Search for Eurobond answers take Auditor General to London, NY

May 18, 2016
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Auditor General Edward Ouko told the Parliamentary Public Accounts Committee that he expects to submit the report in mid July after his officers' travel aboard in June/FILE
Auditor General Edward Ouko told the Parliamentary Public Accounts Committee that he expects to submit the report in mid July after his officers’ travel aboard in June/FILE

, NAIROBI, Kenya, May 18 – The scope of investigation of the Auditor General’s special audit into the controversy surrounding the Sh250 billion ($2.8 billion) Eurobond proceeds shifts to London and New York where officers are expected to meet international financial institutions which handled floating of the international sovereign bond.

Auditor General Edward Ouko told the Parliamentary Public Accounts Committee that he expects to submit the report in mid July after his officers’ travel aboard in June to meet officials from the six banks to peruse the transactions documents.

Overview
  • Statements released by the CBK shows two withdraws of an initial $2 billion raised were made. The first $395,439,262.5 was received on July 3, 2014, the same day Kenya retired its syndicated loan. A final payment of $999,018,457.6 was received on Sept. 8, 2014. It included $245,957.27 in interest and after $225,262.67 was paid in charges.
  • Kenya received a further $815,436,932 from tap sales in December 2014.
  • The bank said it provided evidence requested by investigating agencies.

The head of the national audit office said he is yet to fully track how the proceeds from Kenya’s first international sovereign bond transferred from banks in Europe until it was deposited at the Central Bank of Kenya (CBK).

“We have been given appointments now to go and see JP Morgan, Federal Reserve, City Transactions Services-New York, JP Services, Barclays Bank, ICB Standard Bank and Qatar National Bank. Irrespective of the information we have here, we need to go there and see them and give them all the records and we sort out all the issues whilst there,” Ouko explained.

Ouko said his office is yet to finish auditing all documents provided by ministries on how the proceeds were utilised after Treasury Cabinet Secretary Henry Rotich said some of the cash was disbursed to them.

“The first pillar we are looking into is the issue of rising of the money and the financing side. The other pillar is that of expenditure and appropriations and then the third pillar is the movement of the funds by the CBK and National Treasury. Our approach is that we need to go back to the people wherever they are to tell them to give us details of any transactions which were dealt with during the year,” he said.

MPs in the House watchdog committee urged the Auditor-General to fast track the probe because it is increasingly looking like his office is being used to take away public attention.

“We as the elected representative of the people are now being accused of not handling this matter with seriousness to the extent that we are facing accusations of being accomplices. I thought you had an independent way of handling this matter, so that you do it as fast as possible in order for all parties to come clear, especially the government. We are almost thinking that this government is sitting on you so that you don’t bring out this report,” said Timothy Bosire (Kitutu Masaba).

“Two weeks ago, Mr Auditor General we lost our good friend, Jacob Juma, and the politicians have been going out there saying that he was killed because of the information he had on the Eurobond. But if at all you can be able to come out and clear this matter then the issues of the death of Juma can be cleared,” Kareke Mbiuki (Maara) said in his contribution.

“Apart from the lack of resources, to be able to effectively carry out your audit are you facing any other constraints like obstructive behaviour?” posed Eseli Simiyu (Tongeren).

The Public Accounts Committee last year directed the Auditor-General to conduct a forensic audit on the use of Eurobond proceeds following allegations by Opposition leaders that the government could not account for Sh140 billion.

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