EACC Arrests Kaberia: CHAN Tender Fraud Totals Sh330mn

• The Ethics and Anti-Corruption Commission (EACC) has arrested former Sports Principal Secretary Amb. Peter Kirimi Kaberia and five other individuals.
• The arrests are linked to alleged graft involving a Sh330 million advance payment for a 2018 African Nations Championship (CHAN) tender awarded to M/s Auditel Kenya.
• Investigators claim the contract violated the Public Procurement and Asset Disposal Act, 2015, and that the funds were subsequently laundered.
• Suspects face charges including conspiracy to commit an economic crime, unlawful acquisition of public property, abuse of office, and money laundering.
• In addition to criminal prosecution, the EACC has initiated civil proceedings to recover the public funds and assets allegedly acquired through crime.

This case serves as a stark reminder of the EACC's commitment to holding public officers accountable and protecting public resources from abuse for private gain.

The Ethics and Anti-Corruption Commission (EACC) has taken decisive action, arresting former Sports Principal Secretary Amb. Peter Kirimi Kaberia and five other individuals in connection with an alleged Sh330 million fraud related to a tender for the 2018 African Nations Championship (CHAN). These arrests, which occurred on September 8, follow the Director of Public Prosecutions' (DPP) approval of graft charges stemming from an extensive EACC investigation into irregular procurement practices and the subsequent non-delivery of crucial stadium equipment.

At the core of the allegations is a substantial contract, valued at approximately Sh1.5 billion (USD 15.89 million), which was awarded in 2017. The State Department for Sports Development, then operating under the Ministry of Sports, Culture, and the Arts, granted this contract to M/s Auditel Kenya, a local subsidiary of a Spanish firm. The agreement stipulated the provision and installation of comprehensive security and access control systems, advanced audio-visual networks, communications infrastructure, and pitch lighting systems across various national stadia.

Investigators allege that an advance payment totaling approximately Sh330 million (USD 3.15 million) was improperly remitted to M/s Auditel Kenya. This payment was made under a contract that the EACC asserts was executed in direct violation of the Public Procurement and Asset Disposal Act, 2015. The contractor subsequently failed to fulfill its contractual obligations, leading to a direct loss of these public funds. Beyond Mr. Kaberia, those taken into custody include Stephen Njoroge Muthuma, a Senior Principal Finance Officer at the Ministry of Education; John Kiende Ruga, a Senior Superintendent Engineer with Sports Kenya; Samuel Mbaa Njoroge, a Tax Advisor and Partner at Taxwise Africa Consulting LLP; Enock Ondwari Onditi, a former Principal Accountant for the State Department for Sports Development; and Anthony Mwangi Kimathi, a former employee of Instalaciones Inabensa, S.A. Additionally, the EACC has issued directives for four other individuals to present themselves for questioning, including Harun Komen Chebet, former Director of Administration for the State Department for Sports Development; Marcos Gonzalez Puente, Director of Auditel Ingenieria Y Servicios; Kitheka Muema, a former Audit Committee Member for the Football Kenya Federation (FKF); and Ephraim Muchangi Kinyua, an Automobile Business Consultant.

The charges approved by the DPP against the six arrested individuals and the ongoing investigation highlight the serious legal ramifications for those implicated in public procurement fraud. The suspects are expected to face arraignment before the Anti-Corruption Court at Milimani, Nairobi, where they will answer to a range of economic crime charges. These include conspiracy to commit an economic crime, unlawful acquisition of public property, abuse of office, and money laundering public funds Kenya. The alleged Kenya Public Procurement Act 2015 violation forms a central pillar of the prosecution's case, underscoring the legal framework designed to safeguard public resources.

The EACC's proactive stance in this case, particularly regarding the EACC arrests Kaberia CHAN tender, signals its aggressive approach to combating corruption within government tenders. The commission's investigation meticulously traced the Sh330 million in public funds, which were reportedly funneled through multiple entities in a layered scheme. This complex financial maneuvering was allegedly designed to conceal the funds' illicit origin and facilitate their return into local accounts, pointing directly to sophisticated money laundering activities.

This case serves as a stark reminder of the EACC's commitment to holding public officers accountable and protecting public resources from abuse for private gain.

Beyond the immediate criminal proceedings, the EACC has also initiated EACC asset recovery proceedings, aiming to reclaim and forfeit public funds and assets allegedly acquired through the proceeds of crime in this matter. This dual approach—pursuing both criminal prosecution and civil asset recovery—underscores the commission's comprehensive strategy to not only punish offenders but also to restore illegally obtained wealth to the public coffers. The direct loss of Sh330 million in public funds, intended for critical sports infrastructure, represents a significant blow to public trust and national development.

The alleged Auditel Kenya Sh330mn fraud involving Peter Kirimi Kaberia corruption charges and others highlights systemic vulnerabilities in large-scale government contracts. The EACC's focus on this high-profile case, involving a former Principal Secretary and other senior officials, sends a clear message about the increased scrutiny facing public officials and contractors involved in substantial government tenders. It reinforces the imperative for strict adherence to procurement laws and ethical conduct in all public dealings.

This case underscores the EACC's aggressive stance on public procurement fraud and money laundering, signaling increased scrutiny for public officials and contractors involved in large government tenders. Lawyers and compliance officers should review procurement compliance frameworks, especially regarding advance payments and contractor due diligence, and be prepared for potential civil asset recovery actions alongside criminal charges.

Source: Original reporting via news reports