NAIROBI, Kenya – The Ethics and Anti-Corruption Commission has arrested nine suspects in connection with an investigation into the alleged embezzlement of Sh1.57 billion from a National Treasury programme, with investigators now pursuing the recovery of the funds.
The nine suspects are being held at the commission’s Integrity Centre as investigators process the case ahead of their expected arraignment.
The arrests come as the anti-graft agency investigates alleged fraud involving the Programme for Rural Outreach of Financial Innovations and Technologies (PROFIT), a financial inclusion programme funded through a loan from the International Fund for Agricultural Development (IFAD).
According to the EACC’s latest quarterly report, investigators established that more than Sh1.56 billion was fraudulently deposited into a bank account opened in the name of the programme after its official account had already been closed.
The suspects allegedly used forged National Treasury documents to open the new account, creating the impression that it was a legitimate account belonging to the PROFIT programme.
The investigation established that Sh784.7 million was subsequently transferred to 23 companies, while another Sh768.2 million was allegedly withdrawn in cash, raising questions over how the funds were authorised and disbursed.
How the scheme worked
The PROFIT programme, which was launched on December 22, 2010, operated under the Treasury’s Directorate of Budget, Fiscal and Economic Affairs, and was established to improve access to credit for small-scale farmers through credit guarantees, direct lending via microfinance institutions and capacity-building initiatives. The programme ended on December 31, 2019.
However, the EACC alleges that after its closure, some officials fraudulently processed and authorised the release of Sh1.554 billion from the National Treasury under the guise of programme funding.
Investigators say the fraud was facilitated through fake payment vouchers seeking funding for PROFIT activities, allegedly backed by requests originating from IFAD, despite the donor having ceased financing the programme at its closure.
The EACC has recommended charges against programme officials, senior National Treasury officers and proprietors of the companies involved for offences including conspiracy to commit economic crimes, money laundering, abuse of office and acquisition of proceeds of crime.
Wider corruption probe
The anti-graft agency said the wider investigations had uncovered suspected corruption and economic crimes involving at least Sh1.87 billion in public funds across the National Treasury and several county governments.
The commission has also secured court orders freezing assets, including buildings and bank accounts, linked to the alleged embezzlement.
The suspects are expected to be arraigned in court once investigations are complete, and the Director of Public Prosecutions gives directions on the charges to be preferred.
