Wednesday, July 24, 2024

Revealed: How banks moved Sh6.3b NYS cash

National Assembly Public Accounts Committee when businesswoman Josephine Kabura appeared on NYS tenders at Parliament. Investigators into the National Youth Service (NYS) scandal have now trained their sights on transactions worth Sh6.3 billion made through 28 financial institutions. (PHOTO: BONIFACE OKENDO/ STANDARD)

Investigators into the National Youth Service (NYS) scandal have now trained their sights on transactions worth Sh6.3 billion made through 28 financial institutions as they seek to unmask the faces behind 40 companies paid from the State agency’s funds.

Documents provided to the National Assembly’s Public Accounts Committee, which has been probing the matter, and subsequently availed to the Director of Criminal Investigations and the Ethics and Anti-Corruption Commission (EACC), has raised to Sh6,323,743,655 funds which were transacted through the 28 commercial banks.

The colossal figure derived from a document provided to the committee by the Ministry of Public Service and Youth Affairs as being payments made from the NYS since the 2013/14 financial year, makes a mockery of the Sh791 million that was initially targeted for investigations when the matter was raised by the Auditor General.

The investigation into the transactions made through these commercial banks is expected to unearth the faces and true beneficiaries of the payments made, as the documents provided by the ministry do not disclose the directors of about 40 companies.

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Director of Public Prosecution (DPP) Keriako Tobiko has already directed the Director of Criminal Investigations Ndegwa Muhoro to open investigations on 28 financial institutions disclosed to have made NYS-related transactions.

Probe launched

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In a letter dated November 21, a copy of which was obtained by The Standard on Sunday, Tobiko directed Muhoro to immediately dispatch officers of the Banking Fraud and Investigations Unit (BFIU) to probe the institutions and forward the files to him within 21 days.

“In the event that no such investigations have been or are being undertaken, I direct that you cause such investigations to be undertaken and resultant investigation files be forwarded to me within 21 days,” says the DPP.

Apart from Family Bank that has been accused of abetting the crimes, the document provided to the committee of Parliament reveals transactions were also made through other banks. The DPP — through the same letter — directed that managers involved be prosecuted.

Family Bank leads with a transaction figure of Sh1,518,396,795 followed by Equity Bank where transactions of Sh1,173,390,407 were made from NYS coffers between financial years 2013/2014 to 2015/16.

Other financial institutions with bulk transactions include Kenya Commercial Bank where Sh416.3 million was paid through, African Banking (Sh546 million), Barclays Bank (Sh445.8 million), Jamii Bora (Sh342.4 millions), Co-operative Bank (Sh302.3 million), NIC Bank (Sh323.4 million) and Bank of Africa Kenya (Sh166.8 million).

Others are Consolidated Bank where transactions worth Sh163 million were made within the period, Chase Bank (Sh152.4million), I&M bank Sh88.9 million, Guarantee Trust (Sh86million), Standard Chartered (Sh73.8 million), Sidian Bank (Sh59 million) Paramount Investment Bank (Sh47.8 million) and Giro Commercial Bank through where Sh42.4 million was paid.

It is these transactions that the Nicholas Gumbo-led PAC want investigated to establish if the financial institutions could have abetted in the scandal.

“The committee confirmed that the evidence before it indicates that most of the payments received by the named banks originated from the account of Ministry of Devolution held at the Central Bank of Kenya (CBK) and they wanted to know if there was the culpability or complicity on the part CBK in aiding or abetting the scandal,” Tobiko says in his letter.

Gumbo had indicated that only investigations into the roles of each of the institutions could help unearth whether any of them was involved in financial crimes.

“At the moment, while no obvious impropriety is implied on the part of these banks, the same cannot be discounted until proper investigations are done to ascertain what companies that received millions through these banks did for the people of Kenya and if value for money was realised,” Gumbo said.

Among the faces the probe is expected to unmask is, for example, the unnamed individual, who according to the documents provided to the committee, was paid Sh45,137,931 on September 11, 2015 through Paramount Universal Bank, Koinange Street Branch, where the “nature of supply” is indicated as cut away model piston pump and where only the name of the firm, Blue Star Enterprises is given.

Interestingly, the undisclosed person appears to have been paid a similar amount for the same supply on a transaction dated September 22.

Similar entries where the persons paid are not disclosed are made in the 18 page document. The document shows the name of the company, IFMIS number through which transaction was made, the bank and branch paid through, account number, amount paid, and the nature of supply, transaction dates and the contact persons.

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