Lawyers Cecil Miller and Jinaro Kibet at the Goldenberg Commission of Inquiry
THE Office of former Vice-President and Minister for Finance paid over Sh 17.7 billion irregularly from the Government’s Account D-7 to two commercial banks, Pan African Bank Limited (PAB) and Exchange .Bank Limited (EBL) all in liquidation, the Bosire Commission heard yesterday.
The billions were paid out by former Permanent Secretary Ministry of Finance Dr Wilfred Karuga Koinange and the Ministry’s Financial Secretary Donald Kimutai when Education Minister Professor George Saitoti was the Vice-President and Finance Minister. Documents regarding these payments cannot be traced and may have been destroyed, it was revealed. The billions which ended up in the two collapsed hanks was pocketed by Panther Investment Limited (PIL) owned by businessman Karnlesh Pattni and Philip Moi among other companies, it was revealed.
Mr Moi later resigned as Director of PIL. The documents withdrawing these billions from Treasury were signed by former Permanent Secretary Ministry of Finance Dr Wilfred Karuga Koinange and Mr Donald Kimutai, then the Ministry’s Accounting Secretary. Dr Koinange and Kimutai were making Sh700 million a month, Every fortnight, they used to credit EBI, and PAB with Sh 350 million.
A retired Central Bank of Kenya Francis Waliaula Wanyera Lukorito told Commission Chairman Justice Samuel Bosire that documents related to these payments were destroyed. Lukorito, who was the officer implementing the Pre-Export Finance Scheme and the Open Markets Operations (OMO) jointly with an official seconded to Central Bank of Kenya (CBK) David Meader, said the payment of these billions of shillings by the Government for unexplained reasons ill raised serious questions. Lokorito said as a result, serious enemity developed between him and former Deputy Governor and long-serving Chief Banking Manager Eliphaz Riungu. He revealed that Riungu had branded him a “saboteur” who was out to frustrate the development of the export scheme introduced by the Government and which was being funded by CBK through local Commercial Banks (CB’s).
Riungu, the Commission, heard threatened to “organize through the underworld the deportation of Meader. Meader had been seconded to CBK by the international Monetary Fund (IMF) to develop the OMO policy which was aimed at making the mother the last result lender and not a first lender as it was. Lokorito said due to his persistence in controlling the amount of cash in the market and the printing of excess money by CBK, he was regarded as a “trouble shooter” by Riungu. Lokorito, the 42 commission witness, said Riungu used to get agitated over these disturbing questions raised by him by Meader over billions of shillings advanced to Goldenberg Inter-national Limited (GIL) through shaky commercial banks.
Lokorito said as a result of his stance in ensuring the laws were followed and payments from CBK be made in accordance with the procedures, he was arrested through a plot hatched by Riungu, the bank’s Secretary J K Waiguru and the Chief Security Officer Mr Karanja who was a police officer seconded to CBK. He revealed that no reason was given for his arrest except that he was told he was spreading rumors. He also said he was not told which rumors. Justice Bosire sitting with Senior Counsel Nzamba Kitonga and Peter Le Pelley directed that the police officers who arrested Lokori to be served with adverse notice and appear before the commission today. Justice Bosire said it is wrong for police to arrest some-body just like that. Lead assisting counsel John Khaminwa undertook to ensure the officers who picked up and detained Lokorito in a cell are before the commission today.
