Murathe named in Kemsa deal by Chinese partner

Jubilee Party Vice Chairman David Murathe influenced a company he was associated with to win a Sh4 billion tender at the Kenya Medical Supplies Authority (Kemsa), documents tabled by a parliamentary committee have revealed.

The documents show Murathe used his authority to have Kilig Limited awarded the huge tender to supply Personal Protective Equipment (PPEs).

One of the directors of the firm, Chen Chao, a Chinese national, who is also a director of Entec Technology Limited, which was to supply the PPEs, told the committee that he knew Murathe and his co-director Willbroad Gatei.

“Murathe is a respectable high-standing member of society in Kenya and that in order to further safeguard and guarantee Entec’s receivables under the supply contract and protector investment, I requested him to be a guarantor for this transaction by being a mandatory signatory together with me in the Kilig Ltd account in Equity Bank,” Chao says in his sworn affidavit to the Public Investment Committee.

However, Murathe, in his affidavit to the committee, denies being a director or a shareholder or beneficial owner of Kilig Limited or Entec Technology.

“Kilig and Entec companies only requested me to be a signatory to Kilig Ltd bank accounts to guarantee that Entec Technology as the supplier of the PPE kits would be paid upon completion of the procurement process and I obliged,” Murathe told the committee chaired by Abdulsamad Nassir (Mvita).

During yesterday’s meeting, members demanded that Murathe must be made to appear physically to defend himself.

Julius Melly (Tinderet) TJ Kajwang (Ruaraka) and Rashid Amin (Wajir East), said the Jubilee party official was the broker in the whole deal, who used his position to have the commitment letter issued.

“Murathe is one character who uses his closeness to the executive to influence deals.

He is a known broker who cut deals by forcing State entities to award deals to foreigners,” claimed Amin.

The committee is considering the special audit report on the utilisation of  Covid-19 funds by Kemsa.

Chao told the committee that at the beginning of June 2020, Gatei together with Kilig Ltd, which was under the directorship of Ivy Minyow Onyango, approached him on a business opportunity explaining that Kilig Ltd  got a commitment letter from Kemsa for supplying 450,000 PPEs.

Kilig wanted Chao to arrange the supplies from China and provide a supplier’s financing. “After several rounds of negotiations, Entec Technology Co. Ltd (Entec), where I am a director and Kilig Ltd entered into a sales agreement to provide financing and supply the PPEs to Kilig Ltd on June 16, 2020,” Chao explained.

Due payment

The agreement provided that the two parties would open an Escrow account to receive the payment from Kemsa and transfer the due payment to Entec’s account directly.

However, Equity Bank did not offer Escrow Account services and so the parties agreed to instead, open an account under Kilig Ltd and included Chao as a mandatory signatory in the account mandate.

It was after this that Entec imported an initial batch of 50,000 kits of PPEs, which were well packaged in conformity with Kemsa packaging standards and quality assurance.

Samples worth Sh9 million were delivered to Kemsa’s warehouse on Kilig’s account before the intended final delivery on the dates given in the Commitment Letter.

Chao said Kemsa wrote to Kilig Ltd  informing them that the letter of commitment had been cancelled.

He says as a result, his firm is facing a huge loss amounting to USD2 million (Sh200 million) being the cost of purchasing the PPEs.

“The PPE Kits are still well stored in our warehouse in Mitchell Cotts, Nairobi,” Chao says in the affidavit.

Murathe says the Commitment Letter by Kemsa to Kilig Ltd was cancelled, citing limited budget for Covid-19, which had been exhausted thereby resulting in no delivery, invoicing nor payment for me to guarantee, because there was no initiation of a procurement process after the cancellation of the letter.

“I thereafter ceased to be a signatory effective August 5, 2020 and I am not a signatory to any account henceforth,” Murathe says.

Gatei, who said he could not attend the meeting, as he was down with flu, told the committee that he resigned as a director of Kilig Ltd  and transferred his shares to Collins Wanjala.

When she appeared before the committee, Ms Onyango, who claimed to be one of the owners of Kilig Ltd refused to reveal the identity of other directors. 

Ms Onyango reluctantly revealed that the original owners who registered Kilig were Wilbroad Gatei Gachoka and Zhu Jinping, a Chinese.