HomeInternationalCentral bank boss charged in latest Kenya scandal

Central bank boss charged in latest Kenya scandal

By Helen Nyambura-Mwaura


NAIROBI – A new corruption case rocked Kenya on Thursday when the central bank governor was charged with nepotism for awarding lucrative consultancies to his son and three associates.


Andrew Mullei, who has run

the bank during a period of healthy economic growth since March 2003, was the highest-ranking serving official to be formally charged in a string of damaging graft scandals.


The case was a new blow to President Mwai Kibaki, who has already lost three ministers this year in resignations linked to corruption allegations as well as suffering a humiliating defeat in a constitutional referendum last November.


“I plead not guilty,” Mullei said when four counts of abuse of office were read out at a special anti-corruption court.


Senior principal magistrate M.W. Wachira said Mullei had made four appointments as consultants to the bank, including his son Silla, “without following the correct procedures”.


According to the charges, Mullei in 2004 “used his said office to improperly confer a benefit on Silla Mullei” by making him a consultant for a fee of 2.62 million shillings ($35,930).


He was also accused of appointing Terry Ryan, who earned 305,600 shillings in consultancy fees, Melville Smith who benefited to the tune of 3.84 million shillings, and Titus Mwirigi who gained 2.3 million shillings.


The four could not be immediately reached for comment.


As with charges launched last week against a clutch of senior former officials, the fact that the case has been brought may in fact help restore some of Kibaki’s damaged credibility in the eyes of Western donors and angry Kenyans.


Kibaki came to power in 2002 vowing to crack down on the corruption and nepotism rampant under his predecessor Daniel arap Moi’s 24-year rule. But he has been accused of turning a blind eye to continued corruption in his administration.



“DISTINGUISHED ECONOMIST”


Under Kenyan law, the central bank governor can only be sacked if convicted of dishonesty or fraud, or an investigative tribunal appointed by the president recommends his departure.


“The government will look at all options,” government spokesman Alfred Mutua said. “The government believes very much in what the governor is doing.”


In a successful bid for bail, Mullei’s lawyer Mutula Kilonzo described him as an eminent Kenyan. “He is a distinguished economist and if you look at the charges, they are not the sort of charges for a man of this kind to run away from court.”


Mullei, who spent a couple of hours in a police cell after the charges were heard, was ordered to surrender his passport.


The central bank governor is credited with bringing stability in the banking sector, but some critics have attacked his policies on exchange and interest rates.


The Kenyan shilling dipped as news broke of the charges, but quickly recovered. “It was a kneejerk reaction but the market is beyond that now, it has chosen to ignore it,” said Noah Meely, a senior treasury manager at Citibank.


Five former senior officials under Moi were charged on Monday with fraud and theft in Kenya’s biggest scam, the so-called Goldenberg case, when some $1 billion was lost from state coffers via export subsidies for fake mineral exports.


Both Ryan, an economic consultant, and Smith, an accountant, were expert witnesses at an inquiry into that case.


One of Kibaki’s ministers has resigned over Goldenberg, and another two over the more recent Anglo Leasing scam which involved fraudulent government tenders for at least $200 million. — Reuter

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