How firm got Sh600m aircraft fuelling equipment tender

THURSDAY MARCH 30 2017

Kenya Airways planes at JKIA in Nairobi. PHOTO | JEFF ANGOTE | NATION MEDIA GROUP 

In Summary

• In 2014, new valves had been installed at the airport costing Sh1.5 million each. 
• In the financial year 2014/2015 the management decided that they had to purchase 60 more hydrant pit valves plus their spares at a sum of Sh600 million.
• KPC says they bought the big number of pit valves to replace 43 non-compliant valves at the airport.

By JOHN KAMAU
More by this Author

Gill House, an office block on Moi Avenue in Nairobi, is not commonly the address for blue-chip companies doing multi-million international deals. Well, it is now.

Inside this five-floor building, where rent for a single room is Sh20,000, was a 20-month old company — Aero Dispenser Valves — that was awarded a Sh600 million tender to supply aircraft refuelling equipment for Nairobi’s Jomo Kenyatta International Airport.

Inside sources told the Nation that the company is owned by a humble welder but who has extensive and sophisticated connections at the Kenya Pipeline Company (KPC) head office.

Now in his early 60s, the welder is well-known inside KenPipe, the KPC headquarters, where he is the trusted proxy of powerful officials in inflated tenders.

He is wealthy and owns houses in Nairobi and Kisumu, sources said, but he at times lives at the KPC Outer Ring Road premises and drives a battered Mercedes Benz or a Nissan Patrol. Even his name is a misnomer.

Thanks to his longevity at KPC, Mr Bagman, who should have retired by now, is still the king of tenderpreneurs at the company.

“He is immensely powerful. Even his boss cannot order him to do anything. The man is well connected,” a source at KPC said.

This is the man who ran the Sh600 million racket in Gill House, now under investigations by the Ethics and Anti-Corruption Commission. 

If the police manage to crack the case, which is highly doubtful, it will blow the lid off a con-game at KPC where insiders hatch schemes to tailor tenders and award them to select briefcase companies. It will also unwrap the manifold conflicts of interest and the clandestine business dealings within the company.

While Mr Bagman hides behind his shabby dressing and age, the face of his two companies — Aero Dispenser Valves and Thermodynamics — is a Mr John Huba Wako, who in the company’s profile is listed as operations manager. His work, as contained in the company’s profile, is to “ensure smooth operation of tendering… keeping track of the stages through which each order is until receipt and payment.”

AVIATION FUEL SUPPLY

If everything had gone to plan, the Sh600 million scandal would never have been known. To kickstart this wanton waste, a “Jig inspection” was conducted at the airport. (A Jig is an acronym for Joint Inspection Group, an internationally recognised forum, where experts drawn from the aviation fuel supply industry come together to establish and improve standards for the safe handling and quality control of aviation fuels).

It was after that inspection that KPC decided to purchase some exaggerated number of hydrant pit valves for the airport plus their spares. 

Hydrant pit valves are used in aircraft fuelling and comprise a series of components for fuelling aircraft with sufficient pressure and flow to deliver piped fuel throughout an airport.

“There is nothing complex about them,” said an engineer at KPC.

In 2014, new valves had been installed at the airport costing Sh1.5 million each. But in the desire to make quick cash, in the financial year 2014/2015 the management decided that they had to purchase 60 more hydrant pit valves plus their spares at a sum of Sh600 million.

This week, KPC chairman John Ngumi, told us that these hydrant pit valves are still in the stores as they are subject of investigations by the Ethics and Anti-Corruption Commission.

The KPC MD, Joe Sang, also sent a statement confirming that these are “subject of investigations”.

KPC says they bought the big number of pit valves to replace 43 non-compliant valves at the airport. The 17 extra valves were spares.

This particular tender was awarded to Aero Dispenser Valve Limited to supply “hydrant replacements” during what was recorded inside the KPC boardroom as meeting No 24 of the tender committee of February 18, 2015.

The award letter was simple: “Following detailed evaluation of tenders, KPC is pleased to advice you that you have been awarded the tender… inclusive of all taxes.” 
The letter of award was sent to the managing director of Aero Dispenser Valves Limited, and signed by then KPC managing director Charles Tanui.

BASED AT GILL HOUSE
In its letterheads, this “international company” did not reveal its offices. It also had a personalised email address —aerodival1979@gmail.com — and had three individuals listed as directors: Jackson Odero, Michael Opundo and Willbard Otieno.

In their tender documents, they said they were based in the nondescript Gill House, but that is not indicated in their letterhead. 

On their website the company, whose motto is “If you can’t do it right then don’t” — lists the shareholders as Mrs Beryl Aluoch (700 shares) and Mr Francis Obure (300 shares). Mrs Aluoch is listed as the managing director and her credentials are a master's degree in strategic planning. 

They said she is “results-driven, self-motivated and resourceful”. Mr Obure is said to hold a diploma in electrical and electronic engineering and his duties are to make sure that “goods delivered meet technical requirements in the tender documents”.

The other is John Huba Wako, the operations manager.

The way this particular tender was rushed, and the way the payments were made is the story of how tenderpreneurs work within the public procurement system at KPC.

Some 26 days after the tender was awarded, the then KPC managing director, Mr Tanui, signed a Local Purchase Order (LPO) with the terms of payment noted as L/C at sight. 

FAST-TRACKED PAYMENTS

That meant that the payments would be fast-tracked as soon as letters of credit and complying documents were released. 

In banking terms, a “sight letter of credit” payment is made to the seller immediately after the required documents have been submitted to the authorised bank, provided the conditions in the letter of credit have been met. It is used as a simplified way to squirrel easy cash from parastatals.

