KACC probes two PSs over mining deal

The latest case adds to the workload of Dr Lumumba (above), the KACC director, whose commission has hit the headlines with a number of bold moves against senior figures in the last few months.. PHOTO/STEPHEN MUDIARI

By MURITHI MUTIGA mmutiga@ke.nationmedia.com
Posted Saturday, October 30 2010 at 22:14

Kenya Anti-Corruption Commission chief Patrick Lumumba on Saturday night confirmed the agency had opened an investigation into the conduct of two permanent secretaries said to have been involved in the award of a mining licence to a company which applied for the permit using forged papers.

KACC is investigating the circumstances under which the firm, whose certificate of inception includes the name of a sitting PS, landed the deal.

Another PS is on the spot for disregarding a warning from the Law Society of Kenya (LSK) that one of the firms which landed the deal forged the letterhead and signature of one of its members in its application.

“I can confirm that we wrote to KACC after learning that the firms in question, Criss Cross Mining Limited, Merchant Mining Limited Company and Ameekha Company clinched the deal after initially relying on forged papers,” said LSK secretary Apollo Mboya.

The new investigation is the latest high-profile graft case to rock the grand coalition. It comes at the end of a dramatic two weeks in which two ministers William Ruto and Moses Wetang’ula and Nairobi Mayor Geophrey Majiwa were forced to step aside over corruption allegations.

The deal in question involves the award of potentially lucrative iron ore exploration deals to a firm which eventually transferred the rights to the company in which the PS was listed as a founding member.

When the department of mines ran a due diligence check on the application by Criss Cross company, they discovered that the law firm they had listed – Kasyoka Associates Advocates of Lower Kabete ICHRD – did not exist at that address.

Investigations by the LSK discovered that the applicants had forged the letterhead and signature of the partners of Kasyoka Associates Advocates which is based in Makindu, according to a letter written to the KACC chief by Mr Mboya.

“This was a case of blatant fraud,” says Mr Mboya. “We were upset because the names of our members were being used to support illegal transactions.”

According to documents which have been forwarded to KACC, the commissioner of mines warned against the endorsement of the mining deal. The LSK also wrote to several government departments cautioning that the deal was fraudulent.

But Criss Cross Mining Limited and Merchant Mining Limited Company eventually got the concessions. Ameekha Company later acquired a substantial stake in Criss Cross.

The lawyer whose letterhead was used to make the forged application said he was surprised to learn that his firm had apparently been involved in an application at the department of mines.

“I was called by the LSK and they asked me whether I was aware of that deal and if I had an office in Kabete,” said Samuel Mutinda Kasyoka, of Kasyoka Associates Advocates.

“I had absolutely no idea what they were talking about. I have never owned an office in Kabete. Another close friend of mine was said to have commissioned the deal and he was also in the dark about it all. That’s when we lodged a complaint about the forgery of our papers.”

The latest case adds to the workload of Dr Lumumba, the KACC director, whose commission has hit the headlines with a number of bold moves against senior figures in the last few months. In the letter from the LSK complaining about its suspicions of fraud, Mr Mboya wrote:

“We draw your attention to the provisions of section 19 of the Mining Act Cap 306 of the Laws of Kenya providing a penalty for giving false information by applicants for an exclusive prospecting licence. In accordance with our statutory mandate, we advise that the transaction relating to the application for the mining licence should be suspended and the matter referred to the relevant investigative authorities to determine the web involving the three itemised companies and the individuals who authored the fake correspondence purporting to be from our member.”

KACC director Dr Lumumba replied that the commission had “noted the contents” of the letter. He confirmed to the Sunday Nation on Saturday evening that his team had taken up the matter.

The latest case is expected to shine a light on the opaque process of granting of mining licences to firms to explore and exploit mineral deposits in the country.

A list of directors listed at the inception of Ameekha company which benefited from the controversial allocation listed a sitting PS as a director.