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THE CITY COUNCIL OF NAIROBI, FORMER TOWN CLERK PHILIP KISIA AND THE SH5 BILLION ‘LOAN’ FROM EQUITY BANK

Philip Kisia – former City Council of Nairobi Town Clerk

Mr Philip Kisia, formerly the town clerk for the City Council of Nairobi (NCC) has been speaking of his desire to become the Orange Democratic Movement’s (ODM) candidate as the first governor of the County of Nairobi and of the great qualities he possesses that fit him for such an honour. He has also been talking to a House committee investigating the mystery surrounding a Sh5 billion loan (or was it an overdraft?) from Equity Bank. In neither instance was he convincing.

PHILIP KISIA: ODM CANDIDATE FOR GOVERNOR?

It was twelve days ago that Philip Kisia presented his application to the ODM National Election Board at the Orange House in Nairobi to be the party’s candidate for Governor of Nairobi and then, as he so likes to do, addressed the media.

Mr Kisia’s key point was that the ODM should ensure that all seats in Nairobi were distributed evenly and fairly to guarantee a ‘national outlook’ and that by endorsing his candidature the Western region would be represented. (What a change that would be, an ODM candidate from the Western region.)

“We need a party that embraces everybody”, said Kisia, “a party that is inclusive” he continued, “and we need people who believe in inclusivity and not just politics of propaganda and money”, he declared.

Of course by embracing everybody, Mr Kisia meant him and by “inclusivity” he meant including Philip Kisia. As for the “politics of propaganda” is this not the same Mr Philip Kisia who as Nairobi Town Clerk would arrive unannounced, television cameras in tow, to berate some local entity or another? We will come on to the “money” in a moment.

MR PHILIP KISIA AND THE WISDOM OF SOLOMON

Perhaps the Kenya Forum is being unfair. Standing on the steps of the Orange House, as it were, Mr Kisia held forth on why he was the man to be the first Governor of Nairobi County.

It was his experience as Town Clerk and the Nairobi Central Business District Association (NCBDA) chairman you see, that makes Mr Kisia ideally suited to step up to county level. As The Standard reported, the ‘former Town Clerk said he was the best candidate to represent Nairobi because he knows what ails the city’.

Well that’s true, Philip Kisia certainly knows what ails Nairobi, after all, he was in some measure in charge of the ailing from May 2009 until June 2012, during which time it was found that the City Council was a ‘den of corruption’, employed thousands of ‘ghost workers’, and that 92 per cent of the workers it did employ were not up to the job.

“Philip Kisia, son of Mama Grace, brings wisdom from God and King Solomon. My opponents lack wisdom. They are not humble”, said the aspiring governor of himself.

The Kenya Forum hadn’t exactly seen Philip Kisia as a man endowed with the ‘Wisdom of Solomon’ but there we are. As for the “humble” Mr Kisia the Forum sees him more as a self-made man who worships at the throne of his maker.

HOUSE COMMITTEE INVESTIGATES SH5 BILLION LOAN

Barely five days after his Orange House declarations, Philip Kisia was up in from of a House committee which is trying to resolve the mystery surrounding a Sh5 billion loan (yes, you did read that right, five billion shillings, that’s five thousand million shillings) that Nairobi City Hall had taken out with Equity Bank. Who agreed the loan, the committee wanted to know? Why? What happened to the money exactly? And where has the paperwork gone to?

INTEREST RATE ROSE FROM 10 TO 24 PER CENT

House committee’s vice-chairman, Benjamin Langat - “We want to know why this deal was rushed at supersonic speed”.

Was it a loan or an overdraft? That was another question. Council officials admitted that no money had been credited to the local authority’s accounts. Philip Kisia says it was a loan, whereas his successor as Town Clerk, and other ‘top council officials’ told the House committee that it was an overdraft. So perhaps no loan but rather a more expensive Sh5 billion overdraft.

The council was originally to repay the debt to Equity Bank at 10 per cent interest but thereafter, it has been revealed, the interest rate charged by Equity Bank was varied ‘without resolution or approval by the council’, rising to 12 per cent and then to 24 per cent!

Today The Business Daily reports that the Co-Operative Bank had offered the loan at 8.5 per cent and that when the loan was subsequently taken out with Equity Bank, existing City Hall bank accounts were transferred to Equity Bank.

SH294 MILLION TO UNAPPROVED CREDITORS

The City Council passed a resolution for the loan in March, 2011, whereupon Sh2.3 billion was paid into the Local Authority Pension Fund to cover ‘outstanding remittances, Sh50 million was paid to Equity Bank as a ‘loan processing fee’, and Sh294 million was paid to creditors who it transpired were not on the approved list.

The House committee’s vice-chairman, Benjamin Langat, said; “We want to know why this deal was rushed at supersonic speed”.

Permanent Secretary at the Ministry of Local Government, Karega Mutahi told the committee he was shocked that the council had gone for an overdraft instead of an approved loan. He called on anyone found to have misappropriated the funds to be prosecuted under Article 226 (5) of the Constitution.

UNAUTHORISED JUNIOR OFFICERS

Permanent Secretary, Ministry of Local Government, Karega Mutahi - anyone found to have misappropriated funds should be prosecuted under Article 226 (5)

The committee also heard that ‘unauthorised junior officers’ were used to commit the City Council to the loan ‘on instructions from Mr Kisia on the basis of a letter of offer from the bank instead of a legal contract’, the council’s director of legal services, Aduma Owuor, told the committee.

The City Council’s treasurer also told the House Committee he was not involved in the payments of creditors who had not been approved, as they should have been, by the Ministry of Local Government.

ACTED ILLEGALLY?

To cut a long story short, the loan or overdraft was taken out to without following proper procedures: the process wasn’t properly advertised as it should have been; the loan had not been agreed by the relevant ministry as it should have been; junior officials agreed and actioned the loan; the loan agreement that was supposed to be kept at City Hall has gone missing; and of course, the loan or overdraft cost far more than it should have done.

If the claims by the City Council’s heads of department and others are proved to be true, then allegedly, as the Business Daily’s reporter Edwin Mutai put it, ‘Mr Kisia, who is aspiring to be governor of Nairobi County, acted illegally.

ODM director of elections, Mr Joseph Misoi, please note.

Some related Kenya Forum postings:

Spooky but True…..(the Ghost Workers of NCC), 9 Nov. 2010

NAIROBI CITY COUNCIL (NCC): HIGH TIME TO CLEAN OUT THE ‘DEN OF CORRUPTION’, 26 Jan. 2012

NAIROBI CITY COUNCIL AND THE PRICEWATERHOUSECOOPERS REPORT (PART 1): OVERSTAFFED AND INCOMPETENT, 16 April, 2012

NAIROBI CITY COUNCIL AND THE PRICEWATERHOUSECOOPERS REPORT (PART 2): CORRUPTION, NEPOTISM AND POLITICAL AMBITION, 16 April, 2012

The late Christabel talks about Dr Ouko’s return from Washington.

Sam Okello talking about Mrs Ouko

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