Cabinet minister Amos Kimunya and Central Bank of Kenya governor Njuguna Ndung'u are unfit to hold office, a parliamentary committee has concluded.
The two should also be investigated for their role in the Sh1.8 billion lost over the money printing contract signed between the CBK and the De La Rue Currency and Security Print Ltd.
The Public Accounts Committee which is chaired by Ikolomani MP Bonny Khalwale also recommended that the Ethics and Anti-Corruption Commission investigate Kimunya and Ndung'u and recommend the appropriate legal action which should be taken against the two and which can lead to the recovery of the lost funds. "The Committee finds that the two acted contrary to provisions of Chapter 6 of the Constitution of Kenya, the Public Officer Ethics Act and the Public Procurement and Disposal Act and in that respect and for this reason, they are not fit to hold public office," the PAC said in its report.
Kimunya-currently the Transport minister- is accused of canceling a 10 year money printing contract CBK had with De La Rue and instead canvassed for short term contracts. He did this when he served in the Finance docket. Njuguna is accused of failing to resist Kimunya's pressure and allowing the contract, which was cheaper, to be cancelled and replaced with the short term contracts through which the country lost the Sh1.8 bn.
"Evidence received by way of own admission indicates that Hon. Amos Kimunya, then Minister for Finance was the architect of the joint venture deal between the Government of Kenya and De La Rue," the committee says. Kimunya was the Minister of Finance from February 2006 to July 2008, when he resigned to pave way for the investigations into the sale of the Grand Regency Hotel, now Laico Hotel. His resignation in 2008 came barely an hour before Parliament passed a motion of no confidence against him over sale of Grand Regency. He was later reappointed back to the Cabinet.
In the report tabled by Khalwale yesterday, MPs have pinned Kimunya down for the letter he wrote to former CBK acting Governor Jacinta Mwatela instructing her to suspend the long term contract be suspended. Mwatela controversially exited the institution in March 2007 when Ndung'u was appointed as the governor. "Kimunya directed Central Bank of Kenya to cancel a cheaper contract with De La Rue even when his Ministry was not party to the contract and all the reasons he gave for the cancellation of the contract were invalid," the PAC report says.
It says that Njuguna failed to make any effort to resist the cancellation orders by Kimunya. In doing so, Njuguna is accused of failing to protect the CBK's and taxpayers' interest. It is not clear why the committee made this finding as was not the CBK governor at the time the letter was written. "The appointment of Prof. Njuguna Ndung'u as Governor of Central Bank of Kenya should be terminated and towards this end, the President should appoint a tribunal," the committee says. It also recommends that Njuguna "must step aside from the Office with immediate effect."
This is the second time a parliamentary committee is recommending that the President to appoint a tribunal to investigate Njuguna's conduct. In March this year, MPs ganged up and expunged Njuguna's name from the Parliamentary Select Committee report on depreciation of the Shilling which had recommended that President Kibaki initiate the process of replacing Njuguna.
PAC has said through a competitive procurement process, a tender for printing, 1.71 billion pieces of banknotes had been awarded to De La Rue Company at a cost of Sh3.7 billion. A contract to that effect was signed on May, 2006 for printing new generation banknotes, smaller in size and with advanced security features. PAC says the contract was later cancelled on Kimunya's directive with CBK reverting to procuring banknotes from De La Rue on interim orders without subjecting them to a competitive procurement process. The committee has said this is contrary to government procurement regulations and procedures. MPs are now expected to debate the report and decide on whether to endorse it or remove names of those indicted.