NSSF Board of Trustees

CLARIFICATION BY NSSF ON MEDIA STORIES

HCCC NO.701 OF 2005 (O.S) MILIMANI

ARBITRATION BETWEEN PANAFRICA BUILDERS & CONTRACTORS LTD (PABCO) AND BOARD OF TRUSTEES NATIONAL SOCIAL SECURITY FUND

BACKGROUND

Pan Africa Builders & Contactors Ltd herein referred to as PABCO entered into a building contract with the Fund to construct houses, apartments and shopping Centre on the Fund’s property Block No. 101 Kitisuru Estate at the value of Kshs.1,949,729,740/=. The contractual completion date scheduled as 11 May, 2000. The Fund hired Project Architects and Quantity Surveyors to act as consultants of the project.

Around 1999, the project was restructured and the scope of works scaled down to the value of Kshs.822,469,991/=. As a result of El nino rains and financial difficulties on the part of the Fund as well as other factors, the certificate of practical completion was issued on 23 August 2003 and official hand over of the site was done around February 2007.

After practical completion, PABCO rendered their final accounts to the Fund’s Consultants, but the accounts were never settled.

PABCO sued the Fund for a total of Kshs.1,333,545,013/=.

After the hearing by the Joint Arbitrators the award was made on 22 July 2010 and summarized as follows:-

On 31 August, 2010 Hon Lady Justice Koome confirmed the award and issued decree for Kshs.667,993,986.96 plus costs and interest. The said amount of Kshs.667,993,986.96 was to continue accruing interest at 14% per annum until payment in full.

Sometimes on 3 October 2010 PABCO obtained Court Warrant to attach movable property of the Fund in execution of the award . On 5 October 2010 Garam Investments Auctioneers proclaimed property belonging to the Fund by way of inventory. The Fund obtained a stay of execution and also applied to have the award set aside by the High Court.

On 27 January, 2011, Hon Justice Muga Apondi rejected the Fund’s application and confirmed the award given by the arbitrators.

Further to the award and the amount indicated above, the Fund received a Garnishee Order absolute issued by Hon. Lady Justice Martha Koome dated 6 September 2010 ordering the Fund to pay Kshs.170,000,000.00 Speedwings Mercantile Co. Ltd, a subcontractor of Pan Africa Builders and Contractors Limited . The said amount was to be paid on behalf of the contractor and it was to be deducted from the award.

At the time, the Fund had also received decree nisi orders in favour of Liteline Enterprises Limited, also a subcontractor of Pan Africa Builders. The High Court later confirmed the decree and ordered the Fund to pay the subcontractor.

The Board evaluated the chances of success in the Court of Appeal, the interest rate that was accumulating at approximately Kshs.7 million per month and decided to negotiate with Pan Africa Builders & Contractors Ltd. As at March 2011, the sum had accumulated to approximately Kshs.771209,686/=. After negotiations, the contractor accepted to be paid Kshs.590 million in full and final settlement of the claim.

The Garnishee Court Order to pay Speedwings Mercantile Company Ltd was initially confirmed at Kshs.170,000,000/= but PABCO instructed the Fund to pay Kshs.121,000,000/= as negotiated between them.

The Fund therefore, settled the claim pursuant to Court Orders which Pan Africa Builders confirmed. In settling the claim, the Fund paid Kshs.590 million down from the claimed sum Kshs.1.3 billion as claimed before the arbitrators.

The Board, in negotiating the matters out of court, have substantially reduced the contingent liabilities which are a burden to the members in the long term and also obtained cost savings.

We reiterate that the reforms embarked on since 2004 are still on course.

The Transformation Bill was published in 2005 and 2007. However, on both occasions, Parliament was dissolved and the Bill lapsed. It is now revamped in line with the New Constitution and seeks to enhance governance structures in the management of workers’ funds.

The process is ongoing and the Board held the Stakeholders’ Forum to discuss the Bill on 8 March, 2012 and it will now be presented to the Parliamentary Committee on Social Security and Welfare.

