Auditor General flags purchase of shares worth Sh6.2B in two development banks

Auditor General Nancy Gathugu has raised a red flag after revelations showed that the government bought shares worth Sh5 billion from the Africa-Export Import Bank (Afreximbank) and Sh1.29 billion shares from the Eastern and Southern African Trade Development Bank in the last financial year.

The moves, according to the Auditor General, aimed to catalyze the government's presence in the banks to have them channel investments to the country.

Gathungu, however, raised concerns over the transactions and expressed doubts that there was value for money in the spending of the money after her office was denied access to the banks.

"A review of documents on the purchase of shares revealed that the government bought shares in Eastern and Southern African Trade and Development Bank and Afreximbank to increase its influence and relevance in the bank’s activities.

"This was especially on investment decisions, with the intention of having the banks channel more investments to Kenya," the audit showed.

Auditor General Nancy Gathungu Auditor General Nancy Gathungu Pulse Live Kenya

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Gathungu expressed her inability to verify the Treasury's actual acquisition of the shares and to ascertain whether there were any advantages that the Government of Kenya might have gained through the share purchase.

Another issue that came up was the government’s buyback of 60 per cent of Telkom Kenya Limited shares from Jamii Holdings Limited during the last days of former President Uhuru Kenyatta, which has since raised serious concerns in the government, with the Cabinet reversing the transaction in October.

Parliament's report on the first supplementary budget for the financial year 2022/2023 indicated that there was no justification for Telkom Kenya’s shares buyback.

Auditor General Nancy Gathungu Auditor General Nancy Gathungu Pulse Live Kenya

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Gathungu's request to visit the registered offices of the company that sold off the Telkom Kenya Limited shares in Mauritius and the United Kingdom were either declined or not responded to.