The next day, March 17, a Mr Michael Orido, signing as director of Aero Dispenser Valves, wrote to Mr Tanui acknowledging receipt of the LPO plus the terms and conditions. 

On the same day that Mr Orido’s letter was received, Aero Dispenser Valves raised a Proforma Invoice of $2,563,796 (Sh257 million) and an Order Confirmation was signed by Mr Tanui and Chief Manager Technical, Elias Karumi. 

That Friday, March 20, Mr Orido raised a commercial invoice for the Sh257 million, which he said was the “first milestone” – 40 per cent of Letter of Credit amount $6.410 million. The LPO had no such provision.

Being a relatively young briefcase company, Aero Dispenser Valves did not have capital to finance such a multimillion-shilling tender. Thus, it had to get the money from KPC in the form of a Trust Receipt, also known as TR in banking circles.

IMPORT LOAN

The TR document was signed by both Mr Tanui and Mr Karumi which meant that KPC was giving Aero Dispenser some short-term import loan to enable it to settle payment of goods. 

Although the collaborating bank, Citibank of Upper Hill Road Nairobi, had noted some discrepancies in the documents presented by Aero Valves, it asked KPC to sign the Trust Receipt and return it to the bank (perhaps) if it was satisfied. 

The KPC indeed wrote back saying the “discrepancies on the letter of credit “may be accepted… any discrepancy charge is to the beneficiary’s account,” a memo signed by Nicholas Gitobu dated March 26, 2015 said.

An insider engineer who knows about this procurement told us that “this particular tender was highly inflated… A simple dust cover for the valve was costing Sh10,000.” The records show that KPC paid $112,426 (about Sh11.2 million) for dust covers alone.

Why KPC paid for goods it had not received is a paradox, but documents show that it paid 70 per cent of the value of the tender just for paperwork.

Apparently, these were the simple conditions and milestones for payments that were outlined in the letter of credit and which were given to Citibank to release the money from KPC account to the Aero Valve accounts.

The first 40 per cent of $6.409 million was to be paid “after confirmation of order” and after the bank received “a letter from KPC signed as per mandate and a copy of the invoice showing the amount payable”.
The second payment of 30 per cent (Sh192 million) was to be paid after the company delivered 2 originals and 2 copies of bill of lading and 2 originals and 2 copies of packing list. It was also to show a certificate of conformity issued by Kenya Bureau of Standards plus an invoice showing the amount payable.
With Mr Tanui and Mr Karumi signing the trust receipt – it meant that they had released the money from their Citibank account to National Bank of Kenya’s Times Tower branch where Aero Dispenser Valves had an account.
What this second milestone meant was that KPC paid Sh450 million to Aero Dispensers with no single delivery! The balance was to be paid “upon acceptance of the materials”.

MANAGER TRANSFERED

In the tender documents, Aero Dispenser Valves had purported to be an agent of CLA-VAL, a global manufacturer with headquarters in Costa, Mesa, California, to provide parts to KPC. They claimed to be the sole agents for CLA-VAL in Kenya.

Last week, CLA-VAL told the Daily Nation: “We do not have specific agents in Kenya. We do work in Kenya with non-exclusive multi-partners,” said Fabrice Jaggi, the market sales manager for Europe and who handles the Kenyan business. 

But did the cargo ever arrive at KPC?

KPC chairman, Mr Ngumi, told us that the pit valves and the spares are at their stores and cannot be used since they are subject to police investigations. 

We have established that in June 2015, a container arrived at the KPC depot to offload the order that had been procured in March 2015. There was an anomaly in this delivery.

“There was no way any company could deliver within such a short-time. It usually takes up to six months for the order to be manufactured and materials get shipped,” said an insider wondering whether these were genuine shipments.

When the goods arrived, a store manager refused to receive the container and was transferred to Eldoret.

Bizzarely, the value of the equipment was $64,282, the spares purchased were 10 times the value of the equipment.

“It is like buying a car and spares which are 10 times the value of the car. It doesn’t happen,” the insider said. 

In some of the documents, Aero Dispenser gave its registered offices as LR NO. 209/8595 in Ongata Rongai. That LR No is officially for the plot on which View Park Towers in downtown Nairobi stands. 

Between March 23 and April 2, 2015, Sh235 million was withdrawn over the counter from Account No. 01020014751600 at the National Bank, Wilson Airport branch.
“If the money was to pay the US suppliers, why was it withdrawn over the counter?” asked the source.

Or was it to conveyed to America in gunny bags?

Sh40 billion may have been lost in Pipeline tender

You WEDNESDAY MARCH 29 2017

A man walking along the already set 20-inch 450km Kenya Pipeline Company [KPC} pipes at Kokotoni in this picture taken on July 15, 2015. PHOTO | FILE | NATION MEDIA GROUP 

In Summary

• Kenya Pipeline Corporation has embarked on a project which renders useless equipment on which the public has already spent hundreds of millions of shillings.
• In what whistle blowers describe as a perplexing, kick-back driven decision, the company decided to throw everything away and buy a 20-inch pipeline.
• The 16-inch pipeline was to cost Sh16 billion, the so-called 20-inch Line 5 will cost Sh53 billion.
• The additional 4-inch change has now seen the biggest wastage of public funds recorded by a parastatal – and after the completion of the delayed pipeline some Sh40 billion will have gone to the drain and infrastructure worth hundreds of millions of shilling rendered obsolete.

