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| Anglo Leasing scandal hinged on 18 security contracts including a secure passport equipment and a forensic lab to aid in police investigations. |
By James Anyanzwa
Taxpayers are set to lose in excess of Sh1.6 billion in awards and penalties in Anglo Leasing scandal related suit, which was concluded in two European courts last year, a top official at the National Treasury has said.
The suit, which the Kenyan Government lost in London and Swiss courts on December 20, has attracted $7.6 million and $10.6 million in awards respectively.
In addition, the Government will pay cumulative penalties of Sh276,000 ($3,065) in interest per day for its failure to settle these cash awards.
The penalties include Sh150,000 ($1,665) per day on the outstanding $7.6 million award and Sh126,000 ($1,400) per day on the unpaid $10.6 million award.
Dead end
An attempt by the Solicitor General to appeal against the court rulings has hit a dead end.
Sources said Kenyan assets in the international markets run the risk of being attached including the proceeds of the planned $1.5 million sovereign bond.
The latest development, which is now holding back the issuance of the planned Eurobond, has now put the National Treasury’s expenditure plans in a fix.
“The sooner the Government settles these court awards the better, otherwise you can imagine the implications it is going to have on our reputation as a country and the planned sovereign bond,” a source who declined to be named told The Standard yesterday.
Anglo leasing scandal was revealed in 2004 with claims that senior ministers in former President Kibaki administration were involved.
The scandal hinged on 18 security contracts, including a secure passport equipment system and a forensic science laboratory that were never supplied. The Government had planned to raise about $1.5 billion through the issuance of a sovereign bond that will support infrastructural development in the country.
National Treasury Cabinet Secretary Henry Rotich explained recently the proceeds of the bond would be deployed for infrastructure programmes in line with the priorities of the new Jubilee administration.
It will also help refinance the short-term syndicated loan of $600 million from Citibank (London), Standard Bank (South Africa) and Standard Chartered Bank (London).
The sovereign bond — which refers to a debt instrument bearing interest and issued by a country — is also expected to act as a benchmark bond to catalyse private sector participation in the international financial market where conditions are currently favourable for investors in the country.
