Haji on the spot over Sh 1.1 billion NHIF fraudcase

Pressure mounts on DPP to revisit Jambopay’s Sh 1.1 billion fraudcase

Legal experts and lobby groups have questioned the motive behind a decision by the Director of Public Prosecution Noordin Haji to terminate charges against JamboPay bosses in the Sh 1.1 billion fraud case.  

In September,the DPP told a Nairobi court that they agreed to terminate charges of Mr Danson Muchemi together with Robert Muriithi and their company Web Tribe ltd, on condition that they cooperate with the prosecution.

Mr Muchemi and Mr Muriithi were charged last year and denied fraudulently receiving more than Sh1.1 billion from NHIF.

The lobby groups have questioned the agreement between DPP and the JamboPay bosses that sees them turned into witnesses in a case where they have adversely been mentioned.

“This is a shocking compromise to the case and casts doubts on the seriousness of the office of the DPP in handling graft cases. That he can hold separate meetings with key suspects in the middle of a case then decide to withdraw charges is unprecedented,” lawyer Benson Muchiri said.

 This comes against a backdrop of reports that the Directorate of Criminal Investigations Goerge Kinoti had sufficient and overwhelming evidence against the two.

“ There is a clear disconnect between the office of the DPP ,the DCI and EACC and this case is one good example of how a corruption case can be handled in a very shoddy manner for some mischievous reasons,” said Henry Shitanda,the former President of Bunge la Mwananchi who was the whistleblower in the case.

The Times understands that a non-governmental organization, Global Legal Action Network, also wrote to the Ethics and Anti-Corruption Commission (EACC) over the move by DPP to drop charges against Muriithi and Muchemi.

The NGO now wants EACC to take action and ensure the JamboPay bosses face the law over the financial scandal. The letter was copied to the National Assembly and Public Service Commission.

Activist Okiya Omtatah has also sued the DPP for allegedly encroaching on the mandate of the National Police Service.

Other than drawing the boundary between the mandates of the two institutions, the activist has petitioned the High Court to guidelines recently published by the DPP titled, “Guidelines on the Decision to Charge, 2019”.

“A declaration be made that Section 5(2)(b) & (3) of the Office of the Director of Public Prosecutions Act No. 2 of 2013 is unconstitutional and therefore, invalid, null and void,” he said.

Omtatah further wants the constitutional court to declare that the principal decision to charge or not to charge a suspect with a crime and registering such a charge in court is the culmination of and an integral part of the investigative process and it is strictly the exclusive mandate of the Police.

According to Omtatah, the DPP’s mandate to institute and undertake criminal proceedings commences only where a charge is contested but the DPP, he said does not have any mandate in the criminal investigation process and has no capacity in law to call for police files before formal charges are laid in a court. 

The Auditor General in his reports raised serious concerns about the involvement of Webtribe in the NHIF deal with the county government.

Nairobi residents have previously petitioned the EACC and the DCI to make public their findings on the scandal.

Interestingly, investigations carried by DCI, established that Webtribe limited was awarded tender No.NHIF/018/2013-2014 for provision of Integrated Revenue Collection Services and tender No. NHIF/001/2017-2018 for provision of Integrated Revenue collection system through a deliberately flawed procurement process to their advantage.

The investigation documents states the reason for the flawed procurement process was the item was not captured in the procurement and budget plan for the financial year 2013/2014 and 2014/2015 and despite not having been factored in the procurement and budget plan, the then chief executive officer Simeon Ole Kirgotty approved procurement of the said item.

The JamboPay bosses have previously appeared before the Nairobi City County Assembly watchdog commitees where they were unable to substantiate on the procurement process that was declared as flawed.  

Further, investigations revealed that the deputy procurement officer was instructed to prepare a procurement plan specifically for the item which upon consultation with ICT general manager, arrived at an estimated cost of Sh30 million.

The value of the tender as per the resultant procurement plan was Sh 30 million and the procurement plan did not envision any commissions.

“To the contrary, NHIF with the assistance of the evaluation committee, tender committee and with approval of the CEO awarded the contract to MS Webtribe at a cost of Sh49, 513,440.00 million inclusive of taxes being one off payment and commission on transactions banks collections, mobile money collections, electronic cards collection and agency Network collection at four percent each,” revealed the investigations.

Investigators said the actual value of the contract awarded could not be estimated and by the time the contract expired on June 30, 2017, Webtribe had ripped off the institution over Sh1 billion in commissions noting that the company was only offering a platform (system) that would relay information on transactions conducted by NHIF and therefore it did not make logic for them to get commissions on what the system was expected to do.

The DCI also established that the said contract entered between Webtribe limited and NHIF on August 15, 2014 had a three years lifeline and was to expire on June 30, 2017.

However, on August 25, 2017 two months after the contract had expired, NHIF CEO Geoffrey Mwangi aided by the head of procurement Pamela Marendi made two extensions of six months each, thereby extending it by one year during which Webtribe limited fraudulently benefited from commissions of Sh.226,157,936.

It was further found that Webtribe did not fulfill the terms of the contract as per the expected deliverables as undermentioned which would have enabled NHIF to manage the system operations on their own. It also emerged that the company never provided NHIF with a webserver for which they were paid Sh3,500,000 and never provided NHIF with Point of Service Terminals (P.O.S) for which they were paid Sh16,000,000.

After completing investigations, the investigation team forwarded the duplicate inquiry file to the DPP on November 19,2018 vide DCI letter Ref. DCi/IB/SEC./4/3/1/VOL.III/151 where Haji in consideration of the evidence presented before him directed the eighteen others, Webtribe limited, Danson Muchemi and Robert Muna to be with fraudulent acquisition of public property.

Due to the fact that Webtribe through IMSS had acquired crucial transaction records and NHIF members’ data and immediate termination of the services without an alternative would cripple the operations of the funds, prosecution applied for an order barring Webtribe from interfering with IMSS until the matter was heard and determined.

Trial magistrate Douglas Ogoti had on December 11, 2018 barred the company from interfering with IMSS.

Attempts by the company and its bosses  to set aside orders by the trial court in the High Court flopped and later they resorted to threatening NHIF with imminent disruption of services through numerous correspondents to the fund payment was not made to them as a result of the continuation of services.

While withdrawing the charges, prosecution stated that “That pursuant to lawful compromise between the DPP and the directors of WebTribe, the court does grant a pardon to the office of prosecution as enslaved by section 5(1) of the Anti-Corruption and Economic Crime Act. That consequence thereto Muriithi and Muchemi be freed and or discharged as accused persons in this case and or any other case arising from the same or similar fact,”.

The DPP has urged the charges withdrawn under section 87(a) of the Criminal Procedural Code (CPC) on grounds that they give evidence against their co-accused persons surrounding the award of the contract of revenue collection at NHIF.

Some observers have alleged that   the move by the DPP has blessings from unknown people who want to rescue the ‘the young webtribe company from efforts to collapse it’.

This however throws the war on corruption in disarray and Nairobi residents will eagerly be waiting to see how this will end.

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