during the 2017 elections.

That is not all: President Uhuru has appointed his friends to state bodies, his lawyers do business with government and favourable policies have benefited the family empire-which does roaring business with his government.

Just why since mentioning ‘conflict of interest’ as part of his speech during Jamhuri Day celebrations on December 12, Kenyans have not stopped being mad at a President- who is not only clueless why they have no money-but is apparently blind at how the Kenyatta family and friends have used his presidency to feather their nests through conflict of interest, nepotism and crony capitalism.

Indeed, Uhuru has played Kenyans clean since assuming office in 2013 and as eminent economist David Ndii observed “Uhuru Kenyatta’s presidency has delivered remarkable returns-on-investment for the family enterprise” and whose interests sweep across real estate, property, ranching, healthcare, large scale agriculture, education, hospitality, dairy, equities, timber, aviation, media, mining and banking.

 Let us start now going backwards.

The Guest of Honour during the 56th Jamhuri Day held at Nyayo Stadium in Nairobi was the Prime Minister of Barbados, Mia Amor Mottley. Her invitation is part of Kenya embracing Pan-Africanism as a foreign policy of which Caribbean nations played a key part through leaders like George Padmore of Trinidad and Marcus Garvey of Jamaica.

But what incited curiosity was that Hon Mia Mottley invited Kenyans to invest in financial services in her island nation.

How interesting.

President Uhuru’s family holds a multibillion stake in Commercial Bank of Africa (CBA), which is also in Rwanda and Uganda- where it acquired the subsidiary of Crane Bank, the troubled lender owned by Ugandan tycoon and former billionaire Sudhir Ruparelia.

CBA has since merged with NIC to create NCBA, Kenya’s third largest bank by assets and where his mother, former First Lady Mama Ngina Kenyatta controls Sh15 billion worth of shares after the merger.

In heeding Mia Mottley’s call, a Kenyan delegation of players in financial services will tour Barbados to explore business opportunities there and which include exchange programs in the education sector. You can be sure the Kenyattas, being in financial services and high cost education, will be ably represented “to deepen business ties between Kenya and the Caribbean nation.”

The interest rate capping was scraped shortly after the NCBA merger was completed

Hello, sunshine: President Uhuru and Barbados Prime Minister Mia Mottley at State House Nairobi where she invited Kenyans to invest in financial services in her island nation. The Kenyattas are majority shareholders of Kenya’s third largest bank by assets.

The NIC-CBA merger was to attract a Sh350 million tax to the Kenya Revenue Authority (KAR). But beleaguered and now sacked Treasury Cabinet Secretary Henry Rotich issued a share transfer tax exemption. CBA Chief Executive Jeremy Ngunze explained that the waiver was because the two banks were combining businesses of the same size and that “it would have been different if it was an acquisition.”

While the matter has since gone to court, pundits read a political decision due to the proximity of the majority shareholders to the Presidency; the Ndegwa family at NIC and Naushad Merali and the Kenyattas at CBA.

 Little wonder that the interest rate capping was scraped shortly after the NCBA merger was completed? Just so you know the scrapping increased the value of the Kenyatta shares by over Sh1 billion in two weeks!

During his Madaraka Day speech in Narok County in June 2019, President Uhuru issued a presidential directive that all money owed to government suppliers be paid within a month. At the time, CBA was still in the process of acquiring NIC Bank which had cut a niche in asset financing of which tenders are part, meaning the presidential directive of paying suppliers greatly feathered the cash till at NIC Bank which CBA was acquiring!

There is more than meet the eye in the crackdown against Kericho and Africa Spirits

We haven’t even gone into how if you use M-shwari then your consumer credit data is held by Safaricom and NCBA. This explains why incoming Safaricom CEO Peter Ndegwa was head hunted with the blessing of the Kenyatta family. Have we even mentioned how data obtained through Huduma Namba will be used by NCBA while lending money over mobile applications?

It is telling that Central Bank of Kenya (CBK) is proposing to regulate mobile app lending just when NCBA is about to venture into that space through Wezesha, a platform that will offer credit to micro and small biasharas with the target of five million subscribers already earmarked for year one.

Almost forgot. James Ndegwa holds a billion plus worth of shares in NCBA which is now listed at the Nairobi Securities Exchange (NSE). Companies listed at NSE are regulated by the Capital Markets Authority- on whose board Ndegwa sits!

While the NIC-CBA merger was receiving tax exemption, the Directorate of Criminal Investigations was going after the necks of Tabitha and Joseph Karanja of Keroche Breweries and Humprey Kariuki of Africa Spirits over unpaid taxes running into billions of shillings. They were later released on hefty bonds, but there is more than meet the eye in the crackdown against Kericho and Africa Spirits.

For starters, the Kenyatta family recently acquired a billion shilling plus stake in East African Breweries (EABL) after buying out shares owned by a consortium of Old Money investors.  

Edging out two big competitors creates monopolistic space for EABL where Mama Ngina has a significant individual stake.   

Hasn’t the same thing happened in the milk sector? The Kenyatta family majority owned Brookside Dairies (which does business with the National Government and the Nairobi County Government) controls 45 percent of Kenya’s milk market according to the Kenya Diary Board.

The regulation could have, in effect, ran milk dispensers out of business

My broda: Nigerian President Muhammadu Buhari during his 2016 tour of Broodside Dairies majority owned by Uhuru Kenyatta’s family. Buhari lifted the ban on imported long-life milk and tea leaves to Nigeria after the visit.

Its local market share, greatly aided by policy and regulatory leg room, could have grown tenfold if you consider the Kenyattas bought off Ilara, Delamere, Molo Milk and Kilifi dairy brands meaning their only major competitors are the government owned New KICC and Githunguri Dairies which owned by farmers in Kiambu County.

Founded in 1993, Brookside is Kenya’s largest producer, processor and marketer of milk and dairy products in East and Central Africa.

But since Uhuru became president in 2013, Brookside’s gross margin nosed north from Sh13 billion to Sh22 billion annually. That is an increase of Sh 9 billion achieved on the back of consumer milk prices increasing from Sh36 to Sh60 per half litre as producer prices remains stuck at Sh35.

And the Kenyattas wanted more.

Just last April, the Dairy Board of Kenya (on whose board his brother Muhoho Kenyatta once sat) proposed regulations to outlaw  the selling of raw milk from farmers-to-consumers meaning farmers, were to be forced under the law, to sell to milk processors or other intermediaries like cooperatives or businesses licensed and regulated by the Board. Only a public outcry stopped that in its tracks. The regulation could have, in effect, ran milk dispensers out of business.

 So much for job creation by the Jubilee government.

Brookside offers fresh pasteurized milk, cream, butter, yoghurt, ghee and long-life milk products in Indian Ocean Islands, Egypt, the Middle East and has been making forays to Ethiopia which has 80 million people-almost twice Kenya’s population.

Brookside now has a foothold in West Africa through Nigerian President Muhammadu Buhari.

When he came here on a state visit in January 2016, he paid a courtesy call to Brookside Dairies in Ruiru, Kiambu County. Nigeria has over 190 million people-over four times Kenya’s population.

Nothing is more dangerous than the influence of private interests in public affairs

Room with a view: The Great Rift Valley Lodge is part of Heritage Hotels owned by the Kenyattas. Many government retreats, seminars and conferences are held there.

Nigeria had long banned the importation of long-life milk and tea leaves. But after the state visit, Buhari shortly lifted the ban. “Having been able to considerably satisfy the East African market with our products, we are keen in casting our vision and scope wider by venturing into the West African market,” said Brookside’s Executive chair Muhoho Kenyatta. Cash strapped Kenya Airways increased weekly flights to Nigeria to three.

French philosopher Jean Jacques Rousseau once pointed out “nothing is more dangerous than the influence of private interests in public affairs” and the Uhuru Presidency has hardly been innocent in that regard.

Uhuru’s legacy is hinged on the Big 4 Agenda: housing, healthcare, manufacturing and food security.

It is instructive that the Kenyatta family has invested heavily in just those areas; his sister Nyokabi Muthama and cousin Kathleen Kihanya winning multimillion healthcare tenders at the Ministry of Health through Sundale International-curiously registered in 2013-when Uhuru Kenyatta became president! Nyokabi is also part of Koto Housing which has been winning police housing tenders. It was registered in 2014.

Listen to David Ndii: “Kenyatta’s presidency has increased the profits of his family’s conglomerate by at least Sh 10 billion a year, and that is not including the side lines of family members’ “tenderprises” such as the sister’s health ministry tenders and the uncle’s NYS fuel supplies.”

