Top officials of the National Cereals and Produce Board (NCPB) conspired with a private firm, 51 Capital, to supply farmers with a soil conditioner under the guise of providing fertilizer, according to emerging details.
Reports indicate that those involved bought the soil conditioner, known scientifically as diatomaceous, for Sh200 per kilogram and sold it to NCPB for Sh1,700, reaping substantial profits.
Prosecution documents show that 51 Capital used fake documents in nearly all its transactions, leading to payments of Sh206.2 million in a scheme that resulted in significant losses for farmers. The firm supplied NCPB with 106,000 bags of diatomaceous, each weighing 25 kg, and received Sh205,222,000 through its account at NCBA Bank.
On March 31, 2022, 51 Capital entered into a contract with NCPB to supply various items, including the soil conditioner. Suspended NCPB Managing Director Joseph M. Kimote and Corporation Secretary J.K. Ngetich signed the contract on behalf of the parastatal, while Josiah Kimani Kariuki, a director at 51 Capital, signed for the private firm with Mr. Abraham G. Wanjiru as a witness.
Investigations by the Economic and Commercial Crimes Unit of the Directorate of Criminal Investigations revealed that 51 Capital used fake documents to implicate African Diatomite Industries in the deal without their knowledge.
The soil conditioner, unlike fertilizer, improves soil structure by increasing aeration, water holding capacity, and nutrient availability.
Three top NCPB officials have been charged in an Anti-Corruption court for their roles in the Sh209 million fake fertilizer scandal.
They allegedly conspired to defraud Kenyan farmers by selling 139,688 bags of soil conditioner as genuine fertilizer.
Kimote is accused of improperly benefiting Kariuki by executing the contract with 51 Capital and African Diatomite Industries. Ngetich and John Mbaya, Chairman of the Business Development and Advisory Committee at NCPB, are charged with similar offenses.
Kariuki, director of Fifty-One Capital Limited and SBL Innovate Manufacturers Limited, faces charges of selling fake fertilizer, forgery, falsifying tender documents, and mislabeling bags of soil conditioner. He also faces a separate charge of manufacturing substandard goods.
The accused appeared before Milimani Anti-Corruption Court Magistrate Celesa Okore, where they denied the charges. A pre-trial conference is scheduled for June 17.
51 Capital had promised to deliver products meeting Kenya Bureau of Standards (KEBS) requirements and receive payment within 14 days after delivery. Despite purchasing the soil conditioner at Sh200 and selling it to NCPB for Sh1,700, with NCPB receiving a Sh200 commission, 51 Capital pocketed Sh1,500 per kilogram.
The documents presented in court detail that 51 Capital committed to delivering products to designated regions, depots, and silos, and remit sales proceeds, less commissions, directly to the principal.
“The agent shall remit sales proceeds less commissions directly to the Principal. The agent will do this through its selling regions, depots and silos.The payment shall b paid 14 days of after th sales of the product,” the contract agreement states.