By JOHN KAMAU
More by this Author

Taxpayers have likely lost Sh40 billion in a project to build a new 450-kilometre fuel pipeline between Mombasa and Nairobi, the Nation can reveal.

In contracting riddled with ruthless, old-school corruption, Kenya Pipeline Corporation (KPC), has embarked on a project which renders useless equipment, some of it new, on which the public has already spent hundreds of millions of shillings.

They are throwing away perfectly good infrastructure and buying capacity the country has no use for because procurement offers an opportunity to eat, according to whistle blowers.

It’s all a matter of inches. Kenya planned to upgrade its pipeline to 16 inches which would give it — and the region — enough capacity for the foreseeable future. So between 2008 and 2013, it bought pumps and other auxiliary equipment for a 16-inch pipeline.

But in what whistle blowers describe as a perplexing, kick-back driven decision, the company decided to throw everything away and buy a 20-inch pipeline.

If the numbers are confirmed, that decision will cost the public a loss that easily dwarf’s Anglo Leasing’s Sh18 billion, and make the Sh1.8 billion stolen from the National Youth Service look like pocket change. 

Related Content

• Kenya to construct its pipeline despite Uganda deal failure

The 16-inch pipeline was to cost Sh16 billion, the so-called 20-inch Line 5 will cost Sh53 billion.

MEGA CORRUPTION

The pipeline case demonstrates how mega-corruption has burrowed into the parastatals and counties, away from the mainline ministries where anti-corruption activities are concentrated.

The pipeline tender for the behind-schedule project was given to the Lebanese firm Zakhem, which has a long and largely opaque history with Kenya’s pipeline and which has been blacklisted in some West Africa nations where it was doing similar projects.

For the last few months, KPC has been running PR social media campaigns about Line 5 under the hashtag #BeyondFuel saying it will create more than 1000 jobs and “transform lives for this and future generations”

Underneath this campaign is the story of a company which wants to cleanse the image of the delayed pipeline and of a company that was historically cash-cow for the politically correct – thanks to the multi-million tenders it awards; and the story of a pipeline that has turned controversial.

On Tuesday, the KPC chairman, Mr John Ngumi, who was appointed in 2015, could not comment on why KPC decided to forgo the 16 inch pipeline.

“I really don’t know. I was not in the board when the decision was made. A board has limited powers and that is a question better answered by the management.”

Reached for comment, the KPC Managing Director Joe Sang asked for more time to answer the questions. “If you can’t wait, then go ahead,” he said.

SIMPLE EXPANSION

When the pipeline project was first mooted, it was known as Line 1 since it was a simple expansion of the current pipeline, while the pumping infrastructure was to remain in place.

Then one day at Morendat — a recreational facility in Naivasha for KPC employees with sauna, swimming pool and conference rooms — a former managing director surprised his technical team with an assertion: “Make it 20 inches!”

The additional 4-inch change has now seen the biggest wastage of public funds recorded by a parastatal – and after the completion of the delayed pipeline some Sh40 billion will have gone to the drain and infrastructure worth hundreds of millions of shilling rendered obsolete.

READ: KPC to complete new pipeline in April

Mr Ngumi told us that a decision has yet to be made on what to do with the old pipeline. “Line 1 can still be converted into an LPG line. But a decision on what we shall do with it has not been made,” he said.

KPC old-hands told the Nation that when the upgrading of Line 1 started in 2008 up to 2013, the idea was to upgrade Line 1 to be a 16 inch and new pumps were installed as part of the strategic plan. 

“By 2010, we had done a lot of upgrades to meet this strategic plan. All this time, we were to build a 16 inch line,” says an insider. “We have (today) gone for a very expensive pipeline that will render the current infrastructure redundant (and) nobody told the MD the consequences of such an ill-informed decision.”

For a company where dismissals, resignations and intimidation of personnel is a norm – some cases are already in court – senior managers did not raise any alarm.

FINANCIAL CRISIS

The replacement of the ageing 38-year-old pipeline was delayed during the former President Moi years as the company went into financial crisis.

But four years after NARC government came to power, KPC was turned around and the upgrading of the infrastructure started in earnest, albeit with a string of scandals.
In order to upgrade to the 16 inch line, KPC bought four new pumps at a cost of Sh4 billion. 

This upgrade turned KPC into a citadel of fraud and kickbacks; a place where the wheeler-dealers, and politically-correct tap into the oil money. 

On their website, KPC have a “Stop Corruption” page where individuals can anonymously report “corruption or fraud related” activities. It says it targets to eliminate “corruption, wastefulness, negligence and inefficiency in order to improve integrity and productivity”. 

Here, one can send an anonymous email address created to “enable staff, stakeholders, suppliers and members of the public report corruption or fraud related activities”.

But corruption at KPC is usually at the top and several key officials have been shown the door as a result – but none has ever been prosecuted successfully.

The first to be nailed was Kanu regime’s KPC managing director Dr Linus Cheruiyot who was charged in 2004 together with former finance manager Ms Hellen Njue and projects manager Mr Paul Gituku with conspiracy to defraud the corporation of Sh339 million. Dr Cheruiyot would later deposit a Sh10 million bond and flee the country to Texas together with his family. 

Hellen Njue featured in the case in which then agriculture minister, William Ruto (now deputy President) had been accused of attempting to defraud KPC of Sh96 million by pretending that he could sell some land in Ngong Forest. Although court documents indicated that Ms Njue paid the money, she was never called as a witness – and Nairobi Magistrate William Mutembei lamented that led to the collapse of the case since “Hellen Njue was the missing link”.

