Kenyan Opposition Demands Forensic Audit of Eurobond Funds

  • Former premier Odinga says $999 million hasn't been accounted
  • Odinga says government involved in `a great con game'

Kenya’s main opposition leader called for an independent forensic audit to trace where $999 million from the country’s debut Eurobond was deposited.

Former Prime Minister Raila Odinga demanded the resignation of Treasury Secretary Henry Rotich and other officials. He also called on the Federal Reserve Bank of New York and JPMorgan Chase & Co.’s South African branch to account for the movement of the funds after the Kenyan Treasury said it deposited the money with the Federal Reserve in September 2014. Odinga leads the Coalition for Reforms and Democracy party.

“We are convinced that we are in the middle of a great con game, treachery and thievery by the agents of the Kenyan state working in cahoots with international actors,” Odinga told reporters Thursday in the capital, Nairobi.

Rotich didn’t answer his phone when Bloomberg called seeking comment. Federal Reserve Bank spokeswoman Andrea Priest said by e-mail she couldn’t immediately comment. Heidi Geldenhuys, a spokeswoman for JP Morgan Chase’s Johannesburg branch, said the bank would comment later.

The Central Bank of Kenya, the government’s banker, said any allegation that its officials were involved in any misappropriation of Eurobond funds has "no basis and is erroneous." Odinga named the institution’s chairman Mohammed Nyaoga as one of 10 “persons of interest in this saga."

Nyaoga, who was appointed Chairman of the Bank in June "had no access to or participation in the Eurobond matter," the Nairobi-based central bank said in an e-mailed statement on Thursday. The bank provided "all evidence requested by the investigating agencies on the receipts and disbursement of these funds," it said.

Kenya’s public prosecutor last month ordered police and anti-graft investigators to probe the allegations by the opposition of the missing funds. Last week, the country’s Ethics and Anti-Corruption Commission said it found no evidence of criminal action by government officials in spending the cash raised in the 2014 sale of $2.82 billion of Eurobonds. The Treasury has said it has evidence to show that all the money from the sale in 2014 is accounted for.

Odinga said Rotich undermined the constitution by failing to deposit the proceeds of the debt sale “immediately and in full” into the government’s so-called Consolidated Fund. He also accused the treasury secretary of “concocting documents to cover up a massive loss of public funds” and misleading the country’s Public Accounts Committee and taxpayers that the proceeds were paid in full into that account.

Kenya sold the Eurobonds to raise funds for a new railway from the port of Mombasa to Nairobi, the capital, and other development projects. Misuse of the funds would threaten plans to build infrastructure to help boost growth to at least 10 percent a year, compared with an estimated 6.5 percent in 2015.

Kenya ranked 145 out of 175 nations on Berlin-based Transparency International’s 2014 Corruption Perception Index, which measures perceived corruption around the world.

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