14 February 2014

Kenya: Two Kenyans Are Directors of China Rail Company

IT has now emerged that a Kenyan firm has the same name as the firm that won the Sh447 billion tender for the Mombasa- Nairobi standard gauge railway upgrade.

Yesterday the Public Investments Committee was told that two Kenyans registered a company called China Roads and Bridges Corporation Kenya Limited in 2008.

The Registrar of Companies Bernice Gachegu yesterday told the committee that Peter Maingi Gatere and Leonard Mwangi Ndungu were registered as the directors of the company at her office.

The firm's office is in Mpaka Road in the Westlands area of Nairobi. Yesterday a Star reporter walked up and down Mpaka Road but could find their office. The Star could not find out where Gatere and Ndungu work and what they do.

A Chinese company was registered 30 years ago as China Roads and Bridges Engineering but changed its name to China Roads and Bridges Corporation in 1996.

The Beijing based firm in 1984 stated its directors as Pan Qi, Wang Zhi, Wang Jinqian, Zhang Yaping, Lin Cen, Liu Yugeng, Zheng Renzhou, Yan Guangzhen Dong Ning and Sun Xiaozhong. Neither the Kenyan company nor the Chinese company have been filing their annual returns as required by law.

The Kenyan firm was registered in 2008 when the idea of a modern railway was first being mooted. "This may be the company that is dealing with the government to deliver the rail project. The fact that the government is adamant that the project must be done raises serious issues because the government may not know who it is dealing with," said Igembe South MP Mithika Linturi. Committee members claimed that it was not an error but a deliberate inside job.

The Chinese firm was registered on December 12, 1984, Jamhuri Day and a public holiday. The MPs were further dumbfounded when the Registrar said that the Chinese company's certificate of registration was only collected three years later.

Normally the Registrar of Companies will refuse to register two companies with similar names in the same industry for fear of fraud.

Gachegu struggled to convince the committee members why two companies with similar names existed contrary to the law. This MPs blamed her for failing to deregister one company to save potential losses.

In 2009 the Registry of Companies launched the document management system. A name search is supposed to check companies so similar names are not registered.

"It had not come to the attention of the Registrar but we notified the Kenyan firm early this month that the allocation of name was inadvertent and therefore no longer tenable," Gachegu told the appalled MPs.

Linturi said that the directors behind the local company may be aliases for powerful individuals in the country. "To me this is like another James Bond movie. This is a properly choreographed and properly executed scheme to defraud this country," Linturi said. Gachegu however insisted that the Chinese firm won the tender and not the Kenyan.

She was hard pressed by Gichugu MP Barua Njogu who asked whether the memorandum and articles of the two companies at her office showed they were in the same business.

"Could this be a conduit to con public money? Has any of the companies ever complained of the existence of another with a similar name. Has the Kenyan firm complained of the other one getting the contract?" posed Njogu.

The Registrar produced a letter dated February 12 from the Chinese firm complaining of media reports that there was a firm with a similar name. The MPs dismissed her explanation saying there had never been any media reports about two firms.

Committee member Francis Nyenze (Kitui West MP) said the committee had unearthed the information that it was looking for.

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