Safaricom Scandals – KPMG Audit – Part IV


We conclude this four part series analysing the draft KPMG audit report, by providing a keynote summary to the report. The full report is also appended below for your reading pleasure.

The entire report and analysis has, as always, been anonymously provided by a concerned and patriotic citizen to whom we are truly grateful.

We first ask and answer the question WHY?

KPMG was requested to conduct a Safaricom Process Audit, with focus on Procurement Process or Practice, and some notable, key or flagship projects such as One Campus, Activations, etc.  Page 9 through 12 of the report lists these in detail.

We treat this report in the same way we treat Wikileaks and other papers that suddenly find their way into the public domain.

On page 16 we find that a select 5 staff had their IT equipment forensically imaged and I presume analysed.

The Executive Summary found in Pages 21 through 30, highlights the key findings which I summarise below in a highly condensed text, feel free to go through the entire document at your leisure.

  • Safaricom is a very large company and therefore attracts and transacts very large contract amounts
  • The procurement process and policies are not strictly followed and a number of those contracts have been manipulated to favor individuals and companies with ties to some of the top executives.
  • Due to the foregoing, contract amounts and payments may have been inflated or irregularly awarded and / or paid out.
    • E.g 5 acres of land was purchased at Kshs. 1.2b when the going price in the area was for half that amount.
    • Similarly contracts were single-sourced and rival bids mysteriously quashed for unknown reasons, resulting in higher prices paid and not necessarily any more added value.
    • Lack of due diligence in evaluating contractors also bring about high risk in performance
    • A number of contracts were executed without due process and therefore lack clear or identifiable objectives and terms

We also want to circle back to the articles appearing in NairobiLawMonthly found at the links below

The Safarigate Scandal

Safaricom Wrest License from Tetra

It then becomes very clear that Safaricom is engaging in very dodgy deals, but it appears that this with in the very least, tacit approval from senior executives all the way to the top CEO.

Now some may wonder why this should concern anyone. Well it does.

First that single purchase of land at more than twice the market value immediately impacts land in the neighbourhood. Some may snigger that the value of their land is appreciating, however the truth is that at those prices, locals will over time be edged out and in the future that area will become out of bounds for anyone not sufficiently endowed. Any slight mistake and peasants will be loosing their land.

Secondly, Safaricom has a sizeable local shareholder ownership. These underhand and boardroom deals eat into the profits, and although they may boast of having declared the largest profit ever, we must remind ourselves that Telkom or KPTC was once a giant.

In closing, with such brazen abuse of process and policy, with such low integrity, we must then ask, what really happened with the transmission of electoral results in 2013? Did the systems really break or was it more to do with the lack of integrity?

I will be adding more insight in the comments pages but for now leave you to read for yourself.









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