NAIROBI, Kenya, May 2 – The Non Governmental Organisation (NGO) Coordination Board has suspended the operations of Kalonzo Musyoka Foundation with immediate effect over unaccounted Sh146 million donor funds.
In the letter dated May 2, the Board’s Executive Director Fazul Mahamed dissolved the entire Board of Directors of the Foundation and ordered the fund accounts frozen.
“The Central Bank of Kenya is advised to preserve all funds held at I&M Bank and/or in any other bank in Kenya under the name Kalonzo Musyoka Foundation until further communication from this office.”
“The Investment &Mortgages (I&M) Bank is further directed that all the officials of the Foundation are not allowed to transact for and on behalf of the Kalonzo Musyoka Foundation in any of their accounts until advised by this office,” Mahamed stated in the letter.
The Financial Reporting Centre has also been requested to assist the board in investigating the Foundation’s involvement in money laundering and diversion of the donor aid.
Mahamed claims the Foundation has been submitting false returns to NGO Board.
“In view of the foregoing, the Board finds that there is sufficient cause to warrant forensic investigations into the affairs of the Kalonzo Musyoka Foundation on possible cases of money laundering and diversion of donor aid. Subsequently, the Board has already initiated a legal process of ascertaining the level of criminal culpability of the directors of the foundation with respect to their fiduciary responsibility to the Laws of Kenya, the intended beneficiaries and the People of Kenya,” he said.
Kalonzo who is the running mate under the National Super Alliance (NASA) is the Trustee and Patron of the Foundation while his wife Pauline is listed as the Trustee and Chairperson. The third official is named as Martha Mulwa— the Treasurer.
But the Board claims the ‘Foundation Bank Accounts are operated by total strangers contrary to the provisions of the enabling Kenyan charity law and existing financial regulations.’
Mahamed, is for instance questioning how the Foundation used Sh50,000,000 from The China Youth Development Foundation for the construction of classrooms in Ukambani .
“However, these funds are not traceable in the Foundation Bank Accounts, annual returns, audited accounts of the Foundation’s bank statements availed to the Board for review,” read the NGO Board statement.
Mahamed had in March this year, written to the Foundation demanding it discloses within 14 days the source of funds into the account and projects they were intended for.
In a letter dated March 1, the Board threatened unspecified legal action against the Foundation if it fails to comply within the next two weeks.
Specifically, the Board is accusing the Foundation of “receiving donations both in cash and in kind from foreign donors” whose identities are not revealed in its Audited Accounts.