Indeed, as part of compliance with the RBA Investments guidelines and in a bid to invest prudently, the Fund commenced the process of recruiting Fund Managers and Custodians in 2008. The Manager/Custodians are now in place.

The Fund is currently paying a return of 7.5% on member accounts and will continue improving the rate of return on its investments for the benefit of members.

TOM ODONGO
AG. MANAGING TRUSTEE
3 April, 2012

"WE will not favour, we will not fear," were the words from the new Kenya Anti- Corruption Commission Executive Director as he accepted his official appointment as the country's anti-corruption czar.

On Friday, President Kibaki appointed Dr PLO Lumumba the new KACC boss and Prof Jane Onsongo and city lawyer Pravin Bowry assistant directors.

Speaking to the Star, Dr Lumumba said that he will lead the anti-graft agency into a "gloveless" war on corruption.

"The mandate we have been given is as clear as crystal, it is a new dawn and we want to walk into it together as Kenyans. The task ahead is one which is not easy but we must deliver," Dr Lumumba said.

Dr Lumumba said he will not favour any individual with corrupt tendencies and urged Kenyans to help in the war.

Through a gazette notice published yesterday the President said that the appointments will each last five years.

His two deputies will replace Fatuma Sichale and Dr Smokin Wanjala who both resigned at the height of the same pressure.

Lumumba, a renowned city lawyer, served in the defunct Constitution of Kenya Review Commission CKRC) as its secretary.

Prof Onsongo has been lead of research at the 4 Catholic University while Bowry is an advocate.

By Isaac Ongiri

Looks like Kenyans have caught the bug of perpetrating Internet fraud mainly used by Nigerians called the Nigeria 419 Scam. Or the Nigerians have camped in Kenya and perpetrate the crime from Kenya or have trained and partnered with Kenyans.

This is a con game and you are a fool to fall into the trap. Do not dare fall for these Email fraud traps. Think before you leap. When a deal is too good, think twice!

I received a letter from a Kenyan with Kenya Zain numbers asking for cooperation to access lots of cash left by a former MP.

According to Wikipedia;

An advance-fee fraud is a confidence trick in which the target is persuaded to advance sums of money in the hope of realizing a significantly larger gain.[1] Among the variations on this type of scam, are the Nigerian Letter (also called the 419 fraud, Nigerian scam, Nigerian bank scam, or Nigerian money offer[2]),[3] the Spanish Prisoner, the black money scam as well as Russian/Ukrainian scam (also extremely widespread, though far less popular than the former). The so-called Russian and Nigerian scams stand for wholly dissimilar organised-crime traditions; they therefore tend to use altogether different breeds of approaches.

... The number "419" refers to the article of the Nigerian Criminal Code (part of Chapter 38: "Obtaining Property by false pretences; Cheating") dealing with fraud.[6] The American Dialect Society has traced the term "419 fraud" back to 1992.[7]

This is the letter:

Subject: Greeting from Kenya
From: Mbogo Kombe
Nairobi – Kenya
Tel: +254 737395xxx

Dearest friend,

My name is Mbogo Kombe, the son of late Eng. David Noti Kombe, the former Member of Kenyan Parliament. I know my sudden soliciting will make anybody apprehensive and worried but I have decided to contact you due to the urgency. In April 2008, Kenyan government awarded a contract to my father to re-construct some major roads here in Mombasa city, unfortunately he dies while the constructions were ongoing.

Just last year October, I and my mother discovered some important documents indicating that my father deposited amount of US$8.2Million dollars with one of West African Banks in Burkina Faso. We decided not to disclose the information to anybody due to confiscation of our entire properties by Kenyan government because of my father’s inability to complete the contract.

Hence we are unable to pursue the transfer ourselves and also to prevent the government interference that is why we compose this letter to soliciting your collaboration to stand as my father’s business partner to transfer the money into your account overseas as we have the necessary information’s to backup the claim.

On the smooth conclusion of the transfer, you would entitle with 25% for your assistance. And Upon your responds to handling the transfer, we will send you more details on how the fund should be transferred into your account and don’t forget to provide us your contact information for easy communication.

