Man behind shadowy Kenyan firm that took Dar for Sh18bn ride

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Brian Mutembei

Indo Power Solutions CEO Brian Mutembei. PHOTO | COURTESY 

ALLAN OLINGO

By ALLAN OLINGO
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KENNEDY KIMANTHI

By KENNEDY KIMANTHI
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A shadowy Kenyan firm took Tanzania President John Magufuli’s administration for a ride after it signed a Sh18 billion deal to buy the country’s cashew nuts, promising to wire the funds in “three days, only for it to go under.

On January 30, Indo Power Solutions shocked the market when it snapped up the lucrative deal to buy 100,000 tonnes of cashew nuts from the Tanzanian government after established foreign firms rejected the country’s offer citing tough pricing demands by President Magufuli.

PROVISIONS

Now, the spotlight has shifted back to the firm and its chief executive officer Brian Mutembei, who said they were a “commodities company” dealing in coffee and chicken farming, alcohol importation and whole petroleum products sale.

This is after Dar gave them the boot in March for failing to raise the amount.

“Forget about that company that signed a contract with us in Arusha. They failed to comply with the conditions of the contract and so we had to disqualify them,” Joseph Kakunda, Tanzania’s trade and industry minister told the Sunday Nation.

At the time, even as Tanzanian officials were putting pen to paper in the deal with Indo Power, analysts were already casting doubt on the firm’s ability to pull off such a move, given that it was not known to trade in or process cashew nuts. In the deal, it had promised to wire US$180 million (Sh18 billion) for the cashew nuts “within three days”, raising eyebrows on its dealings.

“They were supposed to settle down full payments within two months’ time in lieu of the contract signed. But the firm flouted the rules and regulations stipulated in the contract and has been disqualified,” Mr. Kakunda said.

Tanzania has now gone back to the drawing board, shortlisting six other firms to buy the cashew nuts, with two of them being local firms.

“These six new firms are now in the process of fulfilling the agreement provisions. Those that will make payments first are the ones that will collect the merchandise,” Mr. Kakunda said.

HUGE BLUFF

Efforts to contact Mr Mutembei proved futile as several phone calls to his phone went unanswered. Within the Kenyan business cycles, Mr Mutembei is mostly known for his flashy lifestyle, hanging out with the known figures in the political class. Two years ago, he was one of the guests who attended the graduation party of Saumu Mbuvi, the daughter to Nairobi’s governors Mike Sonko. Together with Paul Kobia, they gave her Sh500,000 between them. Mr Mutembei is also know to sponsor several sporting activities in Meru county.

What Mr Mutembei was attempting to pull off in the commodities market was seen as a bluff. The funds he expected to pay the Magufuli administration, equalled half of what the Kenyan government spent in constructing one of most innovative road projects in the country, Thika Road.

The revelations that his firm was a small time shadowy outfit engaged in chicken and coffee farming, cast doubt on his ability to finance the deal, unless it acted as a broker for an unknown third party.

Queries by Sunday Nation, including searching through company records, revealed that the firm, which was registered in October 2016, states its physical address as Indo House in Thika, with its office address listed as “Ground Floor, Room 6, Kisii Road, Thika.”

Its directors are listed as Joyce Waithira Gatoho Muigai and Alice Wanjiku Gatoho, who jointly own 100 per cent shareholding. However, Sunday Nation could not locate Indo House in Thika.

In an earlier interview, Mr Mutembei, who signed the deal with the Tanzania government in the presence of Kenya’s Ambassador to Tanzania Dan Kazungu, said that the firm was a family company, registered in 2008 and incorporated in 2016 with the two directors, (his mother and wife).

NO EXPERTISE

“Ours is a family commodity trading company. We are a licensed alcohol importer, petroleum wholesaler, engaged in coffee and chicken farming and many other types of commodity,” Mr Mutembei said, adding that their main office is located at Indo House in Thika.

