Thursday, November 30, 2023

How Joho family company got SGR deal on forged papers

A company that is associated with the family of former Mombasa Governor Ali Hassan Joho secured an SGR cargo terminal deal in 2018 based on forged papers.

This has been revealed in a report by the auditor general. According to the report, the company known as Autoports Freight Terminal Limited was awarded the operation contract on concessionary terms based on forged board resolutions that were staged by the former Kenya Railways Corporation Managing Director.

The report from the Auditor General Nancy Gathungu’s office cites that Joho family’s business had sought to pay a discounted freight tariff of $450 per wagon of 60 tons for a period of 10 years, waivers of stand premium and annual rent premium for 10 years, automatic renewal of its 45-year lease and a termination clause period of 24 months.

However, the Kenya Railways Corporation board voted to reject these waiver appeals. The board argued that these waivers  were only available to firms setting up their own greenfield facilities and not those using existing terminal facilities.

After this board resolution, the then acting managing director at railways wrote to the Transport Cabinet Secretary saying that the board had approved the appeal by Joho family’s business in a move that effectively falsifying the resolutions of the board.

“There was a letter from the acting MD (Ref: KRC/CS/MD/3/388) dated December 14, 2018, addressed to and received by the CS for Transport on December 17, 2018. The content of the letter misguided the CS that the board approved all the conditions of Autoport’s appeal and was requesting for the CS’s approval. The special audit did not obtain any official written correspondence from the CS responding to this request,” the report by the  Auditor-General states.

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“A letter was then sent to Autoports by the acting MD (Ref: KRC/CS/MD/3/338) on the same day communicating a resolution of the board and indicating concurrence by the CS contrary to the actual events.”

In addition to this, the Auditor-General said that the special audit could also not independently ascertain the origin of the contractual arrangement between KRC and Autoports, or what the firm had expressed as its interest to invest to support the movement of cargo via the SGR.

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