Kenya Paid 15 times Higher Insurance for Controversial Arror and Kimwarer Dams Loans
Investigators of the Arror and Kimwarer dams saga were shocked when they discovered Kenya paid 17.5 per cent of the loan as insurance instead of the industry fair rate of 1.5 per cent.
The money was paid to the credit insurer Service Assicurativi Del Comercio Estero (SACE) that is owned by the Italian Government.
A report by The Standard indicated that the loans were procured from a consortium of banks led by Intesa San Paolo.
The chilling details of the case were revealed after detectives jetted into the country from Italy. They had left the country and were handed copies of documents in Italy by SACE officials.
The insurance issue became a subject of interest for investigators as they sought to determine why SACE charged an amount that was way higher than the industry’s average.
Nonetheless, it has emerged that insurance arrangements as this, should have guaranteed that the loan would be settled in case the borrower is unable to repay, including in cases of retrenchment or death of individuals.
The revelations come as investigators continue to piece together information on the scam, which has been at the center of a controversy.
So far, several people have been questioned by the Directorate of Criminal Investigations (DCI) to shed more light on the Ksh21 billion scandal.
Among them is the National Treasury Cabinet Secretary Henry Rotich, who has been grilled on different interests with the focus being how money was released to the Italian firm before the project commenced.
“Expect action soon. We have interpreted all that we had and we are ready for action,” informed a source at the DCI.
At least four charges await individuals, including other top government officials found culpable to have been involved in the scam leading to the loss of more than Ksh21 billion awarded to an Italian contractor.
The charges include conspiracy to commit an economic crime, aiding the commission of an economic crime, abuse of office and negligence of official duty.
Some of the investigation files had been sent to the Director of Public Prosecutions (DPP) before being returned to the DCI to have the new information appended.
The Italian insurer had received a total of Ksh8.9 billion.
DCI officers also established that Ksh900 million was being spent as compensation for land acquired for the projects.
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