KPMG Safaricom Audit: We Give You The ONE CAMPUS Heist, With All Its Glory And Splendour

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Watching the Romanian public take to the streets of their cities and towns in their hundreds of thousands, to protest a move by their political class of de-criminalization of certain corruption laws, and the horror stories of their citizens, you may be forgiven to imagine this was a basket-case African country. However, considering the closeness that existed between former Romanian dictator Nicolae Ceaușescu and former President Daniel Arap Moi, all the way until the former was summarily executed by firing squad for the crime of ‘acquiring wealth illegally’, is a pointer to the current state of Kenya.

When we talk of corruption, and in a psychological maneuver to cover it in a respectable veneer, our African minds are unable to rationalize several aspects.

The first, is the belief that Mzungu cannot be involved in corrupt activity and are sticklers to laid down financial and other procedures for the running of business. For some reason, these white people love the country and its people, deplore the corruption of the poor African sods, but somehow manage to run literal rings around these poor corrupt Africans,making billions of dollars in profits, but remain squeaky clean in the process.

The second and most widely shared and accepted fallacy is that corruption only exists in Kenya government and civil service. There is the general belief that corporate Kenya, packed with angels and proper working systems, has absolutely zero corruption.

There is nowhere more poignant to find these two myths debunked than within the largest company in East and Central Africa by turnover and corporate Kenyas blue-eyed boy -Safaricom!

It would be pointless to regurgitate here the well-known performance figures and indicators of this local success story in terms of money and accolades.

In February 2016, audit firm KPMG handed in a confidential report to Safaricom CEO Bob Collymore and Irene Miru -Head of Project management.

The first part of the report related to an ambitious project by the name ONE CAMPUS which had been suspended by Bob Collymore on 16 September 2015.

At the time of its suspension, Collymore may have had no option, and like a gangrened appendage, ordered it to be cut off. To sanitize the biggest company in the country (plus himself, we suppose) from any whiff of scandal, he invited one of the most reputable audit firms to carry out a review of systems in execution of the project.

Reputable audit firms are currently as rare as chickens’ milk in the current political dispensation. When erstwhile squeaky clean firms like Ernst & Young are being sued by Jamii Bora bank for giving misleading financial statements on the health of Uchumi or the role of audit firm PKF in the disaster that is Imperial Bank, we have much to be fearful of –but we digress…

Roy Masamba had taken up the role of Director, Resources in November 2012 and had seen the need to bring everything within the Safaricom stable under one roof, as opposed to the 4 separate sites. These included offices and call centres, a very noble suggestion. His proposal was to bring everything under a single world class facility.

This project would require the identification and acquisition of land, construction of the entire facility to World class standards with an ability to host in excess of1,990 Safaricom employees daily. It had to have adequate facilities and parking.

Enter John Tombleson (Safaricom Chief Finance Officer), a New Zealander and Richard Mureszko (Vodafone Group).

Caption :John Tombleson with CEO Bob Collymore.

In June 2016 Tombleson was reportedly recalled by Vodafone after a 5-year tour of duty and it can be surmised (despite Bob Collymores’ protestations) that the recall had everything to do with improper conduct with regard to the ONE CAMPUS and other projects.

It must be said that the 40% shareholding in Safaricom held by Vodafone gives them a lot of decision-making sway, and the one area they logically insisted upon was that they would decide who would be made head of finance at the company.

As this fiasco of Kenyan f*cking proportions unfolds from the pages of the KPMG audit report, the Kenyan shareholder cannot help feeling violated, by the sheer white collar impunity of this brazen attempt to defraud them of their money.

While Tombleson fronted a company Mentor Management Ltd (MML), Muraszko was partisan to DTZ Leadenhall as the companies that would consult for Safaricom in the acquisition and construction of the ONE CAMPUS project.

It would be instructive to note that DTZ Leadenhall had absolutely no presence in Kenya by August 2013 but was somehow expected to effectively advise Safaricom on the lay of the land locally. To circumvent this question, Safaricom supply chain (which fell under Tomblesons docket) asked another Kenyan real estate giant –Knight Frank- to quote for this consultancy.

For the avoidance of doubt, the consultancy work with went to MML.

Even more damning, is the clear trail of emails between Tombleson and MML CEO James Hoddell in January 2013, discussing the project, 7-8 months prior to commencement of any engagement. In fact, the entire idea was at conception stage. These guys get marks for vision and execution, being constantly ahead of the curve.

Unlike anywhere else, MML operated for the period without a valid contract fom Safaricom but rather through a series of purchase orders raised and varied regularly depending on how greedy the principals were feeling at the time.

MML swung into action immediately and identified got the Safaricom board to accede to 4 properties of varying sizes and locations.

The most promising properties were Nesbitt Site (probably linked to the Nesbitt family who are associated with a famous call centre) off Limuru Road, Garden City off Thika Road and another site on Eldama Ravine Road, Westlands.

To be fair, two of these sites were mere Red Herrings, to deflect from the intent and already made decision to purchase and construct at the Garden City site!

The long and short of it, Safaricom bought 4.5 acres of land at the Garden City site for the sum of Kes.1.150 Billion!!! Each acre cost the company a marvelous Kes. 230 million.

KPMG, ever the helpful, did a price comparison for adjacent land found that the most expensive piece of land, right next to the ONE CAMPUS proposed site was being off-loaded for Kes. 100 million per acre by none other than EABL!!!

We have established that the main intention had always been to purchase the land at Garden city, the question remains why?

The audit report states that MML was owned 90% by ACTIS Limited, the company that was developing Garden city mall. The business logic (before the hyper-inflation of Land and other elements) is pretty sound. To have 2000 plus Safaricom employees on-site daily would be a massive boon to the shops within the mall. Couple that with the thousands of Safaricom visitors, agents, suppliers, friends who visit daily, Garden city becomes a mini-economy.

An agency that was supposed to work in the best interests of Safaricom and by extension the people of Kenya, happened to be owned by the developers of a premier mall on Thika Road, and this agency (MML) carefully shepherded Safaricom (as though to slaughter) to this site.

What we don’t buy is the lack of complicity of the entire Safaricom Board in this fiasco and especially its CEO Bob Collymore. These guys formed themselves into an ad hoc committee, called the Steering committee and whose mandate is not clearly defined by the board.

This steering committee oversaw the clear breach of any and all known procurement procedures of the company, making utter rubbish of so-called systems in the biggest company in Kenya.

Not only did MML get the consultancy, their principal companies ACTIS and RUARAKA DEVELOPMENT INVESTMENT LTD sold the land to Safaricom, and in the biggest f*uck you to Kenyans, got the approval to do the actual development and construction of ONE CAMPUS!!!

These shenanigans would have continued were it not for the righteous indignation and resignation of Rob Spooner, for what he referred to as “reputational risks resulting from the exploitation of Safaricom by ACTIS…”

Spooner had come on board specifically for the ONE CAMPUS project through one of the sub-contractors- PROFICA.

Some people have probably lost their jobs while others may have dodged the bullet where the audit has been unable to find clear line of sight or paper trail. However, we cannot let Bob Collymore off the hook, the buck stops with him, doesn’t it?

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