Ministry of Finance Press Release: Response to Allegations of Impending Payment of Promissory Notes

1. Our attention has been drawn to articles appearing in the media alleging that the Government plans to honour two promissory notes worth Ksh 270 million in favour of Midland Finance and Securities Ltd. We wish to take this early opportunity to put the record straight and reassure Kenyans that the Government commitment not to honour any of the controversial angloleasing-related promissory notes, remains unwavered.

2. The reports that are attributed to MARS GROUP have no factual basis and are only meant to mislead the public for reasons best known to the organization. It should be underscored that this is not new information. Indeed, the same reports have repeatedly been appearing in the press over the last two years.

3. The truth of the matter is that no expenditure to Midland Finance and Securities Ltd has been appropriated and approved by Parliament in the budget of fiscal year 2008/09. This can be verified from the Estimates of Recurrent Expenditures for Fiscal Year 2008/09, which, for the information of those that may be interested, can be obtained from the Government Printer.

4. Kenyans will recall that in December 2007, the Minister for Finance issued a Caveat Emptor that was circulated both locally and globally to all financial and non-financial institutions, warning all parties that the Promissory Notes issued for the Anglo-Leasing contracts are fraudulent and that the Kenya Government would not honour any of them. The same Caveat Emptor was also advertised in the print media for wider reach. Indeed, there are other Promissory Notes which have matured since the Caveat Emptor was issued, but the Government has remained steadfast in its pledge not to honour them.

5. The motive of MARS GROUP and other similar civil society organizations that have been campaigning1 that the Promissory Notes are irrevocable and that the Government cannot avoid paying them is suspect, given the fact that the underlying contracts are fraudulent. Patriotic Kenyans should pose the question: "On whose side is the MARS GROUP and whose interest are they championing - for the Kenyan people or the holders of the Promissory Notes? Is this their way of safeguarding public funds and fighting corruption?"

6. We wish to reiterate that the Government takes great exception to some sections of the civil society and the media, whose focus is falsehoods and misinformation in the pretext that they are exposing corruption. This negative focus should stop.

7. Finally, we want to reassure the public of our resolve to win the war against corruption. In this context, Treasury, under the leadership of the Deputy Prime Minister and Minister for Finance, and working together with the other arms of the Government, is determined to resolve this matter for good.

In this regard, measures are being taken by all relevant government agencies to formulate a co-ordinated strategy in order to ensure the Government obtains the best outcome in the on-going arbitrations, legal suits and any negotiations that may be undertaken.

We commit to keep briefing the public regularly of the progress on this matter.

PERMANENT SECRETARY/TREASURY February 26, 2009



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One Response to Ministry of Finance Press Release: Response to Allegations of Impending Payment of Promissory Notes

Mars Group said...

Finance Minister, Uhuru Kenyatta has a duty to stop the payments that he exposed as fraudulent: It is time to admit failure of the fiduciary duty by the Permanent Secretary, Ministry of Finance, Joseph Kinyua, who is the Accounting Officer and custodian of Kenyan tax payer’s money.
Read Full Post at: http://blog.marsgroupkenya.org/?p=610