Directors of Ederman Property Limited (EPL) Zeyun Yanga and Zhang Jing before Milimani Anti-corruption Court in Nairobi during the hearing of Lake Basin Development mall graft case./PHOTO BY S.A.N.


Former Lake Basin Development Authority (LBDA) Board chairman Onyango Oloo received bribe of Sh17 million from the contractor as an inducement to facilitate the allocation of funds for the project, a Nairobi court has heard.

Making opening remarks before the anti-corruption court Director of Public Prosecution Noordin Haji said the board chairman who doubled as a legal advisor to the contractor Ederman Properties Ltd (EPL), failed to declare his interest in the course of the procurement.

Through special prosecutor James Kihara, the DPP told anti-graft magistrate Kagure Nyutu that prosecution will also prove that agents of LBDA) misled the authority by submitting a final account of about Sh4.1 billion, which was over and above the actual value of works executed in the project.

According to the Prosecution, the contractor has so far received a payment of Sh4.5 billion which is way over the contract amount leading to loss of public funds.

“The defence may argue that that the construction of the mall as per LBDA’s specification is complete awaiting handover to LBDA.

“However, we will establish that the cost of completing the works was exorbitant hence LBDA failed to get value for money in the project,” Kihara told the anti-graft court.

He added, “Based on the evidence collected which will be presented in details, at the conclusion of the trial we will request this court to find the accused persons guilty of the offences as per the charge sheet.”

The prosecutor told the trial court that they intend to prove that the inception the idea of the construction of a shopping mall in lower Kanyakwar area in Kisumu county was conceptualised, advertised and intended to be purely a public private partnership project under the Public Private Partnership laws.

The successful bidder was required to provide financing for the entire project and recoup their investment through proceeds from the investment.

Kihara further told trial court the prosecution will prove that midflight the irregular process commenced by the accused persons the terms were charged by Ederman Properties Ltd purporting that they would provide 80 percent of the funds and LBDA was to provide 20 percent.

“The Prosecution will then establish that Ederman Properties Ltd never provided any amount for the project instead they entered into a financial arrangement with Co-operative Bank and borrowed to finance the project and irregularly charged the property of LBDA in disregard of the law,” Kihara told the Court.

The also intends to prove that the procurement as concluded under the Public Procurement and Disposal of Assets (PPDA) regime was irregular.

The requisite Public Private Partnership (PPP) Directorate were not sought and obtained by LBDA prior to commencing the procurement process.

The Prosecution further intends to prove that the accused persons, fully aware that the entire project was a Public Private Partnership (PPP) engaged in irregularities when they commenced the procurement under the PPDA.

According to Kihara, Haji intends to prove that they did not comply with the laws as set out.

He said the Erderman Properties ltd had not met all the mandatory requirements for the bid in the tender and the contract was signed by the Managing director of LBDA on 8th April 2013 before the lapse of the required fourteen days.

The court heard that Erderman Properties ltd submitted the tender document after the tender period had lapsed and Erderman Properties bribed officials to secure the award of the contract. There was over payment for the contract with 57% beyond the requisite percentage of 25 percent.