Businessman Jacob Juma was the face of Erad supplies, which he served as managing director.
And his two co-directors were largely unknown until they got a court order attaching the country’s strategic grain reserves.
The late Juma made it known to all and sundry that he was going to auction government property after his company won a case on a breached contract. He died before he could execute the order, leaving his co-directors with the task, which turned out to be a poisoned chalice.
And awaiting sentencing today is Sirisia MP John Koyi Waluke and Ms Grace Sarapay Wakhungu, the co-directors. Their woes started in August 2004 when Erad Supplies and General Contractors Ltd was awarded a Sh778 million tender to supply 40,000 tonnes of maize.
Erad was one of the five companies the National Cereals and Produce Board (NCPB) contracted to supply 180,000 tonnes so that the country could meet its needs at the time.
Erad supplies was to be paid Sh19,465 per tonne on condition that it would provide a performance bond of 10 per cent of the quantity.
However, the firm failed to deliver the maize, which it claimed would have been imported from Ethiopia, leading to termination of the contract despite being paid at least Sh300 million.
Erad challenged the matter in court and an arbitrator was appointed.
The arbitrator awarded Sh564 million to Erad for breach of the contract, but the NCPB contested the decision at the High Court.
Erad then went to court and obtained orders to sell NCPB’s assets to recover a total of Sh564 million, yet it did not supply a single grain of maize.
The matter was brought before the Public Investments Committee (PIC) of the National Assembly in 2013.
The committee launched investigations immediately. Interestingly, Mr Waluke was among the members of PIC, then chaired by Eldas MP Adan Keynan.
During the committee’s hearings and as required by National Assembly Standing Orders, Mr Waluke was excused from the committee’s sittings.
“We are now set to enforce a court decree to dispose of NCPB’s assets arising from the breach of a maize supply contract,” Juma then told PIC.
At the time, the order put at risk Kenya’s strategic food reserve that held about 2.2 million bags of maize valued at Sh6.6 billion.
The PIC was told that the matter had been heard by nine judges who threw out NCPB’s case and upheld its claim for storage charges and loss of revenue anticipated from the maize supply.
The committee members questioned the morality of attaching property of a key food security institution when no grain had been supplied.
In its report that was adopted by the National Assembly, the PIC established that the NCPB management had awarded the tender to Erad without consulting the Attorney-General, in a move that smacked of connivance among the parastatal staff, Erad and some individuals in the Judiciary.
This is because no due diligence, technical and financial evaluation had been conducted to ascertain whether the company had the capacity to supply the maize.
It turned out to be a choreographed scheme to loot public funds, according to PIC.
In its recommendations, the committee barred Mr Waluke and other Erad directors from doing any business in the country and within the East African Community.
The committee also recommended that Mr Waluke and his co-directors be prosecuted.
As the committee made the recommendations, it prevailed on the executive to begin the recovery proceedings against the company and its directors so as to recover the money already paid out to them.
The committee further recommended that no more money should be paid to the firm.
The committee also directed the Ethics and Anti- Corruption Commission (EACC) to undertake an in-depth investigation of the firm’s dealings.
The EACC investigated the matter and in 2018, Mr Waluke and Ms Wakhungu were charged in court over fraud among other charges after Juma’s death in May 2016.
In all the instances, the late Juma appeared to be the one running the affairs of Erad as Mr Waluke and Ms Wakhungu portrayed a figure of strangers in Jerusalem.
On June 22, 2020, the court found Mr Waluke and Ms Wakhungu guilty of the offense. The two are expected to be sentenced on Thursday this week.
However, their conviction did not come without a fight. Early this month they lost a petition seeking the quashing of the PIC report that recommended their prosecution, for fraudulently receiving more than Sh300 million from NCPB. Justice Mumbi Ngugi said Mr Waluke was an MP and a member of PIC when the matter was debated by committee.
She said the MP was given the opportunity to testify before the committee and he was in parliament when the report was adopted, yet he did not challenge it, until five years later.