Inside the fake Sh200m prison deal giving Millicent Omanga sleepless nights
Nominated Senator Millicent Omanga.
On the face of it, Milways Enterprises is a beautiful grass-to-grace story that would inspire even the most hopeless of souls into starting a small business and growing it into a massive venture.
A 27-year-old Millicent Omanga registered Milways Enterprises on February 2, 2009, as a business name.
Unlike a limited liability company, a business name is not a separate legal entity but it allows individuals to trade legally.
Ms Omanga has previously stated that Milways Enterprises sells imported furniture and other household goods, and that it was among the vehicles that drove her to financial success.
Ms Omanga, now 40, has found herself in trouble with the anti-graft watchdog, which could prosecute her among other companies and individuals suspected of conspiring to defraud taxpayers of Sh4.8 billion through dubious contracts awarded by the Kenya Prisons Service.
The probe comes as the nominated senator is looking to secure a seat in the next National Assembly when Kenyans take to the ballot on August 9. She is eyeing the Nairobi woman representative seat.
Records at the Business Registration Service indicate that Milways Enterprises operates from Development Towers on Biashara Street.
It had just bagged a contract to supply gun slings to the Kenya Prisons Service in 2019 when the Ethics and Anti-Corruption Commission (EACC) started looking into several tenders floated by government institutions.
The contracts under investigation would have cost taxpayers Sh4.8 billion with no assurance of delivery of weapons and other security equipment.
The EACC’s investigation thwarted the release of any funds.
Strangely, the Kenya Prisons Service had agreed to release 80 per cent of the contract sums to suppliers.
Ms Omanga would have received Sh200 million to supply gun slings. This means that the Prisons department would have paid her a deposit of Sh160 million.
Aside from the irregularity of the huge deposit, Ms Omanga’s contract was somewhat redundant, because guns are fitted with slings during manufacturing.
The investigation is underway and could see several individuals, including Ms Omanga, prosecuted alongside past and present Kenya Prisons Service officials that the EACC believes conspired to defraud taxpayers.
Whistleblowers leaked information to the EACC that the Kenya Prisons Service had signed dubious contracts with several companies that would have set taxpayers back Sh4.8 billion.
Detectives say the contracts were the work of insiders who were working with suppliers to skip legally required processes to have most of the money – Sh3.6 billion – released before any of the security-related equipment had been delivered.
Among the mysteries expected to be resolved by the EACC investigation is how a furniture supplier won a tender to supply sensitive equipment related to national security.
Ordinarily, to bid for a publicly funded tender, companies are required to prove that they have experience in supplying the goods or services sought.
This means Milways should have demonstrated its experience in supplying security equipment such as gun slings.
The EACC is also investigating why Kenya Prisons Service officials agreed to release 80 per cent of the tender sum when many of the contracted parties did not meet crucial requirements like providing bank and performance guarantees.
When the Nation contacted Ms Omanga to find out how she won the contract, the senator claimed that we had dialled the wrong number.
“I am not aware, wrong number,” Ms Omanga said before disconnecting the call.
The phone number that we dialled is listed on records at the Business Registration Service as the contact for Milways Enterprises, alongside Ms Omanga’s email address.
The nature of the business conducted by Milways is listed as “not available”.
EACC detectives yesterday confirmed to the Nation that investigations into the dubious contracts are still going on, and that there is close cooperation between the agency and the Office of the Director of Public Prosecutions. This is intended to tie up any loose ends that could hinder convictions.
While individuals trading using business names are not allowed to bid for publicly funded tenders, exceptions are usually made for supply of goods or services that cost small amounts of money.
The move is aimed at reducing the risk of losing money in the event that the contracted individual is unable to deliver the goods or services.
“It is public practice that small businesses can be allowed to trade using business names but there is a certain threshold,” said Victor Olao, a lawyer with experience in public procurement.
“There is an element of exposure when doing business with individuals. What happens, for example, if you pay the person then they die? With a company, it can outlive its owner.”
Perhaps the most conspicuous irregularity with the tenders floated by the Kenya Prisons Service is that there was no authorisation from the National Security Advisory Committee.
Isaiah Osugo, a former commissioner-general of prisons, told the EACC that he was not aware of plans to purchase the equipment, though his approval was needed. The equipment had also not been budgeted for.
Other companies whose heads are being investigated include Firetruss Systems, which was contracted to supply bulletproof vests and helmets worth Sh2.2 billion, and Mildat Z O.O., which was hired to procure rifles and related equipment worth Sh343 million.
The Pakistan Ordnance Factory would have been paid Sh1 billion to supply rifles and submachine guns.