Yours faithfully,
Mbogo Kombe
+254 737395xxx

It is a high time Sim card registration is accelerated to cut down on these opportunists.

And something is very wrong with our immigration officials. It was the Jamaican preacher, the Somali pirates, Somali Al Shabab and now the Nigerian fraudsters. NKT!

10 lessons to learn from the KCPE Results of 2009

1. Private academies pupils get better marks than their public schools counterparts. However, one cannot ascertain whether this means they are brighter, more intelligent or better than those who attend public schools. Probably.

2. The Government of Kenya is catching up with the usage of information communication technology. The minister can have the national results in a flashdisk, CD or DVD instead of those bulky paper reports. You can check your KCPE Results 2009 online (www.examscouncil.or.ke) or via SMS. Further, you can query which school you have been selected to join via SMS.

3. Free primary education is proving to be a very expensive venture for many Kenyan kids in public schools. While literacy levels are rising among the young generation, the quality and standards of education and learning are very much compromised. It is an old adage, cheap is expensive.

4. We can still know which schools are the best for our kids. The media will always tell us from which schools the best pupils come from. As a school owner, you can brag and advertise your school by listing the names of best performing candidates in the national newspapers.

5. The best pupil was a boy just like other years. Boys always lead by getting the best KCPE marks than girls. I wonder.

6. Hardwork, God, Teachers and Mums rank high as the secret to getting good KCPE marks. I did not hear any attributions to the school, team work, study groups, dads, books, school equipment, pastors, neighbours, witchcraft, food or the government

7. Cheating, cheating, cheating. It starts early in Kenya. Further, prisons do not reform prisoners. KCPE Results 2009 of Thika prisoners were canceled for cheating.

8. Ministers and permanent secretaries are not responsible at all for any financial misappropriation in their ministries. Kenyans are fools to demand accountability from any political appointees.

9. Kenyans have forgotten that one can be corrupt or be allegedly corrupt and still smile wickedly and talk arrogantly. Mta do?

10. There is so so much money in Kenya. The minister of finance can still get billions to divert to free primary education in a matter of hours after the ministry of education allegedly misappropriates its millions. The latest money minting venture in Kenya is to be the head of a Kenyan public school or work at the Ministry of Education. Primary school education is big money in Kenya.

In Kenya, gubernatorial appointees censored by the public for their incompetency or corruption allegations would rather die than resign. This is because there is nothing like resigning in the interest of the public. That is just hot air. Until and unless the appointing authority sacks or forces such an incompetent or pilfering appointee to resign ,he or she would deride the tax payers and continue to draw huge perks courtesy of the same tax payers.

It is therefore easy for one to understand why the Basic Education PS insists on the presumption of innocence. He believes that public opinion is unfairly hanging him. Yet all and sundry know that it is his incompetency that has bred “lootocracy” in the ministry. But even as he cries fowl, cryptic details of the FPE scandal continue to emerge and so do the calls for his resignation increase by the hour.

Surely, the PS must know that management of the public funds is too sacrosanct a duty to be anybody`s partisan or ideological play thing! In the absence of sound management systems, the public`s interest is sure to be deeply hurt. It does hurt really badly when the future of the children of the hoi polloi is auctioned.

And there is no denying that the Basic Education Ministry has not put in place any of these checks and balances. His spell in office as the CEO has and is still totally devoid of Efficient Management Information System (EMIS). To say that his tenure is continually plagued by a litany of questions about financial impropriety would be an understatement.

FPE which is the President`s brain child and which is a component of the larger Kenya Education Sector Support Programme (KESSP), became a cropper immediately after its operationalization. If it is not the loss of FPE funds, it is subsidized secondary education funds, infrastructure development funds, capacity building funds or funds meant for procurement of science equipment in schools et cetra. He has been unable to reign in on rogue functionaries in the ministry. Every time a red flag was raised, the PS truly struck his stride in demonstrating his penchant for rubbishing claims of the muck docking in his ministry.

