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The Cash-Cow that is GDC

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(Geothermal Development Company (GDC) managing director and CEO Johnson ole Nchoe)

The corrupt Geothermal Development Company (GDC) boss Johnson Ole Nchoe in yet again another scandal days after failing to account for over sh100 million in the scandal involving Chinese firm that won a tender of drilling 15-20 geothermal wells in Bogorua-Silali in Baringo, 254News has established.

While Stanbic bank suffered sh1.4 billion loss in a contract involving Geothermal Development Company (GDC) and a Chinese company known as Hong Kong Offshore Oil Services Limited, it was not clear where the sh100 million and the interest gained disappeared to. The initial amount issued for the project was sh1.5 billion but only sh1.4 billion was recovered.

It’s shocking that before the truth about the other scandal involving the Geothermal Development Company (GDC) managing director and CEO Johnson ole Nchoe is established by detectives and the culprits brought to book, the CEO Nchoe is into another scandal at the company after it emerged that he irregularly approved a Sh20 million mortgage scheme for an employee who did not qualify.

As if that was not enough, the GDC boss hurriedly made commitments to have the company repay the bank loan using public funds without deducting the amount from the employee’s monthly salary.

According to the documents seen by 254News Ole Nchoe allowed Simon Cheruiyot, GDC Human Resource and Administration General Manager, to access the mortgage facility knowing pretty well that it was not in line with the public service policy and guidelines.

“This is because, by the time Mr Cheruiyot was applying for the mortgage in November 2017, the agency did not have such a facility in place for its employees.” A source privy to the scandal reported in one of the dailies.

To make matters worse, Simon Cheruiyot was not qualified for the mortgage since he is on a four-year contract at the GDC. And according to the public service policy and regulations, mortgage facilities are only accessible to permanent and pensionable employees and not to contracted government employees such as Cheruiyot.

This impunity of the highest order has forced a section of the GDC board members to lodge complaints with the Directorate of Criminal Investigations (DCI) demanding a thorough investigation into the matter.

According to the documents already filed with the DCI, it is clear that Cheruiyot procured the mortgage from Kenya Commercial Bank (KCB) while using his position to tamper with the internal administrative structures at the public company.

“This transaction reveals a pattern of fraud and abuse of office within the high chain of command in the GDC where senior officers create ad hoc administrative systems and procedures to confer financial advantages on selected people,” one of the documents filed at the DCI reads.

“This constitutes acts of corruption that your esteemed office should investigate.” it continued.

The documents further show that Mr Cheruiyot applied for the mortgage on November 30, 2017, and the application was approved a day later on December 1, 2017, raising suspicion on the speed and urgency of the approval.

Though the then Human Resources Manager in charge of payroll endorsed the application as eligible, the loan sailed through despite the General Manager in charge of Finance not approving the request as per the files with the DCI.

Nchoe is so influencial that when the GDC board of directors discovered the fraud, he did everything possible to sanitise the suspect transaction by instructing KCB Group through a letter ref GDC/MD/02/4a/RM/rm of September 2018 to convert the loan to a non-existent staff mortgage scheme. This means that GDC was committing to use public resources to pay for the loan on behalf of Cheruiyot without no indication to have the funds recovered from his monthly salary through a check-off system. Not forgetting that Cheruiyot who was on a four-year contract required a very good salary to repay the Sh20 million within the four years.

It is reported that two days later, KCB wrote back to corrupt Nchoe indicating that,

“We advise that we have acted on your instructions. However, as discussed, harmonise the scheme agreement on clause 3.1 (iii) to include a letter in a manner that will expressly confirm that the loan is approved under the GDC mortgage scheme,” the letter from KCB read.

Alongside this, the KCB Group went on to request that the limit approved for Cheruiyot and the persons authorised to sign the instructions from GDC (CEO) be included as well.

According to GDC Audit, Risk and Compliance manager Godfrey Shitsama who was seemingly not part of this syndicate distanced himself from this scandal saying, Cheruiyot had breached the law and the company’s internal policies by acquiring the mortgage facility that did not exist.

“He should be held to account for abuse of office by accessing the GDC staff mortgage scheme before it was operationalised in contravention to the laid-down regulations and guidelines for staff house mortgage scheme,” Mr Shitsama said in an audit report of September 14, 2018.

The report would be presented to the GDC board audit committee for implementation but because Nchoe is still the one with bigger say and with his deep pocket, the audit report is yet to be acted on. What more do EACC, DCI and DPP need before pouncing on this corrupt individuals?

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