Kenyan envoy on the spot over Tanzanian cashew nut deal

Tuesday May 21 2019

 Dan Kazungu

Kenyan ambassador to Tanzania Dan Kazungu during a past event. FILE PHOTO | NATION MEDIA GROUP 

DAILY NATION
By DAILY NATION
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Kenyan ambassador to Tanzania Dan Kazungu is on the spot for endorsing a local firm that took John Magufuli government for a ride in a Ksh18 billion ($180 million) cashew nut deal.

On Monday, the Tanzanian Parliament was told that Mr Kazungu gave Indo Power Solutions a clean bill of health to buy 100,000 tonnes of the nuts.

Tanzanian Trade and Industries Minister Joseph Kakunda said there was an exchange of communication between the Tanzanian government, Tanzanian Embassy in Kenya and the Kenyan Embassy in Tanzania before the deal, which flopped, was signed on January 30.

According to the minister, he received a letter from Indo Power Solutions December 20, 2018 expressing their interest in buying the nuts.

On December 22, 2018, the minister wrote to Tanzanian embassy in Kenya to do a background check of Indo Power Solutions.

The minister received a letter from the Tanzanian embassy in Kenya on December 27, 2018 confirming the registration of the company in Kenya and its dealings in Kenya.

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The minister then wrote to Indo Power Solutions on January 4, 2019 to present a letter from the Kenyan embassy in Tanzania.

The Kenyan embassy in Tanzania was supposed to write to the minister and confirm that Indo Power Solution was registered in Kenya and is allowed to do business in Tanzania.

A letter that the Kenyan embassy wrote on January 7, 2019 and gave the Indo Power Solution cleared the little know firm for the multi-billion-shilling tender.

"The ambassador brought all the registration and operation documents to satisfy that the company is registered and working in Kenya,” Mr Kakunda told the House.

“After satisfying all the requirement, it's when we started engaging the company directly.”

The first official communication between the Tanzanian government and the Indo Power Solutions happened on January 10 and 14, 2019.

The meeting was chaired by Deputy Permanent Secretary in the Ministry of Trade and Industry Edward Mhede.

Deal

The deal was signed on January 30, 2019, at the EAC headquarters in Arusha by Tanzania's Director of Cereals and Produce Board Hussein Mansoor, and Kenya's Indo Power Solutions CEO Brian Mutembei.

During the signing, Mr Kakunda; Minister for Constitutional and Legal Affairs Palamagamba Kabudi, Deputy Minister for Agriculture Innocent Bashungwa and Kenya's ambassador to Tanzania Dan Kazungu were all present.

In the deal, the company, which Mr Mutembei, sold as a “commodities company” dealing in coffee and chicken farming, alcohol importation and whole petroleum products sale, was to pay the Ksh18 billion ($180 million) within three days.

Dar gave them the boot in March for failing to raise the amount in three days and later, a month extension.

Within the Kenyan business cycles, Mr Mutembei is mostly known for his flashy lifestyle, hanging out with the known figures in the political class.

Two years ago, he was one of the guests who attended the graduation party of Saumu Mbuvi, the daughter to Nairobi’s Governor Mike Sonko. Together with Paul Kobia, they gave her Ksh500,000 ($5,000) between them.

Mr Mutembei is also know to sponsor several sporting activities in Meru County.

Bluff

What Mr Mutembei was attempting to pull off in the commodities market was seen as a bluff.

The funds he expected to pay the Magufuli administration, equalled half of what the Kenyan government spent in constructing one of most innovative road projects in the country, Thika Road.

The revelations that his firm was a small time shadowy outfit engaged in chicken and coffee farming, cast doubt on his ability to finance the deal, unless it acted as a broker for an unknown third party.

Queries by the Nation, including searching through company records, revealed that the firm, which was registered in October 2016, states its physical address as Indo House in Thika, with its office address listed as “Ground Floor, Room 6, Kisii Road, Thika.”

Its directors are listed as Joyce Waithira Gatoho Muigai and Alice Wanjiku Gatoho, who jointly own 100 per cent shareholding.

But the Nation could not locate Indo House in Thika.

—Additional report by Kennedy Kimanthi and Allan Olingo.

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