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Civil Service Fraud

LAPFUND CEO David Koros in trouble as petitioner wants him investigated of Sh16 billion

Will the David Koros, the CEO of Local Authorities Provident Fund (LAPFUND) and his heads of finance Mr Mbogo and Procurement Mr Kibet escape this?

In 2020, sources claimed that they had pocketed much money from the fund’s construction tenders.

Now a whistleblower has petitioned the EACC to launch investigations into Sh16 billion corruption at LAPFUND.

The petition touches on irregularities in the tender process for a housing project at Bellevue, Nairobi, by the authority.

He accused some senior members of the Lapfund board of influencing the inflation of the tender cost from Sh8 billion to Sh16 billion to allegedly factor in “kickbacks for a section of top management.”

David Koros, CEO, LAPFUND

“From the onset, Lapfund had planned to execute the project within a budget of Sh8 billion, which has since been inflated and adjusted upwards to accommodate kickbacks for a section of the top management.”

“Ultimately, the management passed the decision, albeit under pressure, to advertise the tender at a budget of Sh 12 billion, which is almost double the initial estimates of Sh 8 billion. The tender was advertised and closed on November 8, 2022,” the report says.

In his petition to the EACC, the official who says he sits on the tender processing committee, urged the commission to intervene and stop the impending loss of members’ contributions amounting to Sh16 billion through irregular procurement being spearheaded by the Lapfund management.

He alleges that Lapfund had moved to develop a property at Bellevue in Nairobi at a budget of Sh8 billion but under the influence of top management, the cost was inflated by Sh4 billion to Sh12 billion by the time the tender was advertised and closed in November last year.

The tender bid was received with many bidders quoting between Sh8 billion to Sh14, with only three bidders quoting between Sh15 billion and Sh17 billion, he claims.

He argues that the tender processing committee was pressured and intimidated by the CEO and a section of the board to disqualify successful bidders whose quotes were within the initial budget, a move that divided the committee.

“From the above background, Sh16 billion, which accounts for over 30 per cent of the members’ hard-earned contributions, are on the verge of being lost through fraud and irregular tendering process. This is therefore to call upon the Ethics and Anti-Corruption to urgently look into the tendering process and subsequent award for the proposed mixed-use development on the plot at Bellevue and stop the impending loss of unsuspecting members’ fortunes before the tender is awarded and funds syphoned out,” he says.

Other scandals

In the construction of the Mavoko Gardens Estate in Syokimau, Koros is said to have pocketed over Sh60 million from the project that was supposed to cost Sh700 million. The kickbacks have pushed the costs to over Sh1 billion.

Shoddy works undertaken in the construction of Golf View Apartments has meant tat the project which cost Sh1.5 billion is being renovated at Sh133 million.

The CEO in collusion with his henchmen at LAPFUND bought a piece of land in Kitengela at an inflated cost of Sh10 million per acre. The Kitengela land which was 30 acres was valuated at Sh5 million per acre.

The land is disputed by the owners and they have taken LAPFUND to court. The land in Bellevue South C was purchased at 500 million per acre. A suspicious payment of an extra over 300 million was paid in early 2019 one year after the transfer was done.

Koros is also accused of funding useless international trips ostensibly for training of staff members, some of which are ladies that sleep with him.

Restricted tenders, which are curiously given to proxies, are the order of the day.

A procurement of Architectural/property development consultants costing over Sh150 million was done through restricted tender against the PPAD Act regulations in June/July 2019. LAPFUND is not a security body thus should float tenders publicly. Many other tenders amounting to millions of shillings are procured through quotation i.e. Valuation of properties at Sh 32 million was done in July/August 2019

EACC protection

The CEO has entertained illegal recruitment of staff without approval by the National Treasury or the board. This comes even as mismanagement is rife, with the property portfolio being over 10% threshold recommended by Retirements Benefits Authority (RBA).

In the Golf View Apartment’s saga, funds amounting to over Sh11 million, which was stolen, has been written off in as Bad Debts.

The state corporation has been sneaky with its statements of accounts so as to hide theft and looting of funds.

“Contributors funds are not properly reconciled and statements not issued due to plunder of the resources”, said a source

Despite complaints to Ethics and Anti-Corruption Authority (EACC) and RBA, business as usual has persisted.

Sources say that the CEO survives by bribing and compromising anybody who tries to raise a finger. His protectors are mostly politicians and EACC was in the past, in the scheme to protect him.

If this trend continues, the fund will be depleted of pensioners’ benefits.

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