DP Ruto in trouble as his company mysteriously “wins” a multi-million contract

Detectives are investigating how an insurance company associated with Deputy President William Ruto was brought on board by Kenya Pipeline Company (KPC) midway through an ongoing multi-million-shilling contract.

Africa Merchant Assurance Company (Amaco) Ltd had not participated in the tender number KPC/PU/001-OT/16 for KPC’s “All Risk Industrial and Terrorism & Sabotage Cover”, a three-year contract that was won by CIC Insurance.

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However, Amaco somehow eventually got 30 per cent of the business while CIC holds 70 per cent as the lead underwriter. AIG Kenya Insurance Company Ltd holds the Public Liability Policy.

How the troubled Amaco, which has been facing threats from auctioneers, managed to get the lucrative insurance contract is now the subject of investigation by the Directorate of Criminal Investigation (DCI) that suspects fraud. The investigators are also looking into how AIG won the public liability policy despite having not been recommended for award.

DCI boss George Kinoti confirmed the latest investigation, saying he was “going after all those who stole at KPC and other public institutions”.

DCI detectives have asked for documents related to the tender. Top officials of the corporation have been to the Kiambu Road headquarters of the DCI for interrogation and statement taking.

KPC Board chairman John Ngumi was at the DCI headquarters on January 31, and was asked to explain the insurance irregularities to the investigating officers who are keen on unravelling the Amaco puzzle.

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Mr Ngumi, who was briefly interrogated, left DCI after promising to deliver all documents related to KPC’s insurance. On Saturday, he told the Sunday Nation he had only had a “conversation” with detectives but was not required to record a statement.

Several other senior KPC managers, including from the procurement department and the tender committee, are scheduled to appear before detectives as the probe continues.

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Both Amaco and CIC did not respond to our e-mails seeking their reactions to this development.

The cover is for KPC’s large capital assets including the Kisumu oil jetty, tanks (identified as PS10) and Mombasa-Nairobi pipeline (Line V) against terrorism, sabotage, political violence, industrial risks and commercial and general liability.

The contract period runs from June 1, 2016 to June 30, 2019.

However, three months after CIC Insurance signed the contract, the broker for KPC assets, Sedgwick Kenya Insurance Brokers, approached KPC on September 9, 2016 “to confirm if it is in order” to co-insure 20 per cent of the business “awarded to us” to Amaco.

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With no response yet from KPC, Sedgwick on September 14 again wrote to KPC referring to their September 9 letter and requesting KPC “to confirm if it is in order to co-insure 30 per cent (the figure having been reviewed from initial 20 per cent) of the business awarded to us specifically the Industrial All Risk and Terrorism Sabotage covers to Africa Merchant Assurance Company Ltd.”

On September 16, 2016, then KPC managing director Joe Sang granted a no objection to co-insure to Amaco, according to an audit of the contract, now in possession of the DCI.

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With the stroke of the pen, Amaco got the lucrative contract. On August 9, 2018, Amaco billed KPC through six different debit notes some Sh7.6 million in premiums. Then a week later on August 16, there were two additional debit notes, with cumulative value of Sh2.2 million.

The cover against political violence and sabotage for Line V and Kisumu Oil Jetty has a limit of liability of about Sh50 billion, same as the cover against Industrial All Risk, both of which are being undertaken by Amaco.

The audit warns that KPC risks ‘exposure of 30 per cent of the assets being provided by Amaco.’

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