CHARGED WITH FRAUD

Dr Cheruiyot’s successor Ezekiel Komen was also charged with fraud, abuse of office and corruption and was succeeded by Dr Shem Ochuodho who hardly settled before he was kicked out together with board chairman Maurice Dantas. 

They were accused of attempting to defraud the company of Sh827 million but the case was thrown out in May 28, 2014, when High Court judge Weldon Korir cleared Dr Ochuodho and his co-accused and restrained the magistrate’s court from proceeding with the criminal case.

In came George Okungu, who became the KPC managing director in 2005 but was sacked in 2010 and charged together with a former senior manager, Ms Mary Kiptui, for allegedly defrauding the company Sh68 million through illegal sale of KPC houses to employees. The case was terminated by High Court judges Weldon Korir and George Odunga on February 7, 2014, when they restrained the anti-corruption commission from prosecuting the case.

The construction of an oil pipeline by Kenya Pipeline Company near Jomvu in Mombasa. PHOTO |LABAN WALLOGA | NATION MEDIA GROUP

It was that February 2014, when the tender scope for the pipeline was changed from 16 inch to 20 inch. Money was to be borrowed from a consortium of banks and with that, what was to initially cost Sh16 billion went up to Sh53 billion. The loss to KPC, according to insiders, could go as high as Sh48 billion.

“It was pure wastage. By 2010, we had done various upgrades to enable us meet the KPC strategic plan,” said an inside source.

In 2013, some 8 new pumps were installed for Pump Station 4, Pump Station 2, Pump Station 8, Samburu, Talu, Manyani, Makindi and Konza – an upgrade that cost about Sh10 billion for the old pipeline.

“What then remained was the building of a 16 inch pipeline which would have fitted within the upgraded network,” said an engineer who was privy to the discussions.
When the first tender was floated, it was actually for Line 1 replacement. “We had agreed internally that this would meet the needs of the East African region. We had lots of technical documents on the viability of the 16 inch pipeline,” he said.

KILINDA SACKED

The arrival of Jubilee led to various changes within KPC and a new team of wheeler dealers. A new Managing Director, Charles Kiprotich Tanui had been brought on board after he was elevated in January 2014 from the position of Chief Manager, Finance and Strategy. He had also been acting as MD since May 2013 when he replaced Selest Kilinda, who was sacked after an internal audit revealed that he had hired relatives.

Mr Tanui, an appointee of then Energy Cabinet Secretary, Davis Chirchir, came on board when the company had advertised for an “Expression of Interest” for the construction of a pipeline in January 2013. Some 40 companies responded and 13 were shortlisted to participate in the “request for proposal” a few days before Mr Kilinda was shown the door.

During Kilinda’s tenure, an insider told us, most of the sections had substantive managers and the board had minimal role in running the KPC. 

It was this tender which was won by Zakhem who quoted $484.5 million compared to China Wuyii’s $456.8 million. The tender award documents indicate that Zakhem won in the combined technical and financial scores – a rather rigged system of awarding points, according to insiders.

Those familiar with this tender say though the Public Procurement Review Board gave it a greenlight, such a technical tender would have required several days to evaluate and not the single day it took the KPC tender committee.

With the new civil works, new stations, new pumps and instrumentation, it was clear that Zakhem had undervalued its tender in order to clinch the job.

The company is demanding an additional Sh11 billion to complete the job, a variation which it is claimed the board has already granted. 

However, Mr Ngumi said this was not the case.

“We do not discuss tendering at the board since it does not procure,” he said.

In 2014, a year before Mr Ngumi joined the board, KPC changed the original strategic plan to read 20 inch pipeline to justify the spending. 

Interestingly, insiders claim that members of Mr Ngumi’s board have had direct dealings with contractors.

“The directors would go for a site visit which is not properly codified and they do variations on the site. This has brought a lot of problems,” said an insider. “After this a contractor would write a letter to confirm the variation.”

Mr Ngumi denied this and said that in November 2016, the board directed the board technical committee to be taking project visits to check the progress. 

As to whether the taxpayer got value for money will be known in the coming months when the new line is completed.

Mystery of JM Kariuki’s millions

SATURDAY MARCH 25 2017

A portrait of the late JM Kariuki. 40 years ago, on March 2, 1975, the charismatic MP for Nyandarua North was brutally murdered. ILLUSTRATION | J NYAGAH |  NATION MEDIA GROUP

In Summary

• That JM Kariuki was immensely wealthy was known – his only mistake was that he was running with the hares and hunting with the hounds.
• How JM Kariuki had managed to amass so much fortune in less than 10 years was puzzling, nay amazing.
• At a time when an MP’s salary was less than Sh1,000 a month, JM had, by 1966, become a millionaire and was never ashamed to talk about it.
• Kariuki had other properties under his family-owned company Kanyamwi Trading Company Limited which was an acronym for Kariuki, Nyambura and Mwikali, his two wives. 

By JOHN KAMAU

Two events this month went unmarked by the nation. The first was the 42nd anniversary of the death of JM Kariuki, which was on March 2, and the other was his birthday on Tuesday, March 21. Had he not been killed in 1975, he would have turned 88 this year: Five years younger than former President Moi and two years older than Mwai Kibaki. JM is slowly being forgotten.

In some years gone by, that studious silence would always be broken by the university students as they rioted to demand answers on who killed JM, as he was popularly known. Not any more.

Because of the manner in which he died – shot, disfigured and left on the hyena’s path in Ngong Hills – the slain vocal, flamboyant and boisterous Nyandarua North MP entered Kenya’s annals of history as a man who challenged the status quo. To his enemies, JM was a wind-bag and a loud-mouth. To his admirers, he was the hero of the downtrodden.

