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04.03.2015 Kenya

Kenya charges seven former officials over graft scandal

By AFP
Former Kenya's finance minister David Mwiraria speaks during presentation of the budget in Nairobi on June 12, 2003.  By Simon Maina AFPFileFormer Kenya's finance minister David Mwiraria speaks during presentation of the budget in Nairobi on June 12, 2003. By Simon Maina (AFP/File)
04.03.2015 LISTEN

Nairobi (AFP) - A court in Kenya on Wednesday charged seven former officials including an ex-minister in connection with a multi-million dollar corruption scam involving bogus state contracts.

The case relates to a murky and highly complex scandal that came to light in 2004 when it emerged the government had set up a vast network of phantom companies and inflated invoices to embezzle money meant for security services.

Known as the "Anglo-Leasing scandal", after a British firm that was hired at hugely inflated costs to provide a new passport printing system, the overall money involved in the scandal has been estimated at at least $640 million (580 million euros) spread across 18 different contracts.

Former finance minister and now Senator Chris Obure was charged with abuse of office, breach of trust and "improperly conferring a benefit", as were three former permanent secretaries, a former postmaster general, a former finance secretary and an ex-finance ministry official in charge of debt management.

According to the charge sheet, the former officials -- who all deny involvement and were released on bail -- "initiated procurement of... products without following the laid-down procurement procedures, an arbitrary act prejudicial to the rights of the Government of Kenya."

Obure's successor as finance minister, David Mwiraria, is also set to be charged but was not in court due to ill health, his lawyer said. Three businessmen are also facing charges, while arrest warrants have also been issued for two foreign businessmen.

At least $200 million was reportedly paid out before the scandal was made public. Prosecutors allege the scam began in the 1990's when Daniel arap Moi was president, and continued until it was exposed under the presidency of Mwai Kibaki.

The contracts, many for services that were never delivered, were supposed to purchase a new passport printing system, ships for the Kenyan navy, security vehicles and forensic laboratories.

It remains unclear how much of the money went to legitimate companies and how much was embezzled, and the Kenyan government remains indebted to several companies with which it had signed contracts.

Last year the government made fresh payments of almost $16 million following demands from European courts, partly to clear the way for Kenya to float international sovereign bonds which it hopes will boost its economy.

Authorities in Switzerland, where some of the money was reportedly laundered, have been assisting Kenya with the probe.

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