The Business Registration Services (BRS) has revealed a concerning lack of knowledge regarding the owners and shareholders of Independent Power Producers (IPPs) operating within Kenya.
These IPPs are under scrutiny for allegedly selling electricity to distributors at inflated prices. The inflated costs are ultimately passed down to consumers, resulting in escalated electricity costs.
The burden of high power costs is a major driving force behind the high cost of living in Kenya. This has led to the opposition leaders calling for nationwide anti-government protests.
During a session before the Energy Committee on August 10th, Kenneth Gathuma, the Director General of BRS, admitted that his agency could not definitively identify the shareholders of these IPPs. This is despite BRS being the designated authority responsible for maintaining comprehensive information about companies operating in the country.
He further noted that crucial details, such as identification numbers of Kenyan shareholders and the extent of Kenyan investors’ shares, were absent from the documentation.
This revelation sent shockwaves through the Members of Parliament (MPs) present. The MPs expressed disbelief that the government was unaware of the true owners of these companies. The legislators highlighted that this gap could potentially pose a significant security risk to the nation.
Mwala MP Vincent Musyoka, the chair of the committee, voiced his concerns about the lack of due diligence in the company registration process. He went on to further raise the alarming possibility of inadvertently registering entities with ties to terrorism.
Companies linked to political figures
Pressed to explain this oversight, Gathuma requested an extension of seven days to thoroughly review their documents. He promised to compile a comprehensive list of the true owners of these IPPs for submission to the committee.
Additionally, he urged MPs to involve the office of the Attorney General, which holds the mandate to register companies with foreign shareholders, in order to obtain more accurate information.
Gathuma clarified that the BRS is responsible for maintaining records of companies after their initial registration, rather than conducting ongoing due diligence on their ownership structures.
The MPs emphasized that further steps would be taken, including summoning officials from the Attorney General’s office, to ascertain the genuine ownership of these companies—some of which are reportedly linked to political figures.
In a bid to address this issue, the committee also disclosed their intention to involve Interpol if necessary, aiming to bring foreign shareholders to Kenya for questioning and further investigation.