In 1975, shortly after his death, British journalist and historian Martin Meredith came to Nairobi to cover the funeral for the Sunday Times. In his article, he described JM as “a playboy”, and as not “particularly admirable character”. But he had said that Kariuki was gifted with “an unerring popular touch”.

JM, as he was popularly known, died young. He was only 46. I once asked the late Njenga Karume, the one-time powerful Gikuyu Embu Meru Association (GEMA) chairman, why JM was the target of assassins and his reply was curt: “You don’t speak when you are eating,” said Karume. He had been warned by his close associates to tread carefully – and he said as much as he continued to pester the regime.

That Kariuki was immensely wealthy was known – his only mistake was that he was running with the hares and hunting with the hounds. He was the ultimate king of double-crossers. 

How he had managed to amass so much fortune in less than 10 years was puzzling, nay amazing. But his, like other politicos, was the story of independence heroes who took advantage of the opportunities that emerged for the African elite who tossed themselves into a wealth amassing spree that spared nobody – apart from Bildad Kaggia, who died in penury.

CARRIED MATCH STICKS

Detained in Manyani in 1957, JM was one of the Mau Mau “hard-cores” and was once senselessly beaten by prison warders to confess.

“I was beaten terribly on my ears and I contracted chronic otitis media,” he once said. That is why JM always carried match sticks to clean up his ears. Apparently, he had received some 200 lashes, was put in solitary confinement and was one of those in Manyani Camp No 6 who had refused to incriminate others. “I was always termed a leader of hardcore resistance.”

When the Israelis decided to fund the secret training of former Mau Mau fighters ahead of independence – starting with the military training of General China at Tel Aviv’s Military Officers Training School and at the Kibbutz (collective village) of Kfar Hannassi in northern Israel – the onus of forming the multi-million-shilling Gadna-Nahal type of movement fell on JM, whose book, The Mau Mau Detainee, had been released by Oxford University Press. 

JM was also Kenyatta’s private secretary and Kenyatta had personally recommended him to the new Israeli Prime Minister Levi Eshkol and Foreign minister Gold Meir.

Both were eager to train the thousands of ex-Mau Mau fighters and prepare them for the military and Kariuki would soon become the person to run the show in Nairobi. 

In September 1963, some three months to independence, JM connived with Jesse Gachago (Makuyu MP who was later jailed for stealing coffee) and they introduced a private member’s motion on the establishment of what was known as National Programme for Kenyan Youth. 

LOOKING FOR MONEY

It was the first freelance motion in Parliament and Kenyatta, who was then Prime Minister, did not want to openly display his dalliance with the Jewish state which was behind this motion. It was a chance to adopt Israeli’s Nahal experiment in Kenya. 

When Kenyatta was looking for money to revamp Kanu ahead of the 1963 elections, JM Kariuki and Harun Muturi, his brother-in-law, were some of the emissaries who were sent abroad to go and fundraise. In his book, former Central Bank Governor Duncan Ndegwa reveals that JM was one of the people who “received such cheques.”

Some of the money came from the likes of Gamal Abdel Nasser of Egypt, Josip Broz Tito of Yugoslavia and Haile Selassie of Ethiopia. It will never be known how much money JM collected.

That is how central JM was in the early years of the Kenyatta government.

So central was Kariuki that when close Kenyatta allies went on a land grabbing spree, JM was one of those whose names were sent to the Settlement Fund Trustees (SFT) and he was allocated some 800 acres in Ol Kalou. When he was asked about this land (popularly known as Riverside Farm) in 1966 by then celebrated Nation editor Tony Hall, JM was candid: “You mentioned my 1,000 acres.

Well, people know that I did not have to pay out everything for it. This was paid by the government. I was lucky enough to buy it early on when there was no demand for a 50 per cent deposit,” he said in an interview published in 1966. By that time, he had also acquired the 200 acre Kanyamwi Farm in Gilgil.

Government documents show that JM was one of the first beneficiaries of Settlement Fund Trustees, which had been given money by the British government to settle the landless. 

Despite protests by Neil Brockett, an official of the British High Commission, who voiced concern that some key politicians had acquired huge tracts of land in the settlement schemes, this went on with the tacit approval of the Settlement Fund Trustees who were then Finance minister James Gichuru, Bruce McKenzie (Agriculture) and Jackson Angaine (Settlement). Up to that point, only Kandara MP Bildad Kaggia was on record among the politicians criticising the land grabbing spree via SFT.

GAMBLING CIRCUITS

At a time when an MP’s salary was less than Sh1,000 a month, JM had, by 1966, become a millionaire and was never ashamed to talk about it. He owned several race-horses, was a member of the elite Jockey Club and sat in the boardroom of several blue-chip companies among them East African Breweries.

JM was the first African to own a horse and had become an insider in the gambling circuits, owning shares in the casino and becoming the chairman of the Betting Control and Licensing Board. It was a multi-million-shilling industry.

But when asked in 1966 how he made his money, JM said: “As you know I am not one of the international drinkers … I got a loan to develop my farm and from there I continued making money.” He even protested that people were singling him out as wealthy. He said this was because there were few non-Africans who were as rich as him: “Believe me, there are many, non-Africans who are very rich. 

But because they have been in a wealthy society, nobody bothers to seek them out. Today, if a man like me gets a little bit of money people talk about me, and some other leaders in this country being rich. But we are not – comparing with what other people in this country, European and Asians, are making.”

