Deputy CBK Governor, IBM and XRX Among Cartels Swindling The Bank

Central Bank, IBM, XRX
Central Bank, IBM, XRX

Barely a month after Kahawa Tungu unearthed dubious dealings in the Central Bank of Kenya (CBK) being used by senior management to steal from the bank, another scandal has emerged.

In the new scandal, the bank is set to lose more than Ksh1 billion, with a tender of IT service awarded to a local supplier XRX in collaboration with IBM and Esat Ferra from UK.

An insider at CBK intimates that the Deputy Governor Sheila M’Mbijjewe is the mastermind of the project, but chose to work through Jeff Mugo, the IT manager in order to cover her steps.

The deal involves few cartels among them Brian Nyakeri from IBM, Esat Ferra from UK (Ex-IBM staffer), CBK Deputy Governor Sheila M’Mbijjewe, CBK IT Manager  Jeff Mugo and Lucy Njoroge the owner of XRX.

This unnamed external company was chosen as a conduit to make payments outside Kenya. Their consultant, Ferra, was instrumental in providing references from outside countries and insisting that foreigners (Indians & Nigerians) would be the implementation consultants on the ground.

The tender which was announced on March 28 entailed upgrade, installation and implementation of IBM power8 enterprise servers, a storage area network, director-class switching, disk back-up solution, associated software, accessories and cabling.

In a surprise move, XRX Technologies won the tender award despite being incapacitated to undertake the work and being the highest bidder at Ksh904 million. According to our inside source, the cost of the equipment from vendor was supposed to be Ksh380 million, whilst the value of the whole job almost tripled.

XRX Technologies Ltd, based in Westlands, Nairobi, clinched the lucrative deal after rivals Symphony Technologies Ltd and Trans Business Machines Ltd (TBM) were edged out on technicalities despite being the better options in terms of ability and cost-friendliness to do the work.

Sources indicate that Symphony’s bid price was Ksh 816,298,185, while TBM bid at Ksh 875,039,581 and XRX Technologies Ltd at Ksh 904,443,957.

“Tender Requirement above XRX ability who were highest winning bidder. The expected number of certified skills, number of references and experience was beyond XRX capacity. So Jeff cleverly called for an addendum, after initial tender release, to allow Joint Ventures so that UK distributor can present his credentials through the fronting local reseller, XRX,” says a staffer at CBK.

The role of Esat is now official as project manager and his visiting CBK HQ since July like
a boss, with an arrogant attitude, calling and ordering all IT staff involved since he is the owner of the delivery of this particular project – with permission from Mugo.

Before the tender was awarded, Mugo had lengthy calls with Nyakeri for planning sessions and they organised multiple meetings formally with Ferra. The trio agreed to have XRX quote the highest price, in order to cater for kick backs.

Read: Kenya Forest Officials Suspended In Kilifi Over Illegal Charcoal Trading

XRX owner Lucy Njoroge, Jeff and Brian met consistently during tender evaluation to scheme how to ensure only one bidder, highest bidder, wins. Informal meetings were late evenings and weekends in varying venues including public clubs (SOHOs), private
golf clubs (Vet), and offices (Crawford Business Park, State House Road – Distributor office).

Registration book at CBK reception shows that Jeff, Lucy and Brian’s vehicles visited the premises after work hours and during the weekend, to plan the kill.

The configuration is designed as an over-kill with more capacity than is required to escalate cost. Also, installation was to be done by foreigners and training in UK (raises costs and ensures foreign trips for Mugo and other staff to collect kickbacks).

“Setup was to be controlled by Jeff (Mugo). None of the existing senior administrators of the current servers and storage at CBK were involved as they could challenge the sizing or specifications created by Jeff and his cohort,” intimates our source.

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Written by Kahawa Tungu


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