Kenya’s Public Investments Committee has called for the investigation of Lucy Mbugua, Victor Arika as well as all other present and past officials of the Kenya Airport Authority (KAA) involved in the designing and subsequent signing of what it deems as ‘flawed contract agreements’ between KAA and duty free shops operators at JKIA and MIA.

 

The Kenyan Parliament’s PIC is also calling for an investigation – from the Ethics and Anti-Corruption Commission (EACC) – into the allocation of duty free shops at Jomo Kenyatta International Airport’s Terminal 1A to Maya Duty Free and any other DF operators there. The PIC says these operations ‘seem to have been undertaken in total disregard of procurement laws and procedures’.

 

Failure for not ensuring a deed of settlements between KAA and duty free operators World Duty Free (WDF) and Diplomatic Duty Free (DDF) is apparently costing KAA and Kenya tax payers Kshs 17.15bn ($168m).

 

“KAA in consultation with the Attorney General works towards amicably finalizing the matter of Arbitral Award of Kshs. 4.3bn ($42m) granted to World Duty Free Ltd in regard to HCCC 413 of 2008,” says the PIC in its report.

 

“Stephen Gichuki as the then KAA CEO [should] be held personally criminally/civilly liable for abuse of office by executing the forceful eviction of WDF/DDF from JKIA at night using hired goons without taking due consideration of the legal and financial implication of the action on KAA and the businesses operating at the duty free shops in JKIA,” adds the PIC.

 

“Through his action, Kenya public stands to lose not less than Kshs. 7bn which WDF/DDF is claiming for loss incurred during forceful eviction.”

 

This fee is reported to be allegedly going straight in the pocket of controversial billionaire Kamlesh Pattni, who ran the WDF operation in the nineties. Pattni was implicated in the 1990s ‘Goldenberg scandal’ – a political scandal in which millions of dollars were paid for non-existent exports of gold and diamonds – but he was acquitted in 2013.

 

Background:

The International Centre for Settlement of Investment Disputes (based in Washington D.C.) found the lease agreement entered into between the Government of Kenya and WDF in the year 1989 to be ‘shrouded in bribery allegation and therefore had no force of law hence was declared null and void’, says the PIC in an official document.

 

As reported by TRBusiness, in 2006, the International Centre for Settlement of Disputes (ICSD) heard the case against the former Kenyan Government accused of involvement in the sequestration of duty free shops owned by World Duty Free.

 

Later on that year, the Kenyan Government submitted a request to the International Court of Justice at The Hague in the Netherlands to postpone the case for $500m compensation brought against it by World Duty Free (Africa) Chairman and owner Nasir Ibrahim Ali.

 

In another twist to the tale, in October 2006, the former President of Kenya, Daniel arap Moi, threatened to sue the former head of World Duty Fee Kenya Nasir Ibrahim Ali, after the latter claimed to have paid him a $2m bribe in 1989.

 

Fast-forward six years to 2012 and the case sees the Kenyan Airports Authority (KAA) contesting that ‘World Duty Free has no legal right to stop commercial development at Nairobi Airport’.

 

In the country’s leading newspaper The Nation, the KAA allegedly claimed that the court has no jurisdiction over the case and has accused the company in the newspaper of misleading the court on the matter.

 

In 2013, a legal case brought against the Kenya Airports Authority (KAA) by Kamlesh Pattni’s World Duty Free Shops was delayed after the High Court judge disqualified himself.

 

Pattni’s World Duty Free firm was taking the KAA to court because he believed it had the right to operate shops at Jomo Kenyatta International Airport in Nairobi and Mombasa airports under a 10-year contract. Pattni appealed against the judge’s decision to withdraw from the case.

 

However, in July 2013, Kenya Airports Authority applied for a judgment awarding Kamlesh Pattni exclusive duty free rights at Nairobi and Mombasa airports to be quashed.

 

The KAA argued that “the award” was made without any legal representation on its part and it also alleged that bribery had taken place in relation to this matter.