Kenya: Kisumu Speaker Onyango Oloo, 34 Others Wanted Over Sh4.1 Billion Mall Scandal

7 September 2019

Director of Public Prosecutions (DPP) Noordin Haji has ordered the arrest of Kisumu County Assembly Speaker Onyango Oloo and 34 others over a Sh4.1 billion tender for the construction of a mall in Kisumu County.

Haji said the cost of the Lake Basin Development Authority Mall was inflated from Sh2.5 billion to Sh4.1 billion.

Following the arrest warrant, John Zeyun Yang, one of the officials of a Chinese construction firm - Edermann Property Ltd - and Bobasi MP Innocent Obiri were arrested and detained on Friday evening.

The DPP said the Mr Oloo, a former chairman of President Uhuru Kenyatta's TNA party, alongside a former chairman of the finance and establishment committee of the LBDA board, George Odawa, were bribed to inflate the cost of the building on the outskirts of Kisumu city from Sh2.5 billion to Sh4.1 billion.

SWITCHED CAMPS

Mr Oloo was a close ally of Mr Kenyatta until the 2017 general election when he switched camps to ODM.

Haji said the Ethics and Anti-Corruption Commission received a complaint on July 28, 2015 that the construction cost for the LBDA Mall had been inflated.

The DPP, in a statement sent to newsrooms, stated that the investigations have unearthed amongst many irregularities, collusion between some Board members of the LBDA and Erdemann Properties Limited.

"It has been established that there was collusion between some Board members and M/s Erdemann Properties Limited... ..The directors bribed the chairman of the Board George Onyango Oloo to the tune of Sh17 million," the DPP said.

Haji Mr Odawa received Sh12 million from Edermann to ensure the contract was varied.

IRREGULARLY APPROVED

When the mall was under construction, the DPP said the authority irregularly approved additional scope of works in a meeting held on December 18 and 19, 2015, for additional sum of Sh620 million for construction of a showroom, tyre centre and a three-star hotel.

Further, the board allegedly approved a loan of Sh1.3 billion from Cooperative Bank by the contractor, hence enhancing the borrowing to Sh2.5 billion.

Consequently, according to the Mr Haji, a deed of variation was signed by then LBDA managing director Peter Abok and Oloo on February 17, 2015, varying the amount from Sh2.5 billion to Sh3.8 billion without the approval and concurrence of the national treasury.

This, the DPP said, constituted a 57 percent variation against the prescribed 25 percent under the Public Procurement and Disposal Regulations of 2013.

Some of the 11 charges they are facing include conspiracy to defraud; unlawful charging of public property; failure to disclose private interest to one's principal; unlawful acquisition of public property as well as corruptly receiving and giving benefits.

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