She said that Leadership Edge Associate made huge withdrawals both in cash and M-Pesa transactions and by the time they received a money recall order from the Central Bank on October 27 the account balance was only Sh300.
Banks operating accounts of five companies named in the theft of Sh51 million from the Kilifi county government bank account have spoken out, telling the county assembly’s committee investigating the scam that they transferred the funds to their clients after the companies produced required documents for payment.
Representatives of Consolidated Bank, Diamond Trust Bank, Jamii Bora Bank and Equity Bank told the committee that after asking their clients to provide supporting documents for the huge sums of money they were receiving from the Kilifi county government, they produced several, including Letters of Notification of Award of tender, Local Purchase Orders (LPOs) and invoices, signed by the County Secretary Owen Baya.
Speaker Jimmy Kahindi who chairs the assembly oversight committee said the documents will be checked for authenticity.
Central Bank and Integrated Financial Management Information System (Ifmis) officials who had also been summoned and did not attend are expected before the team on Friday December 9, he added.
STOLEN THROUGH IFMIS
Sh51 million was stolen through Ifmis in a collusion of a cartel believed to comprise county officials and outsiders.
Governor Amason Kingi has suspended 10 officers whose passwords are said to have been used in the theft.
Hilda Gituro, a DTB bank representative said their client, Leadership Edge Associate Ltd, had an opening balance of Sh1,054 on October 2, 2016, a day before they received a sum of Sh7.8 million payments from the Kilifi County Government.
“The client had informed us at the time of opening the account that he was expecting large sums of money for a business he had undertaken,” said Ms Gituro.
She added that when the money was wired to the account on October 3 they asked their client to bring supporting documents.
“When we asked for the documents to support such a big transaction, the client brought to us a Letter of Notification of a tender award and an invoice dully signed by the county secretary Owen Baya.
“We did not suspect any fraud since this money had been paid by the county government and the supporting documents were also from the county government,” she added.
Asked by the speaker to reveal the content of the invoice, Ms Gituro said the company indicated that the payment was as a result of training the company had undertaken for county staff.
SH300 ACCOUNT BALANCE
“We received a money recall order from the Central Bank who said that the money was paid in error to the client. At that time, the client had withdrawn the account to a balance of Sh300. The account is now frozen,” said Ms Gituro.
Edward Nthuli, a Consolidated Bank representative, said the bank received Sh7.1 million for Makegra Supplies Ltd, with the remitter being the Kilifi County government on October 3, 2016.
“When we asked for supporting documents, our client gave us a copy of a tender document to supply building materials, signed by the Kilifi County secretary Owen Baya, indicating that the payment was for the supply of building materials. On October 7, 2016, we again received Sh3.2 million from the Central Bank, with the remitter still being the Kilifi County government,’’ he told the MCAs.
Mr Nthuli said they were concerned about the nature of the transactions and decided to call the county, through contacts that were written on the tender documents, but they (telephone numbers) could not go through.
“We then telephoned the county secretary but the line was not going through. We wanted to know the authenticity of the documents the client had presented to the bank. We emailed him through the official county email address which had been placed on the document, on October 7, 2016,” said Mr Nthuli.
He said that four days later, they received a reply to their email sent through a Kilifi county Gmail account with an attachment. It was written by Francisca Dhahabu on behalf of the County secretary dismissing the documents as fake and saying they should be ignored.
Makegra Supplies Ltd had already transferred Sh4 million from Consolidated Bank account to other bank accounts.
THROUGH M-PESA AND CASH WITHDRAWALS
Speaker Kahindi’s committee heard that most transactions worth Sh6 million were done between October 2 and October 7, through M-Pesa and cash withdrawals in the bank.
Mr Nthuli said their other client, Kilingi Investment Company Limited, received Sh3.2 million from the county government on October 3, 2016.
He added that they received a recall order from the Central Bank on October 27, 2016 indicating that the money had been paid to their clients erroneously and should be immediately reverted to the Central Bank.
“Makegra Supplies had a balance of Sh333, 286 which we remitted back to the Central Bank,” said Mr Nthuli.
John Njenga from Equity Bank, said their client Daima One Enterprises, received a payment of Sh7.2 from the Central Bank with the remitter being the Kilifi County Government October 3, 2016.
“The client upon request to give us supporting documents for the transactions, gave us a notification of a tender award and an LPO, signed by the county secretary. Then there were huge cash withdrawals until on October, 7, 2016, we received a recall order from the Central Bank and we reverted Sh4.1 million to CBK,” he said.
Benedict Wamtere from Jamii Bora Bank said that Zohali Supplies Ltd’s bank account continued receiving money even after the account was frozen. On October 4, Zohali Supplies account received Sh5.3 million and supporting documents were an LPO indicating that they had offered training services for county staff at Mnarani Hotel and refurbished county assembly and the governor’s offices including installation of CCTV cameras.
On October 7, Zohali again received Sh3.8 million from the county government but presented an invoice from the Ministry of Devolution in Nairobi.
He was put to task to explain why they approved a letter indicating that Zohali Supplies Ltd offered services to the Ministry of Devolution in Nairobi yet money was paid by Kilifi County. He said it was an error and that he would avail the right document.
“Sh3.7 million was returned to CBK after an order that the money had been erroneously sent from Kilifi central account to Zohali bank account,” he added.
The committee was told that Zohali received Sh5.3 million from the Kilifi county government after presenting an LPO to show that they had offered the training services