Three firms supplied Sh16 billion edible oil, Trade agency says

Charma Holdings Director, Ruth Waithira Kinyanjui before Senate Trade Committee at Bunge Towers, Parliament. August 22nd,2024 [Elvis Ogina, Standard]

Only three companies supplied the Sh16 billion edible oil after the Kenya National Trading Corporation (KNTC) picked them through a distinct procurement method fronted by a committee.

KNTC Strategy General Manager Lucy Anangwe made the revelations when she appeared before the Senate Trade, Industrialisation and Tourism Committee chaired by Kajiado Senator Lenku Senki at Parliament Buildings, Nairobi, yesterday.

Anangwe told the committee that M/s Charma Holdings Limited, M/s Multi Commerce FZC and M/s Shehena Commodity supplied edible oil.

“Kenya National Trading Corporation has availed the list of suppliers who were given the contract and supplied as per the LC (letter of credit) agreement, I would like to inform this committee that the other suppliers from KNTC had their contracts revoked,” she said.

Uasin Gishu Senator Jackson Mandago had asked Anangwe why KNTC had provided a list of only three companies to the committee.

According to a special audit report released early this month, Multi Commerce is a foreign company that was incorporated in Kenya four months after signing the KNTC contract for the multi-billion shillings edible oil deal.

The Auditor General report tabled in Parliament on August 6, indicated that out of Sh16 billion,  some Sh9.3 billion were supposedly paid to firms contracted by KNTC to help the government lower the price of cooking oil in the country.

Busia Senator Okiya Omtatah wondered how KNTC picked the firms and which criteria was used for qualification, whether due diligence was done and at what point these firms were audited.

Anangwe sought the permission of the committee to provide a comprehensive response to the issues at a later date distancing herself from any wrongdoing since she was in charge of the finance department at the time of implementation of the controversial edible oil deal.

M/s Charma Holdings Limited director Ruth Kinyanjui, who appeared before the committee was pressed to clarify whether her firm was among those that hiked the prices of edible oil in the country leading to the suffering of Kenyans.

Kinyanjui refuted claims that her company had been paid excess funds or asked to refund any amount to the state.

But she was put on the spot after it emerged that her company shares the same office block with Purma Holding Limited.

According to the Auditor General’s report, the firms delivered 2.5 million jerrycans of 20 litres each out of the 2.8 million KNTC ordered, however, it emerged that some dealers sneaked in a consignment of edible oils to enjoy tax exemption.

The report pointed out a possibility of cooking worth Sh306 million oil which was not part of the programme having being exempted from taxes.  KNTC has no record of container numbers or quantities of jerrycans delivered by the mysterious supplier.

The Auditor General report raised the red flag over the deal stating that the products arrived late and did not make the much-needed impact on prices and when KNTC was given the mandate in November 2022, cooking oil traded at Sh344 a litre and went down to Sh328 in December.