The NYS scandal was in reference to the late Gatheca Muhoho, Uhuru’s maternal uncle was paid Sh 68 million for supplying diesel. Muhoho, the younger brother of Mama Ngina Kenyatta and father of former Kiambu Women Rep Anne Nyokabi, co-owned PetroKenya Oil Ltd with former Youth Fund chair Gor Semelang’o.

The government is a big time consumer of hospitality through workshops, seminars and conferences. The Kenyatta family owned Great Rift Valley Lodge is has been a beneficiary as are other establishments in the Heritage Hotels and Resorts chain.

The ‘Railway to Nowhere’ slur hit Uhuru to the gut

The Great Rift Valley Lodge is in Naivasha where the Kenyattas have acquired huge tracks of land most of it from buying off the Delamere family. Little wonder the Sh6.9 billion Inland Container Depot is in Naivasha? The Depot will be served by the second phase of the SGR which will move goods from Mombasa to Naivasha. Then there was what Kenyans called ‘Railway to Nowhere”-the Nairobi-Suswa line which Uhuru commissioned in October 2019.

The Kenyattas are laughing their heads off at what Kenyans are calling ‘Railway to Nowhere.’ The Suswa line ends at Duka Moja, a sleepy township haunted by cattle traders along the Mai-Mahiu-Narok road. Duka Moja is 20 kilometres away from the last train station at Suswa. The final destination for ‘Train to Nowhere’ is Naivasha town, 30 kilometres away.

The ‘Railway to Nowhere’ slur hit Uhuru to the gut. He promised that once he was done with what he’s planning, Nairobians will relocate to Suswa in droves to benefit from new industrial parks and housing estates.

Here is the thing, brothers and sisters: The Suswa line ends at Kedong Ranch, a 70, 000 acre affair of which 40 percent stake valued at Sh2.1 billion, way below market value, was recently acquired by you know who.

Uhuru directed Attorney General Paul Kihara Kariuki, his cousin, to fast track the Conflict of Interest Bill in Parliament

Railway to Nowhere: President Uhuru launches the Nairobi-Suswa SGR route in October 2019. Many Kenyans made fun of the railway that terminated in the middle of a cattle market. But kwa ground, things are different, if your family acquired 40 percent of surrounding land.

Didn’t President Uhuru lure the governments of Uganda and South Sudan to build dry ports at Suswa? Just picture the land appreciation and any compensation for railway passing through the land…of which your family controls 40 percent? Compensation will see the National Land Commission play a prominent role. Its chair is Gershom Otachi, one of President Uhuru’s personal lawyers!

This is the kind of conflict of interest the president was alluding to when he took Jamhuri Day celebrations to specifically lampoon Senators Mutula Kilonzo Jr and Kipchumba Murkomen, both among a battery of lawyers for Nairobi Governor Mike Sonko who is facing corruption related cases. Uhuru’s beef was that Senators is that they were engaged in conflict of interest by practicing law while serving in government. To make matters worse, Senators have an oversight role over governors and representing one facing corruption charges kissing the over Sh300 million ceiling amounted to conflict of interest.

But the conflict of interest did not start when he became president

Uhuru even directed Attorney General Paul Kihara Kariuki, his cousin, to fast track the Conflict of Interest Bill in Parliament.

The Kenyattas have greatly benefited from the Uhuru Presidency, providing the family with a strong shield against any risks arising from unfavourable and unpredictable government policies that send fear down the spines of many investors in Africa.

But the conflict of interest did not start when he became president.It stretches back to when Uhuru Kenyatta Minister for Finance in the ‘Nusu Mkate’ government of retired President Mwai Kibaki.

In his 2009 Maiden Budget Speech for instance, Uhuru granted exemption on duty and zero rated VAT for heat insulated heat tankers to preserve milk! He also granted exemption of import duty on all four wheel drive vehicles built for tourism purposes…which is ideal considering Heritage Hotels and Resorts include Mara Explorer, Samburu Intrepid and Mara Intrepid Camps where such vehicles come in handy!

Just before the Kenyattas acquired Mediamax Network Ltd which owns K24 TV, People Daily newspaper and assorted radio stations, Uhuru the Finance Minister exempted duty on cameras and broadcast equipment, a trend that was continued by Henry Rotich who also zero-rated on film equipment imports which saw the cost of cameras, lenses, editing suites plummet alongside all production equipment including lights, boom microphones, dollies and film studio accessories.

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