In the local Jewish circles, JM – thanks to his Israeli connections – became a good friend to some of the best known in town. Among them was Israel Somen, one time Nairobi Mayor and honorary consul, and the Nairobi real estate millionaire Jacob Hirschfeld – son-in-law to Abraham Block.

PRIME LAND

When Hirschfield decided to protect his Joreth Farm from compulsory acquisition from the government, he gave some senior government officials some prime land there. LR No. 4894/188 which comprised a 5.6 acre Castle-Inn Hotel was given to Mr Kariuki while Cabinet ministers among them Paul Ngei was given LR 4894/16, Lawrence Sagini (LR 4894/2), and Dr Julius Gikonyo Kiano’s American wife, Hammond (LR 4894/25) among others. 

Kariuki had other properties under his family-owned company Kanyamwi Trading Company Limited which was an acronym for Kariuki, Nyambura and Mwikali, his two wives. 

In the company, JM held 50 per cent shareholding while his wives Doris Nyambura and Esther Mwikali held 25 per cent each. This was a business enterprise registered in 1966 and owned several liquor outlets in Nyandarua – thanks to JM’s boardroom connections at the East African Breweries. 

He was also a big beer distributor in the Rift Valley via his three companies – Nyandarua Samburu Agencies, Laikipia Distributors and Rift Valley Agencies. He had also had built a commercial building known as Kanyamwi Building in Nyandarua.

Besides his properties in Nairobi, JM had major shares in Kedong Ranch Limited, Motor Mart Group Ltd, Kenya Breweries, CMC Holdings, Pan African Insurance Co Ltd, ICDC, Kulia Investments, Market Ltd, Unga Ltd, Rift Valley Agencies, Standard Chartered and several others.

Rift Valley Agencies was one of the companies that former EABL chairman -turned politician Kenneth Matiba singled out as the enterprise he set up for Vice-President Daniel arap Moi and his brother-in-law Eric Bomett to become beer distributors. 

TOUR COMPANY

Besides the stable of racehorses, it is also known that JM owned a tour company jointly with an Israeli businessman Ernest Kahane and they had a charter aircraft based at the Wilson Airport. But it was in the mining business, together with his brother-in-law Harun Muturi aka meta meta, that JM got more of his wealth. 

Another of his company was Kariuki and Gathecha Company Limited, which he co-owned with a Dominic Gathecha. Both owned a 453 acre farm in Ruaraka which they sold to Nyakinyua and Kang’ei Farmers in 1974, the year before JM died. Gathecha later refused to transfer the land, leading to a protracted case in which the Court of Appeal sided with Kariuki and Company since they argued that the law had not been followed in the sale. 

The Kariuki family would later try to seek justice on Kariuki’s share in this property.

Shortly after his death, besides the tussle within the family over his wealth, his wife Nyambura would later reveal how Kariuki’s lawyer, Lee Muthoga, burnt some files that contained some documents. 

PAYING FEES

“Shortly after JM’s funeral, Muthoga called us together (JM’s wives) and asked me to get a certain blue file which JM had given me a long time ago. I extracted it from the safe where I had kept it Will. I did not suspect anything because Muthoga was like a member of the family whom JM had helped a lot by paying fees for and helping to start his law firm. Instead of reading it to us … Muthoga sat by the fireside and plucked out page by page, reading each of them and then throwing all of them into the fire.” 

Whether these files contained documents that could help trace JM’s properties is not known but Muthoga would later say that they contained damaging income tax records – meaning that JM may not have been filing his tax returns correctly.

As one of the wealthiest Kikuyus of his time, JM used to intimidate the Kiambu mafia. He saw himself as the voice of the downtrodden and started a populist campaign across the country where he donated hundreds of thousands of shillings. 

At a time when Jomo Kenyatta was ailing, JM was seen as one of the most popular outsiders. He had the wealth and, as he looked for power, he stepped on various toes. He was a contradiction and would openly say that “Kenya has become a nation of 10 millionaires and 10 million beggars.” Had he survived, JM would certainly be one of Kenya’s wealthiest men – and is the man Kenya wants to forget.

jkamau@ke.nationmedia.com Twitter: @johnkamau1

What a White Man Told Me in Zimbabwe in 1980

by Thula Bopela

 17 Nov 2016 

I have no idea whether the white man I am writing about is still alive or not. He gave me an understanding of what actually happened to us Africans, and how sinister it was, when we were colonized. His name was Ronald Stanley Peters, Homicide Chief, Matabeleland, in what was at the time Rhodesia. He was the man in charge of the case they had against us, murder. I was one of a group of ANC/ZAPU guerillas that had infiltrated into the Wankie Game Reserve in 1967, and had been in action against elements of the Rhodesian African rifles (RAR), and the Rhodesian Light Infantry (RLI). We were now in the custody of the British South Africa Police (BSAP), the Rhodesian Police. I was the last to be captured in the group that was going to appear at the Salisbury (Harare) High Court on a charge of murder, 4 counts.

'I have completed my investigation of this case, Mr. Bopela, and I will be sending the case to the Attorney-General's Office, Mr. Bosman, who will the take up the prosecution of your case on a date to be decided,' Ron Peters told me. 'I will hang all of you, but I must tell you that you are good fighters but you cannot win.'

'Tell me, Inspector,' I shot back, 'are you not contradicting yourself when you say we are good fighters but will not win? Good fighters always win.'

