Revealed: Inside Raila Odinga's business empire
At the start of April 2022, Kenya was at the peak of a serious fuel shortage that had threatened to hit an already staggering economy below the belt. Thousands of people queued at the few petrol stations selling the precious commodity for hours on end, as the government flung accusations and issued threats at oil dealers it insisted were engineering the shortage to make an extra buck.
Despite outrage and pressure from the public for answers, oil marketers kept mum, with only a few independent dealers complaining about hoarding by multinationals.
With just four months to a General Election that will see Kenyans elect their fifth President alongside hundreds of other representatives, the fuel shortage quickly turned into political fodder for individuals seeking public office.
And on April 6, former Prime Minister Raila Odinga met some oil marketers seeking to find solutions to the fuel crisis. Mr Odinga would in the meeting accuse some marketers of hoarding petroleum products, sparking the shortage that went on for weeks. What many may not have known at the time was that Mr Odinga was wearing two hats – those of a politician and an oil marketer.
Nation Newsplex has established that Mr Odinga and his family own a substantial stake in Be Energy, the local arm of a multinational founded by Saudi Arabian tycoon Sheikh Abdul Kader Al Bakri. Born and raised in Saudi Arabia, Mr Bakri founded Bakri International Energy in 1973.
In the early 1990s, Mr Bakri started an aggressive expansion from Jeddah, Saudi Arabia, to other continents. The expansion strategy saw the tycoon’s business spread its tentacles to Kenya on February 24, 2004 when Bakri Energy Ltd was registered. The firm rebranded to Be Energy Ltd, and is now one of the biggest oil marketing firms in Kenya.
Data from the Energy and Petroleum Regulatory Authority (Epra) shows that Be Energy is the seventh largest oil retailer in Kenya, as it controls 3.1 per cent of the fuel market. Be Energy’s market share grew from 2.4 per cent in 2020. The firm also exports petrol, diesel, kerosene, jet fuel and oil lubricants to South Sudan, Uganda, Burundi, Rwanda and the Democratic Republic of Congo.
Be Energy has storage facilities in Mombasa, Nairobi, Nakuru, Eldoret and Kisumu. It also has staffers at Busia and Malaba border point to aid in clearing petroleum products for exports. Be Energy also has a fuelling facility at Jomo Kenyatta International Airport (JKIA), which allows it to conveniently sell jet fuel to Kenya Airways, KLM, Martin Air, Air France and African Express.
“The company has set up an ultramodern Jet A-1 fuelling facility at [JKIA] to ensure first class experience to our customers. Be Energy Limited is one of the few players in the industry that has presence at the airport,” Be Energy says on its website.
“In partnership with Kuwait International, Be Energy Limited secures the highest standards of safety in its operations at the airport, winning the confidence of major airlines including Kenya Airways, African Express, Marin Air, Air France, KLM, Egypt Air, Air Saudi Airlines, CargoLux among others.”
Records at the Business Registration Service seen by Nation Newsplex indicate that Mr Odinga and his family own 2,801 shares in Be Energy, the equivalent of 35 per cent of the Kenyan-registered company. The Bakri family is, however, the majority shareholder. The Saudi Arabian family owns 5,201 shares through their International Energy World S.A.
International Energy World is registered in Panama, a country commonly used by people looking to lower tax liabilities in their countries of origin. Panama offers very low corporate tax rates and has secrecy policies that allow company owners to stay anonymous while using their firms to conduct business elsewhere.
Companies registered in Panama but which only do business in other countries are not taxed a cent. Banking secrecy laws also bar lenders from revealing the identities of or information about account holders. Thousands of people have registered companies in Panama. It is legal, though it is described as immoral.
Raila Jr stake
The Odinga family owns its stake in Be Energy through another firm – Pan African Petroleum Company. Raila Odinga Jr, the former Prime Minister’s son, is a director of Be Energy alongside Mr Oburu Oginga.
Other directors are Raad Abdul Kader Al Bakri, Gassan Abdul Kader Al Bakri, Mohamed Hani Abdul Kader Al Bakri and Hussain Majed Shamma’a Majed Al Shamma’a.
Pan African Petroleum Company is owned by Mr Odinga Jr (25,000 shares), Rosemary Adhiambo Odinga (50,000 shares), Winnie Irmgard Odinga (25,000 shares), Elija Bonyo Oburu (125,000 shares), Wenwa Akinyi Oranga (25,000 shares) and Kango Enterprises (250,000 shares).
Kango Enterprises is wholly owned by Mr Odinga and his wife, Ida Betty Odinga. They each have 100 shares in the company.
