EACC raids homes of Kenya Power bosses in graft probe

Kenya Power offices

Kenya Power offices on Aga Khan Walk in Nairobi. EACC on June 27, 2022 raided the homes of six Kenya Power managers who are under investigation over corruption. 

Photo credit: File | Nation Media Group

The anti-corruption watchdog agency yesterday raided the homes of six Kenya Power top managers who are under investigation over corruption at the utility firm.

The raid saw the Ethics and Anti-Corruption Commission (EACC) officers cart away critical material relating to the ongoing corruption investigation into procurement irregularities, insider trading, unexplained wealth and conflict of interest.

The homes searched belong to Kenya Power general managers John Kibyegon, in charge of supply chain and logistics; Charles Mwaura (network management); and Stephen Kinadira, the acting finance general manager.

Others are senior engineer Stephen Nguli and supply chain managers Jane Muigai and John Wachira.

“Today, EACC accessed and searched residential homes of six KPLC top managers under investigation for alleged grand corruption ranging from procurement irregularities, insider trading, unexplained wealth and conflict of interest. Critical evidence was confiscated,” read part of the communication by the commission.

The latest development is part of a lifestyle audit launched late last year at the troubled utility provider following allegations of fraud by some rogue employees of the firm.

The audit was part of recommendations of a task force appointed by President Uhuru Kenyatta to look into the woes that saw the utility firm post a net loss of Sh2.98 billion in the financial year ended June 2020 — it’s first in 17 years.

The task force recommended that all Kenya Power employees be vetted afresh for integrity, suitability, and qualification for the jobs they held, where EACC was to assist in verifying the wealth held by each of the firm’s more than 10,000 employees, with the audits set to include the main contractors doing business with the power firm.

“Use wealth declarations to verify unexplained wealth and this should be initiated through the Ethics and Anti-Corruption Commission to secure assurance of this value ideal,” read a recommendation from the task force.

The audit was targeted at weeding out employees involved in financial impropriety, an overhaul of the procurement department, replacing the current team with an entirely new one.

EACC began investigations into the board of Kenya Power over alleged interference in the management’s work as well as award of tenders in August last year.

This followed allegations that the board is involved in procurement functions contrary to the provisions of the Public Procurement and Asset Disposal Act, the State Corporation Act Cap 446 and the Mwongozo Code.

Early this month, three independent directors — Elizabeth Rogo, Abdulrazaq Ali and Dr Caroline Kittony-Waiyaki — resigned under unclear circumstances, with insiders pointing to disquiet in the board.

The resignations came just two years after the government overhauled the entire board to streamline operations, enhance efficiency in power distribution and transmission and restore the firm’s profitability following a series of scandals.

The state-backed utility firm has been in the spotlight amid financial haemorrhage largely linked to procurement scandals.

For example, a preliminary audit report showed that Kenya Power held about Sh9.8 billion in dead stock —pointing to the electricity supplier’s messy procurement programmes. The dead stock includes items such as cables, meters, and transformers that have been sitting in the warehouses for more than five years.

Further, the utility firm has also been on the spot over suspect power purchase deals with independent suppliers that have exposed the company to paying burdensome capacity charges to energy producers even when their plants are idle.

This saw the task force, which was chaired by Industrial and Commercial Development Corporation (ICDC) boss John Ngumi, recommend a forensic audit of the power firm’s current procurement systems and stocks to help deal with cartels that have over the years profiteered through fraudulent dealings with rogue employees.

In January this year, a Kiambu court allowed police to detain nine senior employees of Kenya Power for eight days to conclude investigations into their alleged role in the nationwide power blackout of January 11.

Kenya Power has been grappling with operational challenges as a result of persistent negative working capital, increased payment for idle capacity, transmission losses, high indebtedness and incessant boardroom wrangles.

The firm faces high system losses that have increased to 23.95 per cent from 18.68 per cent in the past eight years compared to the allowable system losses of 19.9 per cent.

In 2020, MPs demanded a forensic investigation on how the company bought faulty transformers and prepaid token metres.

Experts said the transformers had failed the company’s own quality tests as they were found to be of poor build, made of poor quality materials, were leaking oil and losing too much power.

In June 2021, the National Assembly’s Public Investment Committee directed Kenya Power to make public the contracts it had with 17 independent power producers at a cost of Sh50.22 billion.

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