The fall of a construction giant – Spencon

Joel Gunter & Charles Young, BBC Africa Eye 

Andrew Ross and Steven Haswell were in Nairobi on a rescue mission: to save a struggling Kenyan construction giant Spencon.

They had been appointed as directors of the company by US investment firm Emerging Capital Partners (ECP), which had in 2006 and 2007 invested a total of $15 million (Sh2 billion)  in Spencon – including $1.5 million  (Sh196 million) of UK government aid money designed to boost the Kenyan economy … 

…Africa Eye showed evidence of a $80,000 (Sh10.4 million) payment to Jeremy Carver, a lawyer who helped draft the UK’s anti-bribery laws. 

“The payment of $80,000 (Sh10.4 million) is pretty well documented in the papers that I have seen,” Carver said.

“It looks like a bribe, it smells like a bribe and it’s paid by people who work for a company who are plainly trying to keep it secret.”

According to UK law, if a British citizen is involved in bribery, it doesn’t matter where in the world that alleged bribe took place. 

“For the British Directors, and indeed anybody involved in the payment, they on the face of it need to be investigated,” said Carver.

Rose Osiemo (Spencon’s lawyer)  denied paying any cash bribes to anyone to settle the Mombasa claim.

She said the money was a fee paid to an unnamed consultant contracted after four independent engineers were to inspect the site and write a report confirming the works were complete. One of those engineers, she said, gave her documentation.

Bribing State officials

A document emailed to Haswell the next day lists the $80,000  (Sh10.4 million) payment under expenses, with no contractors named. Ross declined to comment on the expense claim. Haswell said he had no first-hand knowledge  about the transaction.

Both declined to say who received the money or why the payment had to be made in cash, saying the money went to debt collection agents.

They also denied bribing government officials, saying WhatsApp messages and emails had been taken out of context.

Ross said he and Haswell informed the ECP board of the progress of the expenses claim and the parties it dealt with.

ECP said it had no knowledge of how any replacement certificate was obtained.

As they attempted to turn Spencon around for sale, Ross and Haswell needed to make a clean break from the firm’s past.

But they were hampered by a lawsuit filed against Spencon by the firm’s founding family, the Patels, over the ECP takeover back in 2014.

Pragnesh Patel, whose father founded Spencon in 1979, told Africa Eye that Ross and Haswell called him to a meeting at Kempinski Hotel , Nairobi in December 2015 and offered to give up Spencon’s share in a piece of valuable land in return for dropping the suit.

When Patel asked what would happen if he refused, the two British bosses dropped a name of a potential purchaser for Spencon’s share of the land- the Akasha family. 

The Akashas are notorious Kenyan gangsters. In August 2019, Batktash Akasha was sentenced to 25 years in jail in the US for running a global drugs trafficking operation. In January, his brother Ibrahim got 23 years.

Tony Sanghani was one of those who knew the Akashas well. According to evidence given during their court case, the Akashas beat him so badly during a drugs turf war in 2014 that Sanghani ended up in a coma.

Pragnesh Patel was afraid. He left the meeting and went to consider his options, then he asked Ross for a second meeting, where he  recorded the talk on his phone. 

Patel  asked Ross if the connection to the Akashas is genuine. “It’s genuine, Pragnesh,” Ross replies. “It’s not us playing games, it’s genuine”. 

“This is very serious,” said Patel. “You know, the Akasha family are the equivalent of Al Capone. Even if they know that I’m trying to block a sale, they can actually send a hitman and things like that.”

You snooze, you lose

It was one of several times Patel voiced his fears about the company potentially being sold to the Akashas. In the recording, Ross is not heard contradicting those fears.

Ross denies threatening Patel with the Akashas. When Africa Eye sent him a transcript of the recording, he said at no point did he mention the Akashas.

According to Haswell,  at no time did Spencon consider transactions with the Akashas, and suggested Patel was trying to entrap Ross.

He said he had no knowledge of the Akashas until Patel mentioned them.

By the mid- 2016, Spencon was on its knees. The final days of the firm were about to play out at the maintenance depot outside Nairobi that had become its home. 

Nancy Ntinu, the head of HR, worked with Ross and Haswell in basic offices in wooden buildings on the depot grounds.

Staff salaries were drying up and workers were getting angry. Many, including Ntinu, had not been paid in months.

“I was literally crying every day because I couldn’t believe the kind of situation I’d got myself into,” she said.

Ntinu told Africa Eye that Ross ran through a list of staff, instructing her who to pay and who not to pay. 

“There was one female colleague who was on maternity leave and he took off her name. I asked why and he said, ‘Well, you snooze, you lose’.”

One person always got paid, Ntinu claimed – Ross. “He would always pay himself,” she said.

At the depot, Spencon staff worked without pay in the hope the company would be saved.

According to Ross,  the lowest paid staff were always paid first and his own pay was delayed on several occasions. He denied using the phrase, ‘You snooze you lose’. 

It was all over 

Ross was on a golfing holiday in Turkey when he finally signed insolvency papers for Spencon.  In Nairobi depot, bailiffs had begun to seize company property. 

When Ross returned, he called a meeting to give staff the bad news. They were furious, and a group of about 15 came to Ntinu to demand answers.

“You are talking about very angry people, who are hungry, who don’t have anything to feed their families,” she said. 

Ntinu knew then that it was all over. She told Africa Eye she lost seven months of pay – about £39,000 (Sh3.9 million).   

After almost four decades in business, Spencon was gone. Not far behind were Ross and Haswell. 

“We heard one morning that they had boarded an aircraft and gone back to the UK,” said Ntinu. “And that was it.” 

Ross and Haswell told Africa Eye they were proud of their time at Spencon, saying it was managed in a challenging business environment against a backdrop of inherited debt, within the law and always with legal advice.

They said they had to flee Kenya because they were facing threats, and that they continued to work on Spencon business unpaid for another four months.

Three-and-a-half years on, both men are now employed in senior positions in UK firms.