He seems to believe that he can continually abuse public trust and get away with it. This explains why in spite of being advised that the interest of the nation must always come before any personal considerations he has emphatically declared that there is no question of him resigning in response to the current snowballing corruption.

Yet there is no doubt even in his own mind that his legacy is a negative one, and that he has done far more harm to the country than good. When he comically denies that no FPE funds have been lost, he himself knows too well that there is a great mountain between what his heart knows and what his tongue says!

Lest the President forces him to resign now, or sacks him, he too like the PS will have no legacy to protect. The President would be deluding himself were he to think that the constant barrage of criticism leveled against the PS is about to wane. It will not wane now nor in the near future.

As for the PS, he has a simple choice but one that will at least leave him with some level of respectability; and that is for him to leave office quickly, take a plea deal, and go quietly to prison.

JUDGES will in February decide whether to stop a Sh96 million KPC land case against Agriculture Minister William Ruto.

Judges Jane Gacheche, Leonard Njagi and Roselyne Wendoh yesterday set the verdict date for February 2.

This follows the final submissions from Ruto's lawyer Katwa Kigen.

Kigen said Ruto has asked the high court to stop the case.

He had argued that the case was instituted by Attorney General Amos Wako for ulterior motives.

But Wako said the land sold to the Kenya Pipeline Company by Ruto and his company, Berke Commercial Agencies, was a forest reserve not available for alienation.

State lawyer Vincent Wohoro told the court that the parcel in Ngong' Forest sold to KPC was public land.

The excision, he added, was unlawful because the parcel had not been degazetted. The parcel was sold to KPC through Berke Commercial Agencies whose director is Ruto.

The minister wants the high court to end criminal proceedings at the chief magistrate court, where he has been accused of obtaining Sh96 million by false pretense from the finance manager of Kenya Pipeline Company.

Ruto and Berke Commercial Agencies are challenging the Sh96 million case preferred against the two at the magistrate's court.

Ruto was charged with receiving Sh9.9 million from Hellen Njue, then financial manager of KPC, saying he was in a position to sell 4.31 acres that belonged to the Ministry of Environment and Natural Resources.

He is alleged to have received another Sh57.8 million for the sale of two parcels and another Sh28 million for a parcel in the same forest.

He is allegedly to have obtained the money on pretense that he was in a position to sell land though it is owned by the Ministry of Environment and Natural Resources.

Ruto, a company associated with him, Berke Commercial Agencies; a former aide of retired President Daniel Moi, Joshua Kulei; and two other companies have been sued for allegedly obtaining money from Kenya Pipeline Company in 2001

Corruption diverts resources from the poor to the rich, increases the cost of running business, distorts public expenditure, and discourages foreign investment. Thus corruption is a fundamental development problem that must be fought in all ways."

This was the finding of the Kenya Economic Survey 2009 by the Kenya National Bureau of Statistics. The Survey is about more than money. It is in truth a report on how we treat each other. It should really be called the Kenya Humanity Survey 2009. We came out of it very poorly. Our humanity is as bad as our economics.

The survey reveals how we have managed to create so much inequity in the midst of so much wealth. We have done the unimaginable. We have consciously manufactured poverty. Year after year from 1963 to 2009, government after government of Kenyatta, Moi and Kibaki. We have done this by our corruption. We have "diverted resources from the poor to the rich."

The promise of Independence and the struggle and sacrifice of that long and difficult fight was the opposite - that we would equitably divert resources from the rich to the poor. Kenyans were seeking more social equity than they had received under the long colonial humiliation.

That promise was broken by Jomo Kenyatta and his successors.

Kenyatta had a choice at Independence. He chose to let his government move, resources from the poor to the rich. His followers moved from legitimate sources to illegitimate sources.

They took public land, trust land, government moneys, donor moneys and parastatal moneys, always actively disregarding the fact that the land and those moneys were the land and moneys of the poor.

Kenyatta ran down those who called for the opposite. He campaigned against Bildad Kaggia, who had refused to join in this unlawful accumulation of land, wealth and power. At a public election rally Kenyatta said Kaggia was not fit to be elected because Kaggia had not become rich since Independence. Kenyatta asked him, "What have you done for yourself?" that you can claim to do anything for your voters.

