ANGLO LEASING: THE REAL STORY

Written By Michael Maunda on Saturday, November 8, 2014 | 11:34 PM



Anglo Leasing’ is a generic term which refers to 20 irregular national security sector contracts awarded by the Kenyan Government for acquisition of ‘security related’ goods and services. In 2006, the Auditor General told Parliament that the total value of the scam was Ksh56 billion (USD 777 million).

Initiated in 1997, the contracts were two-pronged: a contract for supply or installation of security equipment or accessories; with a simultaneous financing contract by which the Government ‘borrowed’ funds sourced by the suppliers to pay for the goods being bought under the first contract. Because the contracts involved external credit, parliamentary authority should have been obtained, but this was circumvented on the grounds of national security secrecy.

BENEFICIARY?: Naivasha maximum securuty prison. The Kenya Prisons Security and Telecommunications Project is on the long list of Anglo Leasing Security Related Contracts.
BENEFICIARY?: Naivasha maximum securuty prison
When the details of the contracts were made public by an opposition Member of Parliament in 2004, it was quickly discovered that the various suppliers and financiers were really inter-related parties traceable to Deepak Kamani and Anura Perera, both businessmen with strong political links. The credit finance agreements were found to be fraudulent by the Auditor General and two Parliamentary investigations; in 2004 and 2006. No credit was received by Kenya under any of the credit agreements, yet Kenya continues up to this day to repay purported Anglo Leasing debts.

In May 2014, Kenya paid off two claims to the tune of Ksh 1.43 billion (US$16.8 million) to First Mercantile Securities Corporation and Universal Satspace Corporation which had managed to obtain judgement on the Anglo Leasing promissory notes in London and Geneva. Within days another claimant Ciara Systems was reported to have lodged its own demand. During the last years of the Grand Coalition Government other out of court settlements paid outstanding balances of contracts with the suppliers and financiers of a Navy ship and a defence command centre.

All Anglo Leasing contracts shared certain features. All were awarded to ghost companies, that could not be traced to where they claimed to be incorporated via conventional searches; further the Government officials they dealt with all denied knowledge of who the principals or agents of the companies were. The preferred security procurement method (single-sourcing) was exploited in all the contracts to circumvent procurement procedures and remove competition, publicity of the tender and other legal requirements.
The contracts were grossly overpriced., and the credit finance did not materialise even though Kenya issued irrevocable promissory notes binding the country to repay the fictitious debts in full. Each contract was given additional consideration by a legal opinion from the Attorney General declaring that the contracts were in conformity with all legal requirements and bound Kenya to pay.

These legal opinions prejudiced Kenya’s defence of legal claims filed against her by suppliers and contractors in foreign courts. Despite overwhelming evidence that Kenya was defrauded, our collective legal interests have been compromised by impunity. Significant individuals in Kenya’s political elite under 3 Governments are too implicated either as beneficiaries of the scandal or because they were involved in the cover-up. The Anti Corruption Commission has been investigating this scandal since 2004 with no successful prosecution of the main players who are actually well known. The Anti Corruption Commission is hamstrung because there is no political will to unravel those behind the scandal and even less appetite for the political sacrifices that would have to be made to enforce culpability against those who committed Kenya and those behind the companies that received Anglo Leasing payments.

Ten years after the Anglo Leasing scandal was first exposed no serious domestic effort has been made to halt the contracts and payments, nor to defend the country against lawsuits by creditors holding the Anglo Leasing debts; neither to punish the Government officials who entered into the contracts. Despite the domestic log-jam, there is a glimmer of hope that there may yet be accountability for the Anglo Leasing fraud. Some foreign authorities have approached the Kenyan Government seeking Mutual Legal Assistance (provided for under the United Nations Convention Against Corruption) with a view to obtaining evidence to support prosecutions against entities within their jurisdiction connected to the Anglo Leasing scandal.

On 30 October 2014, in the case of Chamanlal Kamani, Deepak Kamani & Rashmi Kamani v Attorney General, Justice Lenaola of the Constitutional Court dismissed an attempt by 3 suspects facing prosecution in Switzerland who wanted the court to block the Attorney General from supplying Swiss authorities with information on the scandal ; which the Swiss want to use to mount prosecutions against Swiss based persons and corporations. Until Kenyan footdragging ended prospects of Mutual Legal Assistance in 2009, the UK Serious Fraud Office said it was investigating several UK entities that received funds from the Government of Kenya and were signatories to Anglo Leasing type contracts.

The Serious Fraud Office Director at the time said that he would consider reopening the investigation if evidence was received from Kenya in the future. Now that the Ethics and Anti Corruption Commission and the Attorney General have given Mutual Legal Assistance to the Swiss authorities and handed over detailed evidence dockets, it is hoped the same would apply to the UK investigation, which had already obtained evidence from France, Spain and Switzerland.

In May 2014, President Kenyatta, in order to salvage Kenya’s US$2 billion Sovereign Bond offering, ordered payment; he did say though that other avenues for accountability were still to be pursued against the well known Anglo Leasing suspects. This is what Kenyans want action on. Below is a table indicating the details of the Anglo Leasing contracts and those involved:.



BENEFICIARY?: Naivasha maximum securuty prison. The Kenya Prisons Security and Telecommunications Project is on the long list of Anglo Leasing Security Related Contracts.
BENEFICIARY?: Naivasha maximum securuty prison. The Kenya Prisons Security and Telecommunications Project is on the long list of Anglo Leasing Security Related Contracts.
PRIME SUSPECT: Deepak Kamani. In the case of Chamanlal Kamani, Deepak Kamani & Rashmi Kamani v Attorney General, Justice Lenaola of the Constitutional Court dismissed an attempt by three suspects facing prosecution in Switzerland.
PRIME SUSPECT: Deepak Kamani. In the case of Chamanlal Kamani, Deepak Kamani & Rashmi Kamani v Attorney General, Justice Lenaola of the Constitutional Court dismissed an attempt by three suspects facing prosecution in Switzerland.
STORIED WHISTLE-BLOWER: John Githongo. For his role in exposing the Anglo-leasing scandal from right within the Kibaki political establishment, the former PS Ethics and Governance had to flee into exile in the UK to escape the threat of assasination.
STORIED WHISTLE-BLOWER: John Githongo. For his role in exposing the Anglo-leasing scandal from right within the Kibaki political establishment, the former PS Ethics and Governance had to flee into exile in the UK to escape the threat of assasination.
KEY PLAYERS IN THE CURRENT INTERNATIONAL DRAMA:Attorney-General Githu Muigai
KEY PLAYERS IN THE CURRENT INTERNATIONAL DRAMA:Attorney-General Githu Muigai
KEY PLAYERS IN THE CURRENT INTERNATIONAL DRAMA:Swiss ambassador Jacques Pitteloud
KEY PLAYERS IN THE CURRENT INTERNATIONAL DRAMA:Swiss ambassador Jacques Pitteloud
KEY PLAYERS IN THE CURRENT INTERNATIONAL DRAMA:Cabinet Secretary for the Treasury Henry Rotich
KEY PLAYERS IN THE CURRENT INTERNATIONAL DRAMA:Cabinet Secretary for the Treasury Henry Rotich