News Column

Yes, I Approved Anglo Leasing Payout - Controller of Budget

June 5, 2014

Gideon Keter



CONTROLLER of Budget Agnes Odhiambo yesterday admitted that she approved the loan aimed at paying back debt to Anglo Leasing related companies. She however clarified that her authorisation was in conformity with the constitution.

"It is clear that the approval by the Controller of Budget was in conformity with the constitution and all the laws of Kenya," Odhiambo said. Appearing before the Parliamentary Public Accounts Committee, Odhiambo said had she not approved the Treasury's requisition for a loan to settle the Sh52 billion debt, the country "would have had far reaching consequences that would not only affect the present generation but generations to come".

"I undertook a cost benefit analysis of the payment versus non-payment of the loans before approving it. From the information at hand, it was our opinion that failure to pay the debts would have far reaching consequences," She told the Ababu Namwamba-led committee. Odhiambo said Kenya has paid Sh1.2 billion to local banks as interest and extension fees on the $600 million (Sh52.5 billion) syndicated loan.

She said in the process, the government incurred Sh1.2 billion additional cost on the loan due the extended repayment period and interest. Two weeks ago, the Jubilee administration found itself in a difficult situation when it was forced to pay Anura Perera Sh1.4 billion.

Perera is the man behind the Anglo Leasing-linked procurement deals owning First Mercantile and Universal Satspace companies that went to court to compel the government to pay the money. The two companies had been awarded tenders to supply communications equipment between 1997 and 2004.

Perera has since issued fresh demands for an additional Sh3.05 billion. Odhiambo told the committee that the loan was to be paid in May this year but Treasury could not pay because it was yet issue the sovereign bond, which would have raised the amount. She said if the loan was not cleared it would have resulted in stalling the issuance of the bond which has been budgeted for in the 2013-14 financial year.

The Eurobond is set to be issued in June and part of the proceeds will be used to settle the syndicated loan and fund infrastructure projects. Odhiambo asked Parliament to launch investigations into the two contracts saying those found at fault should be prosecuted.

"The Controller of Budget requests Parliament to ensure that investigations into the two contracts are expedited. The investigations should seek to unearth the architects of the scheme and all parties found culpable should face the full force of the law," she said.

"All parties who participated in the entire process of designing and procuring the projects, negotiating and signing the contracts and ensuring that the contracts are performed should shed more light on this matter. The investigations should not take forever, let us reach finality and tell Kenyans what happened. Kenyans deserve the truth."


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: AllAfrica


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters