Counties on the spot over Rigathi tender bi*lions
At least four counties are in the cross-hairs of detectives investigating suspected money laundering by Mathira MP Rigathi Gachagua, who is believed to have been paid millions of shillings for sub-standard work or delivering faulty equipment.
Sleuths probing a Sh12 billion fortune accumulated by Gachagua over a period of seven years suspect the lawmaker may have used his position and proximity to his late brother, then Nyeri governor Nderitu Gachagua, to reap big from various county governments across the country.
In focus are Governor James Ongwae’s Kisii county, Bungoma county (then under current Senate Speaker Kenneth Lusaka), Salim Mvurya’s Kwale county and Nyeri county (under the reins of the late Nderitu Gachagua and Samuel Wamathai Githaiga) and Patrick Wahome Gakuru (also deceased) where Rigathi Gachagua is believed to have had leeway in influencing tender awards.
Preliminary documents compiled by the Assets Recovery Agency (ARA) and the Serious Crimes Unit at the Directorate of Criminal Investigations (DCI) paint a picture of a man who built a well-knit network within the devolved units that helped him easily win contracts that were followed with prompt payments.
“I remember when I met Raphael (one of the purported suppliers) we were with Jimcarter where the former told us that Rigathi being an influential person, could help in financing our future businesses as well as ‘opening doors for us’”, a witnesses, David Reuben Nyangi Nguru, a director of Rapid Medical Services, states in a statement.
Detectives claim that companies owned by Gachagua or associated with him were paid for work not done or incomplete undertakings, and in some instances, the fees were inflated.
Police also believe that the first-term MP may have preferred using proxy companies and businesses to receive funds from the national and county governments to conceal the ultimate beneficiaries.
In most cases, the funds received were ultimately channelled to companies associated with Gachagua and his family.
The detectives have unearthed a trail of cases where loans were purportedly acquired to cover up for funds received from government entities.
“However, these loans have been used to cover-up for funds received from government departments or inter-company transfers in a bid to conceal the ultimate beneficiaries of funds,” the report says.
According to detectives, it was difficult to ascertain whether the companies made any supplies to some counties as the bank accounts made minimal or no payments to suppliers, which is normal for any transaction.
The detectives have also raised the possibility of the lawmaker using kick-backs or payments to influence award of lucrative tenders in counties, particularly in Nyeri.
Now the DCI, under the request of ARA which has moved to court to freeze Gachagua’s accounts, has heightened investigations in Kwale, Nyeri, Bungoma and Kisii to ascertain whether supplies were indeed made for the payments received.
Dialysis kits
One of the companies of interest is Asoma Enterprises, which is owned by a salonist, Julia Muthoni Mwangi, who was an employee of Gachagua at his Ellison Hair dressing based at the Anniversary Towers in Nairobi.
Muthoni also opened a cleaning company, Klinshine Limited, that used to clean Gachagua’s office. Asoma Enterprises won several tenders in Nyeri county government including upgrading Thungari dispensary bridge road, upgrading of Karafani-Gatome road, and installation of culverts at Charity-Manooro road, among many others.
The firm was paid Sh5.7 million between January and February 2015, by the county government , which it immediately transferred to Petilco Agencies, closely associated with Gachagua.
Though Muthoni insisted that the road works had been completed, investigators who visited the ground said nothing had been done. Muthoni’s company is also said to have been awarded other smaller tenders that included the roofing of eight classrooms and levelling of a school field worth Sh826,094; replacement of eight classrooms at Gatiko Primary School worth Sh938,980; roofing of toilets at Ngaini Primary School worth Sh525,105; and completion of construction work at Ngaini AP post in Mathira constituency worth Sh1.4 million.
Another company, Blueline Suppliers, was awarded a Sh9,045,636.65 tender for supply of survey tools and equipment in Nyeri. Sh2.98 million of the proceeds was transferred to Petilco Agencies.
In the same Nyeri county, Rapid Medical Supplies Ltd was paid a total of Sh27.4 million for the supply and installation of 10 dialysis machines as well and a water treatment plant and dialysis kits.
Detectives say that after supplying the dialysis machines in June 2014, one of the machines was not functional.
Interestingly, the company replaced the machine with another one that was equally not functioning. The company also supplied conductivity sensors and heating pumps that only worked for a few hours before they failed.
In the case of Bungoma county, detectives are investigating how the county made direct payments amounting to Sh112 million to companies associated with Gachagua between June 2015 and 2019 for goods such as beds that were substandard.
A witness, JimCarter Njagi, has recounted how his firm, Encartar Diagnostics Limited, had quoted Sh65 million to supply equipment, but Gachagua instructed him to quote a higher figure, Sh120 million, saying he could influence to inflate it.
“Under his instructions, we filled in a new price schedule of Sh123.92 million.
After we were awarded the tender and we informed him, he communicated with Rafiki Deposit Taking Microfinance (DTM) to give us a loan,” Njagi states in his statement.
Njagi had in 2014/15 financial year, applied for a tender to supply theatre, ICU and maternity equipment to five health facilities in Bungoma county.
The businessman further states that he was introduced to Gachagua by a friend, Raphael Nguma. He then asked Gachagua to assist him with funding to deliver the equipment to the county.
“I agreed with Rigathi that he was to introduce me to Rafiki Microfinance where I was to be granted a bank loan of Sh32 million LPO financing using his fixed deposit as security, meaning I was not giving anything.”
Njagi opened an account with the bank under his company name and applied for a loan of Sh32 million using Rigathi’s fixed deposit as security. Gachagua directed that for him to guarantee the loan, his secretary had to be introduced to Njagi’s company account at Rafiki.
That meant Njagi could not transact the account without the secretary. This was done, and the company performed the work and the county government of Bungoma paid Njagi’s bank in phases, totalling Sh123 million. But when he went to withdraw the money from the bank, he realised he had no money in the account.
“I went to Rigathi’s secretary, one Juliana Khamunyi, who told me she was instructed by Rigathi to withdraw the money and pay a supplier in Beijing Sh32 million and the transporter Sh6.5 million and others a total of Sh5 million,” Njagi states in the statement he recorded at the DCI headquarters.
When he followed up the matter, he confirmed that no payment was ever made to the supplier or transporter, as alleged.
Even the bank loan was not paid and the loan has continued to accumulate with the bank now on his neck demanding payment.
The same experience was replicated in Kisii county where Encartar Diagnostics was awarded a tender to supply and instal a 16 multi-slice computed tomography, commonly known as CT scanner, at Sh52 million.
Detectives want to establish how Encartar was included as one of the bidding firms at the last minute and eventually won the tender.
Also of interest to investigators is how another company, Rapid Medical Supplies, associated with Gachagua, was awarded a Sh42.5 million tender to supply five ambulances at a cost of Sh8.5 million each despite having been the second lowest bidder.
In Kwale county, the spotlight is once again on Encartar, owned by Njagi that supplied a Sh12 million incinerator housing unit at Msambweni District Hospital that never functioned even after being paid Sh9.6 million.
The Kwale contract had its share of drama as the MP is said to have used intimidation and threats on one of his proxies, who ended up transferring Sh112 million out of a total payment of Sh113 million, to the MP’s account. The supplier of materials was never paid nor was Jimcarter who was fronted in the tender.
“Kwale county did not pay us the full amount as the installation and training was not done at that time, reason being my company ran short of funds since he had transferred the entire amount to himself and he could not release any amount to complete the said work,” Jimcarter says in his statement.
He adds: “In simple terms, in all the above transactions, Rigathi controlled everything and I had no say since I could not even do a single transaction without informing him or his secretary Juliana , who could inform him.”
