Suspicious transactions by one of the companies awarded multibillion-shilling tenders to supply subsidised fertiliser have sparked alarm among financial sector regulators, Nation has learnt.
Mashambani Farm Inputs Eldoret Ltd was awarded a Sh10.2 billion tender to supply fertiliser to the Kenya National Trading Corporation (KNTC), but regulators have since raised questions over the cash movements and documents presented to support some of the out-sized transactions.
From large and unexplained cash withdrawals after payments from KNTC to seemingly altered documents supporting big money transactions, the firm has caught the eye of agencies tasked with blocking the movement of illicit funds.
Sources at two financial sector regulators, who sought anonymity, separately told Nation the firm’s bank accounts were being monitored.
Our sources requested to remain anonymous as they are not allowed to speak to the press without express authority from the institutions’ top brass.
The Financial Reporting Centre, the agency that tracks illicit money, and the Central Bank of Kenya, which regulates the banking sector, are combing through the firm’s activities over the past three months.
The monitoring of the accounts is intended to confirm whether State officials colluded with the company’s directors to embezzle billions of taxpayers’ funds through the fertiliser subsidy programme.
President William Ruto initiated the subsidy programme as a long-term solution to fluctuating food prices that have dealt a financial blow to millions of households following one of the country’s worst drought spells in recent history, coupled with global challenges like the Russia-Ukraine war.
Kenya has over the years imported food produce such as wheat and agricultural inputs like fertilisers from the two warring countries. Their conflict has contributed to sharp increases in food prices. Mashambani Farm Inputs in January signed a contract with KNTC that will see it supply 112,700 metric tonnes of various fertilisers. KNTC is already selling some of the products to Kenyan farmers at subsidised prices.
The contract, a copy of which Nation has obtained, states that Mashambani will supply 20,200 tonnes of MiCrop planting (NPK blend), 24,500 tonnes of MiCrop top-dress and 68,000 tonnes of CAN. All three fertiliser types must be sourced from Yara, a Norwegian company listed on the Oslo Stock Exchange.
Yara had initially bagged a contract to supply KNTC with 112,700 tonnes of various fertilisers, but it has seemingly subcontracted Mashambani to do the job on its behalf.
Documents the KNTC filed at the National Assembly in preparation for the 2023/24 financial year revealed that the State corporation had contracted Yara to supply it with the agricultural input.
Another firm, ETG, also has a contract with KNTC for the supply of 130,000 tonnes of various fertiliser types. But Mashambani confirmed to Nation that it was subcontracted to supply Yara products to KNTC.
Barely three weeks after the contract was signed, Mashambani received part payment from KNTC. Shortly afterwards, the firm sent over Sh320 million to an individual identified as Mr Alfred Rono.
Anomaly
In declaration forms for the funds’ transfer, Mashambani claimed the money was for the purchase of packaging bags. This is an anomaly, as the fertiliser comes already packaged. Going by the math in the declaration form, Mashambani may spend over Sh2 billion on packaging bags for the duration of its supply deal, raising questions as to why such a huge amount would be used on a redundant item.
Source: africa