'Mr. Bopela, even the best fighters on the ground, cannot win if information is sent to their enemy by high-ranking officials of their organizations, even before the fighters begin their operations. Even though we had information that you were on your way, we were not prepared for the fight that you put up,' the Englishman said quietly. 'We give due where it is to be given after having met you in battle. That is why I am saying you are good fighters, but will not win.'

Thirteen years later, in 1980, I went to Police Headquarters in Harare and asked where I could find Detective-Inspector Ronald Stanley Peters, retired maybe. President Robert Mugabe had become Prime Minster and had released all of us….common criminal and freedom-fighter. I was told by the white officer behind the counter that Inspector Peters had retired and now lived in Bulawayo. I asked to speak to him on the telephone. The officer dialed his number and explained why he was calling. I was given the phone, and spoke to the Superintendent, the rank he had retired on. We agreed to meet in two days time at his house at Matshe-amhlophe, a very up-market suburb in Bulawayo. I travelled to Bulawayo by train, and took a taxi from town to his home.

I had last seen him at the Salisbury High Court after we had been sentenced to death by Justice L Lewis in 1967. His hair had greyed but he was still the tall policeman I had last seen in 1967. He smiled quietly at me and introduced me to his family, two grown up chaps and a daughter. Lastly came his wife, Doreen, a regal-looking Englishwoman. 'He is one of the chaps I bagged during my time in the Service. We sent him to the gallows but he is back and wants to see me, Doreen.' He smiled again and ushered me into his study.

He offered me a drink, a scotch whisky I had not asked for, but enjoyed very much I must say. We spent some time on the small talk about the weather and the current news.

'So,' Ron began, 'they did not hang you are after all, old chap! Congratulations, and may you live many more!' We toasted and I sat across him in a comfortable sofa. 'A man does not die before his time, Ron' I replied rather gloomily, 'never mind the power the judge has or what the executioner intends to do to one.'

'I am happy you got a reprieve Thula,', Ron said, 'but what was it based on? I am just curious about what might have prompted His Excellency Clifford Du Pont, to grant you a pardon. You were a bunch of unrepentant terrorists.'

'I do not know Superintendent,' I replied truthfully. 'Like I have said, a man does not die before his time.' He poured me another drink and I became less tense.

'So, Mr. Bopela, what brings such a lucky fellow all the way from happy Harare to a dull place like our Bulawayo down here?'

'Superintendent, you said to me after you had finished your investigations that you were going to hang all of us. You were wrong; we did not all hang. You said also that though we were good fighters we would not win. You were wrong again Superintendent; we have won! We are in power now. I told you that good fighters do win.'

The Superintendent put his drink on the side table and stood up. He walked slowly to the window that overlooked his well-manicured garden and stood there facing me.

'So you think you have won Thula? What have you won, tell me. I need to know.'

'We have won everything Superintendent, in case you have not noticed. Every thing! We will have a black president, prime minister, black cabinet, black members of Parliament, judges, Chiefs of Police and the Army. Every thing Superintendent. I came all the way to come and ask you to apologize to me for telling me that good fighters do not win. You were wrong Superintendent, were you not?'

He went back to his seat and picked up his glass, and emptied it. He poured himself another shot and put it on the side table and was quiet for a while.

'So, you think you have won everything Mr. Bopela, huh? I am sorry to spoil your happiness sir, but you have not won anything. You have political power, yes, but that is all. We control the economy of this country, on whose stability depends everybody's livelihood, including the lives of those who boast that they have political power, you and your victorious friends. Maybe I should tell you something about us white people Mr. Bopela. I think you deserve it too, seeing how you kept this nonsense warm in your head for thirteen hard years in prison. 'When I get out I am going to find Ron Peters and tell him to apologize for saying we wouldn't win,' you promised yourself. Now listen to me carefully my friend, I am going to help you understand us white people a bit better, and the kind of problem you and your friends have to deal with.'

'When we planted our flag in the place where we built the city of Salisbury, in 1877, we planned for this time. We planned for the time when the African would rise up against us, and perhaps defeat us by sheer numbers and insurrection. When that time came, we decided, the African should not be in a position to rule his newly-found country without taking his cue from us. We should continue to rule, even after political power has been snatched from us, Mr. Bopela.'

'How did you plan to do that my dear Superintendent,' I mocked.

'Very simple, Mr. Bopela, very simple,' Peters told me.

'We started by changing the country we took from you to a country that you will find, many centuries later, when you gain political power. It would be totally unlike the country your ancestors lived in; it would be a new country. Let us start with agriculture. We introduced methods of farming that were not known I Africa, where people dug a hole in the ground, covered it up with soil and went to sleep under a tree in the shade. We made agriculture a science. To farm our way, an African needed to understand soil types, the fertilizers that type of soil required, and which crops to plant on what type of soil. We kept this knowledge from the African, how to farm scientifically and on a scale big enough to contribute strongly to the national economy. We did this so that when the African demands and gets his land back, he should not be able to farm it like we do. He would then be obliged to beg us to teach him how. Is that not power, Mr. Bopela?'

'We industrialized the country, factories, mines, together with agricultural output, became the mainstay of the new economy, but controlled and understood only by us. We kept the knowledge of all this from you people, the skills required to run such a country successfully. It is not because Africans are stupid because they do not know what to do with an industrialized country. We just excluded the African from this knowledge and kept him in the dark. This exercise can be compared to that of a man whose house was taken away from him by a stronger person. The stronger person would then change all the locks so that when the real owner returned, he would not know how to enter his own house.'

