As South Sudan was going through a self-governance transition period between 2005 and 2008 in preparation for independence, its people led by Salva Kiir saw the need for a military complex in or near Juba and looked to a firm associated with former Kenyan minister Cyrus Jirongo.
Yusung Construction Limited bagged a deal to put up the John Garang Military Academy, named after one of the nation’s renowned freedom fighters, and the Natinga Warehouses in 2008.
Records from the Registrar of Companies attached in court papers show that Yusung is owned by Haron Omeke Mokomba and Judith Khalamwa Shakhalanga.
Ms Shakhalanga is Mr Jirongo’s wife, and the South Sudan government holds that she is a proxy the politician is using to get the funds. The firm somehow bagged the deal despite not having any substantial projects to its name, and without being listed as a contractor by Kenya’s National Construction Authority.
Yusung was to get $73.3 million (Sh8 billion) to construct the two installations and pocket whatever balance as profit. At the time, South Sudan was still largely under the Republic of Sudan.
Following a peace deal between Khartoum and Juba in 2005, South Sudan was allowed to form a transition government, which would prepare for a referendum. The referendum eventually led to 98 per cent of South Sudan citizens calling for independence, which was granted.
In 2008, when Mr Kiir was President of the transitional government of South Sudan, his administration agreed to pay Yusung a $24 million (Sh2.6 billion) advance to ensure that work gets underway. Yusung then laid the complex’s foundation.
Demand for payment
No more work was done, and everything went silent until two years ago when Yusung Construction approached the East African Court of Justice demanding payment of $49.3 million (Sh5.4 billion) as due sums with interest.
The construction firm claimed that it was forced to move construction to different sites four times following protests and the selection of areas prone to flooding.
Yusung claimed that it exhausted the downpayment while moving construction sites and that the South Sudan government turned hostile in 2011 and kicked it out.
Nothing happened with the suit filed by the Jirongo-associated firm until November 26, 2020, when an out-of-court deal was signed to have Yusung paid the demanded balance.
Biong Pieng Kuol Arop, an official of South Sudan’s Finance and Planning ministry, committed to having Yusung paid the claimed Sh5.4 billion. South Sudan was to pay an initial $10.9 million (Sh1.1 billion) and then remit three equal instalments of $12.8 million (Sh1.4 billion).
Under the deal, any default was to give Yusung permission to attach South Sudan’s assets to recover the sums.
And it is that deal that has now seen South Sudan’s bank accounts held by Kenyan lenders frozen, as the Juba administration now claims that Mr Arop did not have the authority to negotiate or strike such deals on its behalf. Court proceedings indicate that Mr Arop had appeared before the East African Court of Justice on August 31 and asked for time to negotiate the settlement with Yusung.
On December 30, 2020, Yusung had not been paid the initial amount in the out-of-court settlement, and it filed an application in the Kenya High Court in Nairobi. The Kenyan courts issued an order freezing accounts held by South Sudan at NCBA and Stanbic.
Yusung also argued that South Sudan had received a Sh26 billion payment from the Exim of the United States, Egypt branch and that there was a risk of the monies being withdrawn before payment of the construction company’s dues.
South Sudan now says Yusung obtained the out-of-court settlement through fraud and then used it to trick the Milimani High Court into freezing the accounts.
Garang Majak Bol, another South Sudan Finance ministry official, says he is the first point of call whenever the government wants to commit itself to such payments.
The official says he was never consulted for the payment committal. Mr Bol adds that to date South Sudan has never been served with a copy of the court order that froze its accounts despite having an operational consulate in Kenya.
He adds that Mr Arop has admitted to not having any authority to enter into the settlement with Yusung on behalf of the Juba administration.
The bureaucrat adds that documents relating to the contract with Yusung got lost in the course of the civil war that has ravaged South Sudan since 2013 and that the construction firm is exploiting the situation to siphon funds meant for running the country.
South Sudan is of the view that the freeze orders are a declaration of war by Kenya, as it is now unable to deliver any services to its largely poor population.
“The seizure of bank accounts of the government of the Republic of South Sudan is tantamount to Kenya declaring war on South Sudan’s government, which is tantamount to international conventions.
“It is morally wrong for a court of the jurisdiction of the East African Community, a partner state, to oversee and paralyse the operations of another member state.”
“Indeed Mr Biong Pieng has accepted that the consent judgment recorded before the East African Court of Justice on November 26, 2020 was recorded without any authority. If the payment were to be sustainable then the project would have cost the government of South Sudan a whooping $73 million (Sh7.3 billion) which would be completely immoral considering that no work has been done on site as can be seen from the above photographs,” Mr Bol says in court papers.
South Sudan now wants the High Court to allow it retain Macharia-Mwangi & Njeru Advocates to replace Mr Arop, and to lift the freeze orders.
The suit is the second major claim against the South Sudan government being fought in Kenya.