Revealed: Two MPs, top govt officials behind bad sugar scandal

sugar infographic

According to insiders, two politicians from Central Kenya and two senior government officials are said to have orchestrated the release of the consignment. 

Photo credit: Nation Media Group

What you need to know:

  • Consignment of 20,000 bags of sugar had been held in Mombasa since 2018 awaiting destruction after it was found unfit for human consumption.
  • Insiders say two politicians from Central Kenya and two senior government officials orchestrated the release of the condemned sugar into the market 

The controversy surrounding the release of condemned brown sugar from government custody has sucked in senior government officials and politicians.

In what appears to have been a well-coordinated plan to enrich a few individuals through the 20,000 50kg bags of sugar scam, 27 officials under investigation have been suspended amid claims that the real architect is still free.

According to insiders, two politicians from Central Kenya and two senior government officials are said to have orchestrated the release of the consignment, which had been flagged by the Kenya Bureau of Standards (Kebs) in 2018 for missing expiry dates. 

A confidant of President William Ruto, yesterday said that the Head of State had ordered a thorough investigation and asked the Directorate of Criminal Investigations (DCI) boss Mohammed Amin to hunt down the culprits behind the scandal.

As investigations continued, President Ruto cracked the whip on Wednesday night when he suspended the 27 officers from various institutions, including Kenya Revenue Authority (KRA), Kebs and the police, through a statement issued by the head of Public Service Felix Koskei.

“It has been established that the consignment was irregularly diverted and released without due process. In addition, the conditions for open and competitive tendering of the distiller were violated and the applicable taxes were not paid,” reads part of the statement.

Mr Koskei noted that it is the Cabinet Secretaries for National Treasury, and Investment, Trade and Industry that had taken the administrative action to suspend the officers.

The Nation has established that the plan to secretly release the condemned sugar was initiated in December 2022. According to the chronology of events in the confessional documents seen by the Nation, the suspects claimed they were ordered to release the consignment, which had been earmarked for destruction.

However, an order was given to convert the sugar into industrial ethanol, a process that was to be jointly supervised by Kebs and the National Environment Management Authority (Nema), whose officials have also been suspended.

The suspects claim that the process was hijacked by “powerful” individuals who did not follow procedures, thus exposing the deal. It has also emerged that the matter came to light after some officers in the deal felt they were being shortchanged.

When the sugar arrived in Nairobi, there was a ready buyer and it did not go to any of the four ethanol producing factories in the country—Mumias Sugar, Kibos factory, Agro-chemical and Food Company Limited and London Distillers.

When DCI detectives swung into action last week, arresting seven officers and grilling another, including Kebs managing director Bernard Njiraini who was suspended on Tuesday, and KRA’s Joseph Kaguru, only 14 bags had been recovered from the unsuspecting buyer.

The scheduled court appearance of some of the arrested suspects was postponed on Wednesday today, but there are already allegations of external interference after the DCI forwarded the file to the office of the Director of Public Prosecutions (DPP).

DCI sources have intimated that they have preferred a number of charges against the suspects, including abuse of office, while some may become witnesses. When the Nation contacted Mr Njiraini prior to his suspension, he said: “My response is that this is a matter under investigation by the DCI and that Kebs will never release anything toxic into the market.”

A letter from Mr Njiraini to former KRA Commissioner-General Mburu Githii is said to have triggered the release of the sugar, which has been stored at ICDC in Mombasa since 2018. The process was allegedly overseen by the beneficiary politicians who had a ready buyer.

“KEBS has received a request from Assets and Cargo Limited to convert the said condemned brown sugar into ethanol through distillation,” reads Njiraini’s letter, which was also copied to Trade Cabinet Secretary Moses Kuria and Mr Koskei. He argued that the Standards Act stipulates that non-compliant goods should be returned or destroyed at the owner’s expense, but that he had reviewed the destruction process and approved, in principle, the conversion to ethanol as an environment-friendly destruction.

Mr Githii is reported to have sought the opinion of Attorney-General Justin Muturi on the matter. Mr Muturi urged KRA to ensure that Kebs sought expert advice and recommended that if they were to go down the conversion route, it should be done in accordance with the legal requirements and at the designated companies.

In a letter dated April 25, Vinepack Limited director Peter Mwangi wrote to Mr Njiraini acknowledging receipt of the condemned sugar on April 20. On the same April 20, KRA reported the deactivation of seals and handing over the containers at Vinepark Industries Thika.

“We have facilitated the deactivation of RECTS seals and the breaking of customs seals of the mentioned 40x20 containers found to contain items in bags said to be condemned brown sugar manifested,” reads the report by Carol Nyagechi, Manager of Thika Customs Station.

Surprisingly, just three days later, KRA’s Faith Kiara, on behalf of the commissioner for intelligence, strategic operations, investigations and enforcement, questioned the release of the condemned sugar from Kings Commodity Limited.

According to KRA’s letter to Vinepack dated April 28, the consignment detained at Kings Commodity Limited’s warehouse at a godown in Makongeni, Thika, along the Thika-Garissa Highway was nowhere to be found in response to a demand dated April 22.

“The consignment was detained to pave way for further investigations. Preliminary investigations revealed that the consignment was purchased through a private contract at a value of Sh1,000 per 50kg bag,” the letter reads. “We also note that your company was not the original owner of the consignment and as such the sale value including taxes was payable.”

The KRA also acknowledged a demand letter issued by the Customs and Border Protection Department, but there is no evidence that it has been paid.

The State has established that the sugar in question was imported into the country in 2018 by Merako Investments limited from Harare, Zimbabwe. It was part of a consignment shipped into the country during the duty-free window, and was the subject of an investigation by a joint committee of the National Assembly in 2018.

The report by the Joint Committee on Agriculture and Trade had recommended the destruction of all sugar found to be unfit for human consumption. But the House controversially rejected the report in a chaotic afternoon session marked by widespread allegations of bribery. MPs rejected the report ostensibly on the grounds that the team had ignored its terms of reference and failed to consider witness statements.

At the time, Interior Cabinet Secretary Fred Matiang’i said an analysis of the sugar showed it was unfit for human consumption. The contents of the sugar, doctors said at the time, could cause some types of cancer and damage internal organs.

Yesterday, Mr Kuria questioned why it took more than four years to destroy the bad sugar. He said the government needed to come up with a policy on the handling of condemned consignments to avoid a scenario where rogue officials take advantage of such delays to release goods into the market. 

“For now, we have to give the investigating agencies a chance to complete their probe into the matter. The only fact we know at the moment is that the sugar was condemned,” Mr Kuria said.

At the same time, the National Standards Council yesterday announced changes to Kebs’s top management following the suspension of seven officials on Wednesday.

In changes, the council appointed Director, Standards Development and Trade, Ms Esther Ngari, as the acting MD. Mr Zachariah Lukorito takes over from Ms Ngari in an acting capacity. Mr Bernard Nguyo was named acting Director, Quality Assurance and Inspection, after Mr Geoffrey Muriira was suspended.

The council also named Mr Peter Makan acting Chief Manager Quality Assurance (Nairobi), Mr Mutuma Muthuri acting Manager Inspection (Mombasa Port Office) and Mr Henry Sambul acting Assistant Manager (Kilindini). 

Additional reporting by Paul Mburu