Senators claim Sh9 bi*lion edible oil now missing

The Sh9.3 billion oil at the centre of an importation controversy is missing from the Kenya National Trading Corporation (KNTC) warehouses. It also emerged that the oil could have been condemned after health officials found it to be unfit for human consumption.

Yesterday, members of a Senate committee were shocked after they were blocked from inspecting the warehouses holding the oil. It was the second time that the senators had been prevented from inspecting the commodities.

The consignment included 125,000 metric tonnes and jerricans, which meant that 6,875,000 20-litre jerricans were imported. However, officials agreed to open one of the warehouses within the premises of its headquarters but found out that only 466 jerricans were in the store.

The committee was out to establish why the figures of jerricans given by the Ministry of Trade and Investments and those by the KNTC differed.

When the Senate Committee on Trade, Industrialisation and Tourism toured the KNTC headquarters in Nairobi’s Industrial Area, a man who claimed to be the acting managing director refused to open the warehouses for them. He told the senators that he did not have the keys to the warehouses which were held by Managing Director Pamela Mutua who was arrested together with other top managers on Monday over the edible oil saga.
“Now that we have been taken in circles we will summon suppliers to tell us what they imported. Officials at the Kenya National Trading Corporation are not cooperating,” said committee chairman and Kajiado Senator Lenku ole Seki.

“We support the chairman that suppliers be summoned to also shed light on whether they inflated prices as alleged,” said Kiambu senator Karungo Thang’wa, a member of the committee.

Single-sourced

The committee’s itinerary included a visit of the Wallstreet Businesses Park, ICD Road, Nairobi, Warehouse 6, Wallstreet Businesses Park, ICD Road, Warehouse 13 Nairobi Wallstreet Businesses Park, ICD Road, Warehouse 15 Wallstreet Businesses Park, ICD Road, and Warehouse 24 Wallstreet Businesses Park, ICD Road. Others were Warehouse No3-ICD Road, NFT Auto Ports, Viwandini, Bepak Logistics Ltd warehouse 30, Athi 55 Business Park, Bepak Logistics Ltd whse No.41, Athi 55 Business Park and Atlantis Business ParkD18/D19- ICD Road.

Last week attempts by the senators to inspect the items were thwarted by the arrested MD who told them she had no authority to open the warehouses. In June this year, it emerged that companies owned by people with links to the government were single-sourced to procure edible oils through KNTC.

It all began when KNTC, which falls under the Ministry of Investments, Trade and Industry, got the go-ahead from the Cabinet in October last year.

The Cabinet memo stated: “To address the cost of living, Cabinet approved a framework to position the Kenya National Trading Corporation as the anchor of state initiatives to create a price stabilizer for essentials household food items.”

“KNTC will leverage on its infrastructure and capacity to help stabilize price swings of essential items that are abnormal and against the public interest.” However, a document filed in the National Assembly showed that KNTC single sourced companies contracted to import 125,000 metric tons of edible oil.

Mutua was among senior managers picked up from their offices by the Directorate of Criminal Investigations (DCI) officers. A source at the DCI told People Daily that a Cabinet Secretary will also be recording a statement on the matter next week.

Huge budget

Detectives also grilled managers of a local bank that guaranteed the edible oil deal, which cost the taxpayer Sh9 billion. They were also expected to answer questions on the importation of maize, rice, and sugar early this year which raised questions on the procurement process.

The probe into the edible oil scam is expected to be expanded to other government entities including the Ministry of Investments, Trade and Investments and the Kenya Revenue Authority (KRA). It also made its way to Parliament with MPs questioning tax waiver on the importation of food stuffs worth Sh16.5 billion. Mutua took over the helm of the corporation in 2021.

However, it was not until last year that the corporation was allocated a huge budget to import cooking oil and other food products, a process that commenced in March. And in August, KNTC started distributing cooking oil vending machines in poor neighborhoods. However, questions have been raised over the handling of the importation of edible oils worth Sh9 billion. When he appeared before the Senate former Trade, Investments and Industry CS Moses Kuria told senators that the idea to import the edible oil was mooted to protect Kenyans from cartels. According to him, the intervention to have KNTC import the consignment was arrived at to arrest the ballooning costs of edible oils. “I instructed KNTC to import edible oil with a target that one kilo of edible oil would retail at Sh250… the price of oil has gone down today to Sh218 per litre,” Kuria said. KNTC got the go-ahead to import the consignment through a Cabinet Memo in October last year. “To address the cost of living, Cabinet approved a framework to position the Kenya National Trading Corporation as the anchor of State initiatives to create a price stabilizer for essential household food items,” the Cabinet memo stated in part. “KNTC will leverage on its infrastructure and capacity to help stabilise price swings of essential items that are abnormal and against the public interest.” Shipping containers However, a document filed in the Senate indicated that KNTC single-sourced the companies contracted to import 125,000 metric tonnes of edible oil and set higher prices as opposed to what had been agreed on initially. KNTC awarded Multi-Commerce FCZ a Sh8.12 billion tender to supply vegetable oil and Shehena Company Limited to supply jerricans of edible oil at Sh1.33 billion. KRA used the Kenya Gazette notice number 250 to facilitate the subsequent imports. The National Treasury later issued a circular indicating the quantities of edible oils to be imported. However, three Single Administrative Documents currently with the investigators each have different entries and this discrepancy is expected to inform the investigations expected to commence today. The first document shows the importation of 26,600 20-litre jerricans translating to 20 shipping containers. In the second, the importation of 51,870 20-litre jerricans translates to 39 shipping containers and in the third document, the importation of 6,650 20-litre jerricans translates to five shipping containers, bringing the total to 64 shipping containers of imported cooking oil.