Kenyatta laid the groundwork for admiring stolen wealth. It became proper to laugh at those who chose not to enrich themselves wrongfully. It was in silence that churches began accepting large harambee sums knowing these were illegally acquired.

Kenyatta's government destroyed those who reminded the people of the real promise. It sent Kaggia and many others into poverty, Jaramogi Oginga Odinga, Achieng Oneko and others into detention, and Pio Gama Pinto and JM Kariuki into their graves.

The effect was also to breakdown our constitutional framework. The constitution provided how power and resources should be managed. Kenyatta moved government and power into other hands: of those who agreed with his authoritarianism and-who he allowed to gain the most wealth. This meant that their preferences became the choices of the nation regardless of what the Constitution provided.

Their biggest preference was to move resources from anywhere to themselves. The Governments of Kenyatta, Moi and the first Kibaki term permitted this and made it into a system. It enabled them to keep perpetuating their rule.

No recognised or workable system of government is, or can be, based on such a system. It has had two dangerous results: the almost complete lack of our society's identification with its government; and, the search for simplistic solutions. Our lack of humanity as the basis for public action is also visible in these simplistic solutions.

Amongst these is the recent call by the NCCK for a "benevolent dictator".

There are many reasons why such an undemocratic call is not a good option. In the context of the Kenya Economic Survey 2009, it does not solve the problem the survey highlights.

Benevolent dictators also become rich benevolent dictators. The source of their wealth also is ultimately only the poverty of the people. Again the diversion of resources proceeds in the wrong direction.

What we need from the NCCK is a call challenging ethnic collective voting and those espousing it.

The change we have to support must be democratic, not it's opposite.

Too many politicians speak loudly about reducing poverty. They have first to stop their own corruption. Until corruption stops there can be no beginning of the reduction of poverty.

Till then our corruption will continue manufacturing poverty in Kenya.

Pheroze Nowrojee is a lawyer based in Nairobi.

Controversy over the Kazi kwa Vijana fund has raised the hackles of many, especially the youth who are supposed to be the greatest beneficiaries.

Like the Youth Funds, the KKV initiative is supposed to provide the youth with jobs which will keep them out of trouble. It is obvious from the heated exchanges that have erupted in the public domain that the KKV, while a good idea, is being implemented in a very bad way.

There seems to be no rule or dear structure behind its implementation. If the rules are there, the public is unaware of them and hence the growing complaints that some of those who have been paid are not the people who actually worked.

Unless it is checked and streamlined immediately, the KKV, like the Youth Fund, will become yet another mark that the discontented and discouraged youth will notch up against the government.

Instead of waiting until the situation is blown out of proportion by politicians and their interests, the government must immediately establish a transparent, fully accountable system to manage the cash.

For starters, auditing the money spent so far as recommended by youth groups is not a bad idea.

In his Kenyatta Day speech President Kibaki ordered Permanent Secretaries to sack any civil servants who engage in corruption.

Kibaki directed the Kenya Anti Corruption Commission and the Attorney General to institute 'effective' investigations and prosecute corrupt officials.

These are fine words but they will be received with scepticism by most members of the public who have seen huge corruption scandals go unpunished.

Apart from a few resignations, no-one has been punished for the Anglo-Leasing scandals that cost Kenya Sh65 billion six years ago.

The Serious Fraud Office in Britain conducted a series of coordinated raids two years ago and confiscated files front those behind Anglo-Leasing. But the Kenya government says it is legally disallowed from receiving this information. Isn't this just a convenient excuse?

Now the shadowy foreign suppliers behind Anglo-Leasing are about to be paid off.

Nine months ago, Yagnesh Devani of Triton fled Kenya after a Sh.9.5 billion swindle at Kenya Pipeline. Why has he not been extradited from Ahmedabad where he is living in India?

Yes, corruption must be fought at all levels of society. But the government should first show it is serious by reopening the Anglo-Leasing files and by putting Devani in jail.