Ethics and Anti-Corruption Commission probes Sh700m Kenya Ports Authority pension-scheme project

The Ethics and Anti-Corruption Commission (EACC) has launched a probe into the operations of the Kenya Ports Authority (KPA) Retirement Benefits Scheme.

This comes after the scheme entered an agreement to buy assets worth Sh700 million in Vipingo, Kilifi County last year.

KPA's management has opposed the deal between the scheme and Kikambala Development Company and challenged it in court.

Earlier this year, KPA obtained ex parte orders from the High Court stopping further transfer of money from the scheme to the vendor after learning that Kikambala Development Company's lawyer had already received Sh70 million as down payment for 12 prime plots.

KPA challenged the deal claiming it was not consulted by the pensioners despite being a a trustee of the scheme which involves its employees.

The scheme denies KPA is its trustee and insists the KPA management has no legal right to interfere with the management of the scheme.

The scheme also got ex parte orders stopping KPA from interfering with the deal and the proposed project.

Now the scheme has moved to the Court of Appeal seeking orders to have KPA barred, permanently, from interfering with the pension scheme and judgement will be delivered on September 30.

It is not clear how and why EACC joined the dispute but The Standard has established that the commission has written to KPA's Managing Director Gichiru Ndua seeking documents used in the disputed purchase transaction.

The Standard has also not established why EACC is seeking these documents from KPA yet the documents are part of the proceedings in the two courts.

A letter from EACC's Acting Deputy Director for Asset Tracing and Preliminary Investigation David Kangaro, dated July 21, asks Mr Ndua to furnish the commission with the documents to enable it investigate allegations that the KPA retirement benefits scheme irregularly entered in an agreement for the purchase of land.

"The commission is carrying out investigations into allegations that KPA Retirement Benefits Scheme irregularly entered into an agreement for the purchase of land in Kikamabala near Vipingo in Kilifi County...," says the letter in part.

The letter also asks Ndua to "furnish us with the originals of the following documents," and names the documents as memorandum Number 53 of 2015 addressed to the KPA board of directors from the managing director.

DOWN PAYMENT

Other documents sought are a report dated October 13 2014 "on the benchmarking exercise between KPA Retirement Scheme 2012 and Kenya Power Company."

The scheme, led by Trustee Chairman Paul Harry Arigi, took the KPA management to court on April 16 this year and got a temporary injunction stopping KPA from interfering with its running.

The scheme officials accused KPA officials of trying to dissuade the board of trustees from buying the plots. They argued that it was part of their work to raise funds for the scheme before members start retiring.

The battle started on April 16 when the board of trustees went to court and accused KPA's top managers of meddling in their affairs.

The pensioner's lawyer Randolph Tindika told the court that while the scheme was preparing to complete the deal with Kikambala Development Company, KPA's Legal Services General Manager Muthoni Gathere rushed to court and stopped the transaction.

Mr Tindika said KPA stopped the deal after the scheme had paid Sh70 million as down payment to lawyer Joseph Kanyi who is acting on behalf of Kikambala Development Company.

Tindika told the court that despite having paid Sh70 million to the lawyer, the money was never transferred to the company because they were awaiting the outcome of the constitutional case they had filed before the Court of Appeal, in which the board of trustees wants KPA's MD to be stopped from interfering with the running of the scheme.

The board of trustees argue that KPA's role is very limited when it comes to the running of the scheme, despite it being the financier of the same.