We then introduced a financial system – money (currency), banks, the stock market and linked it with other stock markets in the world. We are aware that your country may have valuable minerals, which you may be able to extract….but where would you sell them? We would push their value to next-to-nothing in our stock markets. You may have diamonds or oil in your country Mr. Bopela, but we are in possession of the formulas how they may be refined and made into a product ready for sale on the stock markets, which we control. You cannot eat diamonds and drink oil even if you have these valuable commodities. You have to bring them to our stock markets.'

'We control technology and communications. You fellows cannot even fly an aeroplane, let alone make one. This is the knowledge we kept from you, deliberately. Now that you have won, as you claim Mr. Bopela, how do you plan to run all these things you were prevented from learning? You will be His Excellency this, and the Honorable this and wear gold chains on your necks as mayors, but you will have no power. Parliament after all is just a talking house; it does not run the economy; we do. We do not need to be in parliament to rule your Zimbabwe. We have the power of knowledge and vital skills, needed to run the economy and create jobs. Without us, your Zimbabwe will collapse. You see now what I mean when I say you have won nothing? I know what I am talking about. We could even sabotage your economy and you would not know what had happened.'

We were both silent for some time, I trying not to show how devastating this information was to me; Ron Peters maybe gloating. It was so true, yet so painful. In South Africa they had not only kept this information from us, they had also destroyed our education, so that when we won, we would still not have the skills we needed because we had been forbidden to become scientists and engineers. I did not feel any anger towards the man sitting opposite me, sipping a whisky. He was right.

'Even the Africans who had the skills we tried to prevent you from having would be too few to have an impact on our plan. The few who would perhaps have acquired the vital skills would earn very high salaries, and become a black elite grouping, a class apart from fellow suffering Africans,' Ron Peters persisted. 'If you understand this Thula, you will probably succeed in making your fellow blacks understand the difference between 'being in office' and 'being in power'. Your leaders will be in office, but not in power. This means that your parliamentary majority will not enable you to run the country….without us, that is.'

I asked Ron to call a taxi for me; I needed to leave. The taxi arrived, not quickly enough for me, who was aching to depart with my sorrow. Ron then delivered the coup de grace:

'What we are waiting to watch happening, after your attainment of political power, is to see you fighting over it. Africans fight over power, which is why you have seen so many coups d'etat and civil wars in post-independent Africa. We whites consolidate power, which means we share it, to stay strong. We may have different political ideologies and parties, but we do not kill each other over political differences, not since Hitler was defeated in 1945. Joshua Nkomo and Robert Mugabe will not stay friends for long. In your free South Africa, you will do the same. There will be so many African political parties opposing the ANC, parties that are too afraid to come into existence during apartheid, that we whites will not need to join in the fray. Inside whichever ruling party will come power, be it ZANU or the ANC, there will be power struggles even inside the parties themselves. You see Mr. Bopela, after the struggle against the white man, a new struggle will arise among yourselves, the struggle for power. Those who hold power in Africa come within grabbing distance of wealth. That is what the new struggle will be about….the struggle for power. Go well Mr. Bopela; I trust our meeting was a fruitful one, as they say in politics.'

I shook hands with the Superintendent and boarded my taxi. I spent that night in Bulawayo at the YMCA, 9th Avenue. I slept deeply; I was mentally exhausted and spiritually devastated. I only had one consolation, a hope, however remote. I hoped that when the ANC came into power in South Africa, we would not do the things Ron Peters had said we would do. We would learn from the experiences of other African countries, maybe Ghana and Nigeria, and avoid coups d'etat and civil wars.

In 2007 at Polokwane, we had full-blown power struggle between those who supported Thabo Mbeki and Zuma's supporters. Mbeki lost the fight and his admirers broke away to form Cope. The politics of individuals had started in the ANC. The ANC will be going to Maungaung in December to choose new leaders. Again, it is not about which government policy will be best for South Africa; foreign policy, economic, educational, or social policy. It is about Jacob Zuma, Kgalema Motlhante; it is about Fikile Mbalula or Gwede Mantashe. Secret meetings are reported to be happening, to plot the downfall of this politician and the rise of the other one.

Why is it not about which leaders will best implement the Freedom Charter, the pivotal document? Is the contest over who will implement the Charter better? If it was about that, the struggle then would be over who can sort out the poverty, landlessness, unemployment, crime and education for the impoverished black masses. How then do we choose who the best leader would be if we do not even know who will implement which policies, and which policies are better than others? We go to Mangaung to wage a power struggle, period. President Zuma himself has admitted that 'in the broad church the ANC is,' there are those who now seek only power, wealth and success as individuals, not the nation. In Zimbabwe the fight between President Robert Mugabe and Morgan Tsvangirai has paralysed the country. The people of Zimbabwe, a highly-educated nation, are starving and work as garden and kitchen help in South Africa.

What the white man told me in Bulawayo in 1980 is happening right in front of my eyes. We have political power and are fighting over it, instead of consolidating it. We have an economy that is owned and controlled by them, and we are fighting over the crumbs falling from the white man's 'dining table'. The power struggle that raged among ANC leaders in the Western Cape cost the ANC that province, and the opposition is winning other municipalities where the ANC is squabbling instead of delivering. Is it too much to understand that the more we fight among ourselves the weaker we become, and the stronger the opposition becomes?

----------
Thula Bopela writes in his personal capacity, and the story he has told is true; he experienced alone and thus is ultimately responsible for the ideas in the article.

Source - online

All articles and letters published on Bulawayo24 have been independently written by members of Bulawayo24's community. The views of users published on Bulawayo24 are therefore their own and do not necessarily represent the views of Bulawayo24. Bulawayo24 editors also reserve the right to edit or delete any and all comments received.