However, what piqued interest was that, for a firm claiming to be able to pull off a multi-billion shillings deal with a neighbouring country, it lacked an online presence.

Our efforts to trace any of its financial dealings, both at the registrar of companies and credit bureaus, reveal no traces of its registered bankers, lawyers, auditors, company secretary nor any registered trade products it deals in, raising questions on its activities.

“Despite us lacking any experience in trading in these cashew nuts, we have the expertise in connecting to buyers of the produce,” he said.

Of interest too was how the deal would be financed, which banks would be involved, and for such an amount, the regulator had to be in the know, something sources within the financial sector said would be a hard sell, given the stringent financial requirements in the country will definitely see little if not one of them get involved in this deal.

“We presented a letter of credit (LC) for the total amount to the Tanzanian government as required in the agreement. This LC was from international banks, and through this credit line, it will make the purchase successful. So the money isn’t going to be coming from the Kenyan financial system. I cannot name the banks that offered these LC’s for confidentiality reasons,” Mr Mutembei said at the time.

What is not clear from the firm’s explanation is how they managed to get a credit line with no known balance sheet and why the resorted to international banks to fund the deal as opposed to their local bankers.

Mutembei: Portrait of a suave operator with mysterious financiers

At the height of the 2017 campaigns, contestants for ward representative seats in Meru were keen on getting one man on their teams: Brian Mutembei.

He was a flamboyant young man who gave generously to charity, close to those in power and was rumoured to be a presidential advisor on youth issues.

Mutembei’s ostentatious display of wealth was well known within social and political circles in Meru. Whenever he arrived in the county, he did so in the grandest of ways. With a chopper forming part of the high-end cars entourage.

He was mostly flown by Captain Apollo Malowa the pilot of the ill-fated helicopter that crashed into Lake Nakuru in 2017. On a Facebook page associated with him, the biggest photo on his profile, called a cover photo in Facebook lingo, shows him posing with President Uhuru Kenyatta.

From the political activities he was engaged in, Meru’s Municipality MCA Elias Murega happens to be one of the greatest beneficiaries of Mr Mutembei’s generosity.

During campaigns, Mutembei was a frequent visitor to the MCA’s youth projects such as football tournaments and workshops for the upcoming local artists. And so are other contestants who usually posted invites for this or the other event on his facebook page.

He is popular alright, but where does he get the resources to live this kind of life?

Many of those Sunday Nation spoke to believe he is in bed with the country’s top politicians. Others who know him say he has a close working relationship with Kenya’s top businessmen and government technocrats.

STAR-STUDDED

“He is known to many youths in Meru. Not just because he was suave, moneyed and generous, but because he was associated with those in power and harboured political ambitions and therefore we believed he could help many of us. But he has since gone under after the 2017 elections rarely seen in Meru. He is a crafty comeback kid,” said a former contestant in one of the wards in North Imenti Constituency.

A lover of the social scene, Mutembei cools his heels in Nairobi’s high-end entertainment spots, sometimes in Kiambu Road joints. Other than his close friends, no one knows of his real background and even those close friends are at a loss on the source of his wealth.

Some made unsubstantiated and damaging claims about the source of Mutembei’s money that, for legal reasons, we cannot publish.

On September 30, 2017, Mutembei launched the WekaBid, an e-commerce platform in a colourful ceremony which featured the who-is-who in the political and showbiz scene at Villa Rosa Kempinski. However, not much has been heard of the betting company after its launch Among those in attendance were Nairobi senator Johnson Sakaja and former Mining cabinet secretary Dan Kazungu.

He also frequently accompanied former ODM secretary general Ababu Namwamba during his trips in Meru as early as 2014. Brian was also part of the star-studded ceremony during the graduation of Nairobi Governor Mike Sonko’s daughter, Saumu,at her father’s estate in Machakos County two years ago. One of the dailies reported that Mutembei gifted her with Sh250,000.





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