The Ethics and Anti-Corruption Commission (EACC) has apprehended two senior officials of Liaison Group Insurance Brokers in connection with a fraudulent Ksh. 40,539,760 medical insurance tender awarded by the Kenya Maritime Authority (KMA).
The suspects, Julius Kitheka, General Manager of Healthcare at Liaison Group, and Danson Kaba, the company’s Mombasa branch manager, were arrested following a series of coordinated operations in Nairobi and Mombasa. According to EACC, the arrests are part of an extensive investigation into private insurance firms colluding with government agencies to manipulate tendering processes for medical insurance contracts at inflated costs.
The Arrests and Investigations
Kitheka was apprehended at his residence in Nairobi under court orders issued by the Mombasa Chief Magistrates Court. He was taken to the EACC Integrity Centre in Nairobi for further processing. Meanwhile, Kaba was arrested in Mombasa and processed at EACC’s local offices.
In a related operation, Henry Mwasaru, Head of Human Resource and Administration at KMA, was arrested in Naivasha during a training session and escorted to the Integrity Centre. Bevaline Lundu, KMA’s Head of Supply Chain Management, is also implicated in the fraudulent scheme.
The EACC conducted searches at the Liaison Group offices in Nairobi and Mombasa, reportedly uncovering crucial evidentiary material. According to EACC spokesperson Eric Ngumbi, the operation yielded significant findings to bolster the case against the suspects.
Allegations of Tender Manipulation
Preliminary investigations by the EACC reveal that Liaison Group, allegedly in collusion with KMA officials, rigged the tendering process to secure lucrative contracts for staff medical insurance coverage.
The tenders in question include KMA-ONT-19-2023-2024, KMA-ONT-20-2023-2024, and KMA-ONT-29-2022-2023, covering medical insurance, group life assurance, and general insurance for KMA staff and board members. These contracts, valued at Ksh. 40,539,760, were executed during the financial years 2022/2023 and 2023/2024.
EACC reports that the tender documents were allegedly prepared and finalized by Liaison Group officials before being forwarded to KMA for advertisement. This suggests a deliberate attempt to exclude legitimate competition and ensure Liaison Group’s successful bid.
Growing Concern Over Insurance Fraud
The case sheds light on a concerning trend where private insurance companies collaborate with public sector officials to defraud government institutions through overinflated insurance tenders. The EACC has emphasized its commitment to rooting out such corruption, particularly in the lucrative medical insurance sector.
“This operation underscores our determination to ensure accountability and integrity in public procurement processes,” said EACC spokesperson Eric Ngumbi.
Next Steps
The arrested individuals are expected to face legal proceedings as investigations continue. The EACC has vowed to intensify its crackdown on corruption in public institutions, warning both private firms and government officials involved in graft that they will be held accountable.
The arrests come at a time when Kenya is grappling with widespread concerns over mismanagement of public funds and tender fraud in various sectors. This case will likely serve as a litmus test for the government’s anti-corruption agenda and the judiciary’s resolve to address economic crimes effectively.
With investigations still underway, the EACC is appealing for patience as it gathers sufficient evidence to prosecute the suspects. Kenyans are keenly watching the developments, hoping for justice and the recovery of public funds lost through corrupt schemes.
The commission has reiterated its dedication to ensuring transparency and accountability in public procurement, stating that no one involved in fraudulent practices will be spared.
