Senators on Wednesday were seeking to unravel the puzzle of a four-week-old firm that was awarded a Sh1 billion tender for the supply of PPE to Kemsa.
Shop ‘N’ Buy, a firm registered on February 14, was awarded the tender a day after its sole director, James Cheluley, sought to supply the agency.
Cheluley told the Senate Health Committee that he had not done any business with Kemsa before and only learned that the agency needed the items through other firms his Shop ‘N’ Buy’ company had been supplying.
He said after learning from the companies that Kemsa was in need of emergency Covid-19 items, he wrote a letter of intent on April 29 and was issued with a committed letter the following day.
Without price negotiations or signing of any contract, Cheluley supplied the items – masks and other personal protective equipment – worth Sh970 million. The company has neither signed a contract nor been paid to date.
“Can you walk us through how you did it, registered a company and in less than a month you supplied goods worth millions of shillings because we have millions of young Kenyans who will register their company today and it will take them at least 10 years to win any tender or supply anything to any company,” Narok Senator Ledama Ole Kina said.
Ledama and Kisumu Senator Fred Outa sought to know the magic Cheluley used to win such a big contract and how he was able to raise such a huge amount of capital to supply the items to Kemsa.
“You can tell us, did you have any political connections or linkages with Kemsa bosses for you to be able to supply goods of such quantities?” Ole Kina asked.
“We have to understand this magic. For you to provide goods worth a billion, you have shown a history of being capable, even for any bank to loan you or you had all these amounts in cash.”
Cheluley said there was no magic in how his firm won such a tender and raised the capital. He said he has been in business for more than 20 years and has built trust with his Chinese supplier.
“There is no magic. I have suppliers who are still waiting for their money from China. What we did is that with the little resources we had between me and other partnering companies, we made a deposit to our supplies in China, who trusted us,” he explained.
“In fact, we showed them a commitment letter from Kemsa, which acted as our bond. This enabled us to get the goods.”
Shop ‘N’ Buy is among 50 companies of interest that the Ethics and Anti-Corruption Commission is said to be targeting in its probe into the questionable and hurried procurement at Kemsa.
However, committee members reprimanded Cheluley, accusing him of taking them round in circles and ‘hiding something from us’.
“The director is really amusing us. The company was registered on February 14, 2020, then it is ready to supply goods worth billions of shillings in less than one month. Is that legal in Kenya?” Outa posed.
“Where did you get the money to supply these goods? Which bank gave you the money?”
Cheluley said that the Kemsa commitment letter had assisted his firm get the goods from abroad – China. He reckoned that there was no time limit for any company to exist before it starts doing business.
“We cannot say that a company should exist for in stance 20 or 30 years to start doing business. We have such companies that have never supplied anything, it should be the other way round,” he said.