In his LinkedIn profile, Mr Odinga Jr states that he works at Be Energy as a sales assistant. He also lists himself as an owner of Pan African Petroleum Company.
Be Energy is also among at least 90 petroleum dealers that participate in the Open Tender System (OTS), the controversial and secretive public procurement process that ensures sufficient fuel supply in Kenya.
Under the OTS, the Ministry of Petroleum and Mining contracts a number of companies to import all the petroleum products that Kenyans will consume in a particular month.
All other dealers then buy petroleum products from the contracted importers at set prices before selling them to the general public.
The ministry has for years played its cards close to the chest by restricting access to information on the OTS and keeping its winners largely secret. It also makes it nearly impossible to find out how much the tender winners earn from imports and sales of fuel to other dealers.
But past records from Epra indicate that Be Energy bagged a contract to supply petrol, diesel and jet fuel in November 2017.
As Be Energy is a private company, it is not obligated to reveal to the public how much profit it makes each year.
Mr Odinga and his family have a penchant for investing in the energy sector, where they have had interest since September 30, 1971 when East Africa Spectre was incorporated.
During its initial days, the firm was called Standard Processing Equipment Construction and Erection. But it later rebranded to East Africa Spectre Limited.
At the time, Uganda was going through a hostile power transition.
Idi Amin, the cook-turned-military leader, was asserting his authority as president and had ordered everyone of Asian descent expelled from the landlocked country.
Sold his car
Part of the operation involved handing over Asian-owned businesses to Mr Amin’s cronies.
Among the thousands of Asians who left Uganda was an entrepreneur who managed to cross into Kenya with machinery from his plant in Jinja.
In a past social media post, Mr Odinga said he was a lecturer at the University of Nairobi at the time, and was introduced to the businessman.
Mr Odinga said he sold his car, an Opel, to raise money to purchase the equipment and start East Africa Spectre. “The entire machinery was being sold at Sh12,000 which I did not have. My salary was only Sh2,000. So I sold my car to raise the cash and that is how I started,” Mr Odinga said.
The company initially manufactured windows, steel doors and other such items.
When Agip Oil Company suffered a shortage of liquefied petroleum gas cylinders, Mr Odinga took a loan from the Kenya Industrial Estates to expand his company’s operations.
Interestingly, Mr Amin died in Jeddah, the Saudi Arabian resort city where the Bakri family hails from.
The estate of Jaramogi Oginga Odinga is the largest shareholder of East Africa Spectre. The senior Odinga’s estate owns 262,500 shares.
The Odinga family patriarch was also the firm’s managing director at the time of his death in 1994.
Mr Odinga, the former Prime Minister, owns 90,000 shares. His brother Oburu Oginga owns 60,000 shares. Ida Odinga owns 50,000 shares.
Israel Otieno Agina, the man who spent two years in detention for alleged sedition against President Daniel Arap Moi, owns 30,000 shares.
Mr Agina is a close friend of the former Prime Minister. When he sued the government over his unlawful detention between 1986 and 1988, Mr Agina stated that he was working at Agip House when Special Branch police officers arrested him.
After eight years in court, Mr Agina was awarded Sh2 million for unlawful detention after then Attorney-General Amos Wako failed to file a defence in the court case.
Mr Agina would have been awarded more, but Justice David Majanja held that the torture victim did not provide crucial evidence like medical records that would have justified a higher compensation package.
He studied in Germany and Finland, and is also a director at East Africa Spectre.
East Africa Spectre has offices at Agip House, but the court papers do not confirm whether Mr Agina was an employee at the time of his arrest and detention. He is now the Kisumu branch chairman of the Kenya National Chamber of Commerce and Industry.
Mr Agina has walked the business path with the Odinga family, helping them set up their two flagship businesses – East Africa Spectre and Spectre International.
The widow of another Odinga family friend, Joan Argwings Kodhek, owns 5,000 shares in East Africa Spectre.
Her husband, Argwings Kodhek, was the first black lawyer in East Africa. Mr Kodhek was a respected lawyer, but also a revolutionary politician who had caused jitters in President Jomo Kenyatta’s government owing to his fast-growing popularity among the masses.
The lawyer-turned-politician died in Nairobi in 1969, along a road that would later be named after him. While official records state that he succumbed to injuries from a car accident, some reports at the time indicated that Mr Kodhek may have been assassinated.
His widow held shares in East Africa Spectre until 2015 when she died from cancer. Ms Kodhek’s estate inherited the 5,000 shares.
Former National Oil Corporation of Kenya director Ngesa Okolo, also a close friend of Mr Odinga and his family, owned 2,500 shares in East Africa Spectre.
