John Ngumi: I got paid Sh415m for Telkom sale because I was the best
Eagle Africa Capital Partners executive director John Ngumi before the joint sitting of the National Assembly committees investigating the acquisition of Telkom Kenya at County Hall in Nairobi on April 19, 2023.
Former President Uhuru Kenyatta’s ally John Ngumi was yesterday at pains to justify the $3.07 million he was paid by Jamhuri Holdings Limited (JHL) for his role in advising on the government’s acquisition of Telkom Kenya Limited for Sh6.2 billion.
The amount that Mr Ngumi received over a period of five months — between April 1, 2022, when the government began the acquisition of Telkom Kenya Limited, and September 2022, when the deal was concluded — is equivalent to about Sh415 million. This is based on an exchange rate of 135.20 shillings to one US dollar.
This made Mr Ngumi, 68, the single highest beneficiary in the transaction — more than the $1 million that JHL received, Anjarwalla and Company Advocates (Sh54 million), and $1 million for Investment Bank and employees of the telco.
While appearing before the joint sitting of the Finance and National Planning and the Communication, Innovation and Information committees of the National Assembly investigating the acquisition of Telkom Kenya, the owner of Eagle Africa Capital Partners Ltd told the MPs he deserved to be paid $10 million.
However, Molo MP Kimani Kuria, who chairs the Finance and National Planning Committee, said he could not find a plausible explanation to justify the amount Mr Ngumi received.
“So, what kind of skills did you bring to this transaction that made you get paid this amount of money in five months? I am really struggling to understand,” said Mr Kuria, noting that Mr Ngumi only appeared in the picture after Helios Investors Chief Finance Officer Paul Cunningham revealed to the joint committee the amount the Eagle Africa Capital Partners owner was paid.
“In this transaction, Mr Ngumi had not appeared anywhere, whether by virtue of the advice he gave ... until Mr Cunningham made the revelations,” said Mr Kuria.
His Kitui Rural colleague David Mboni was equally baffled. “You work for five months and get paid this kind of money? I am just wondering whether some of us are in the right career,” he said.
High-level advice
Mr Ngumi had told the joint hearing by the two committees of the House that JHL needed high-level advice to invest because it could not afford to make mistakes.
“I was paid the money because I was the best in the business. They valued the advice I gave them and it was a willing buyer willing seller (transaction),” he said.
He told the committees that he would pay Kenya Revenue Authority (KRA) “brought forward tax” for income that is due because it was not anticipated in the year it was made — at the rate of 30 per cent.
“It is a painful amount but I am going to obey the law,” said Mr Ngumi, even as MPs wondered whether his desire to pay the taxes was an afterthought.
He told the MPs that he has interests in investment banking and commercial banking and that he has been a banker since 1980 as well as the chairman of Kenya Pipeline Company, Industrial and Commercial Development Corporation (ICDC) and Safaricom.
“Helios believes that I am worth the amount that I was paid and I am proud to say I convinced them to sell their 60 per cent shareholding in Telkom Kenya to the government at $1 million,” Mr Ngumi said.
The government paid Sh6.2 billion without the approval of the National Assembly, to Helios Investors LLP through JHL, its Special Purpose Vehicle (SPV), in August last year.
The payment was made to the JHL bank accounts in Mauritius before hitting Mr Ngumi’s offshore accounts, meaning that the money did not reach Kenya.
It was to be regularised through Supplementary Budget I for the 2022/23 financial year.
However, the payment was flagged by the two committees as they considered the supplementary budget and their recommendations were upheld by the National Assembly, which by a resolution, directed the two committees to investigate the matter.
