Details have emerged of how a company formerly associated with Labour CS Simon Chelugui could have benefitted from tenders in the Ministry of Water where he was previously in charge.
The Ethics and Anti-Corruption Commission is seized of the matter and is considering opening investigations to establish if there was any wrongdoing on the part of the minister.
The CS is a close ally of Deputy President William Ruto.
Documents seen by the Star show Chelugui was once a director of Afrety Global Logistics Limited but resigned when he was named to the Cabinet in January 2018.
He then transferred his shares to the company that went ahead to get tenders from the Water ministry when he was in charge, in what could be a conflict of interest.
On Thursday, Chelugui denied any wrongdoing, saying he was not responsible for the company’s activities once he resigned.
“I resigned in May 2018. I handed the shares back to the company and have not followed what they have been doing since then,” he said.
“When I left, the company had no assets and I helped to form it with young people who needed some support.
“The shares had no value, no assets, only liability of Sh18,000 overdrawn in the bank by the time I left, so I handed back to the company my shares.”
Afrety Global Logistics, which was registered in 2014, deals in water treatment, sanitation, borehole drilling and pump installation, among other services.
Minutes of a meeting held on May 10, 2018, indicate that Chelugui resigned as director and shareholder of the company in May 2018. The resignation came months after Chelugui was nominated by President Uhuru Kenyatta to head the docket in January.
“Betty Birchugo, Reuben Kiborek and Simon Chelugui had resigned as directors and shareholders of the company and each forfeited 200 ordinary shares back to the company with effect from May 10, 2018,” the minutes read.
Cyrus Kipkazi was appointed as director and allotted 200 shares. Jonathan Koech, also a director, was cited as having 600 shares. And on September 2018, Elkana Rono was introduced as one of the new directors.
Documents indicate that Afrety has handled several projects in Chelgui’s home county of Baringo, as well as Narok and Murang’a.
Among the projects the company undertook in 2015 was the supply of surface pumps for Badasa dam — pump house, backwash dosing and treated water pumps — at Sh4.6 million.
In 2018, the company undertook drilling, casing, equipping and civil works of Chepkoburot borehole that fetched more than Sh15.6 million. The company got the contract months after Chelugui took office.
Drilling of Kewamoi dispensary and Tendwet boreholes also earned them about Sh30 million.
The company secured another contract for Sh126 million to construct Naivasha Industrial Park and supply water, having been subcontracted by the China Civil Engineering Construction Corporation (Kenya) Limited.
A contract agreement signed between the two companies dated February 17, 2020, indicates that the construction period was to take nine months from the date of signing.
The company was also planning to sign a contract agreement for executive design and works for rehabilitation of water and sanitation systems of Kirandich Basin Capacity Building in Baringo. The contract was to be signed on February 22, 2019.
The company had also prepared to sign a contract agreement for executive design and works for rehabilitation of water and sanitation systems of Kirandich Basin Capacity Building in Baringo.
The contract, which was never signed, was slightly in excess of Sh132 million.
On Thursday, Birchugo, one of the directors, claimed that she was removed from the company irregularly. She said documents dated May 10, 2018, purporting that she resigned from the company were questionable because she never resigned.
“Chelugui transferred his shares to a junior staffer, an accountant in another company, Penelly Construction and Engineering Limited. He then left the company under one Moses Kibet,” Birchugo said.
Penelly, she said, would come to the rescue of Afrety Logistics and even stand as a bank guarantee to assist it to get a loan.
“Following the meeting of the Board of Directors held on March 20, 2020, we resolve to guarantee Afrety Logistics Limited for the performance Bond guarantee they have applied through your bank. The bank guarantee is to cover for advance payment of Sh122,617,575 for a sub-contract project awarded to them by China Civil Engineering Construction Corporation (Kenya) Limited,” reads a letter to the Family Bank manager, dated March 20.
The letter is signed by Moses Kibet and Elkana Rono Cheruiyot.
Kibet, however, denied that the two companies were related, adding that he was only assisting. He denied any blood relationship with Chelugui.
“There is no relationship between Afrety and Pennelly. I am the sole director of the company (Penelly),” said Kibet, who, however, admitted that he knows Chelugui very well.
For his part, Cheruiyot claimed the signature on the letter was a forgery.
“I did not authorise the signing of the letter, neither did I agree to stand guarantee for anyone. It is shocking that my name appears in the letter,” Cheruiyot said.
He further denied claims that the CS transferred shares to him and says it was Koech who gave him the 200 shares after he agreed to work with him.
Koech, the current director of Afrety, said the subcontract they had secured for construction of the Naivasha industrial park and supply of water for the project was cancelled because of the Covid-19 crisis.
As for Koech, they used to do business before the CS resigned and even after.
“We have been in business even before the CS was appointed. We would have business worth billions if the CS was on our side,” Koech said.
When contacted, Rift Valley Water Works CEO Hosea Wendot said they were not aware that Afrety had links with CS Chelugui.
“We were not aware and this not allowed,” he said.
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