Upon his death in 2009, Mr Okolo’s family inherited the shares.
Today, East Africa Spectre is one of the largest LPG cylinder manufacturers in East and Central Africa. For several years, the company enjoyed a monopoly because it was the only LPG cylinder manufacturer in East Africa.
East Africa Spectre upgraded its manufacturing plant in 2008 as it planned to compete with foreign companies, with LPG dealers starting to import cylinders.
Nearly 18 years after venturing into the LPG cylinder business, Mr Odinga incorporated Spectre International Limited.
Spectre International came to life on January 27, 1989.
At the time, Mr Odinga, who was largely seen as a firebrand by President Moi’s administration, was working to fill the vacuum created by his father’s reduced political activity.
There is little public record on Spectre International before the mid-1990s when the firm placed a Sh570 million bid to buy the assets of the Kenya Chemical and Food Corporation (KCFC).
But its incorporation suggests that Mr Odinga may have formed the company to make a strategic move on the collapsed KCFC.
President Jomo Kenyatta had created the KCFC in 1977 to produce power alcohol.
Power alcohol is an additive that can be blended with petroleum and the end product used to fuel vehicles.
Jomo Kenyatta’s administration intended to use power alcohol as a way of battling rising fuel prices.
But his successor, Moi, scrapped the project. In 1983, KCB Bank placed the parastatal under receivership.
The state-owned firm had collapsed before setting out on its mission to produce ethanol and power alcohol.
On January 27, 1989, Mr Odinga incorporated Spectre International.
KCFC was still under receivership, but Foreign Affairs minister John Robert Ouko was leading a charge to get strategic investors to breathe life into the molasses plant, which he believed had the potential to make huge profits while creating jobs for locals.
Dr Ouko was pushing to have BAK Group, an Italian outfit, come in and invest in the plant.
However, on the night of February 13, 1990, Dr Ouko was abducted from his home in Koru, Kisumu County, by what his domestic manager Selina Were described as a white car.
Two days later a herdboy, Paul Shikuku, found Dr Ouko’s body at the foot of Got Alila hill, barely three kilometres from the minister’s Koru home.
Despite investigations by the government and the UK’s Scotland Yard, Mr Ouko’s killers have never been brought to book.
Dr Ouko’s death led to silence over the fate of KCFC and the molasses plant for five years. Panama Rovers, an auctioneer, advertised the sale of KCFC assets in 1995.
The advertisement was not acted upon. A year earlier in the political arena, Mr Odinga had left Ford-Kenya following a power tussle with Michael Kijana Wamalwa and joined the National Democratic Party (NDP).
In March 1996, Panama Rovers, auctioneers hired by the KCB, appointed a receiver manager, advertised a fresh auction intended for a month later.
The new date yielded results, with the Odinga family’s Spectre International emerging the highest bidder as it placed a Sh570 million offer on the table.
But Panama Rovers dropped a bombshell a few days after confirming Spectre International’s bid as the best – the asset sale did not include the 240 acres hosting the molasses plant.
Spectre International backed out of the deal after failing to resolve the stand-off through negotiations and the courts.
The talks and court action were proceeding as Mr Odinga and his NDP were taking on President Moi. The NDP eventually won 21 parliamentary seats.
In 2000, Mr Odinga and President Moi reached an agreement to work together, a move that brought to life Kenya’s first coalition government.
On June 11, 2001, Mr Odinga was appointed Energy minister in a reshuffle that saw several opposition leaders handed plum State jobs.
Around the same time, KCB’s receiver manager reached an agreement to sell the 240-acre land hosting the molasses plant to Spectre International for Sh3.6 million.
This was Sh400,000 less than the amount the government paid to compulsorily acquire the property in 1976, an anomaly for an asset whose value usually escalates.
Mr Odinga denied that NDP’s merger with Kanu had anything to do with the sudden change of Spectre International’s fortunes.
The sale would later be probed by the Paul Ndung’u-led commission of inquiry into irregular allocation of public land as one of several State assets that were sold for a song after taxpayers’ money had been wasted in white elephant projects like KCFC.
The Odinga family sold 55 per cent of the company to Australia’s Energem Resources, which was to pump in capital and get things going. But Energem went bankrupt in 2011. Despite going under, Energem still owns 2,422,500 shares in Spectre International, per records at the company registry.
The local community owns 237,500 shares through the Kisumu Development Trust Company Limited.
Mr Odinga and his children own 2,094,000 Spectre International shares through another holding company – Lennox Development Limited.
The former Prime Minister owns 2,000 shares in Lennox Development. His children Winnie, Rosemary and Raila Jr each own 1,000 shares in Lennox Development.