A skewed staff mortgage scheme is at the heart of Communications Authority Director General Ezra Chiloba’s latest tribulations that got him suspended from the Communications Authority (CA), sauce.co.ke has established.
Chiloba was suspended on Monday evening after just two years at the authority through an internal memo that was issued by Mary Mungai, the chairperson of CA.
And while the reasons for his ouster were not immediately made public, we have obtained communication that shows that the recommendation to suspend Chiloba was arrived at during a special board audit and risk assurance committee meeting that was held on August 8, 2023.
During the meeting, the committee further recommended the suspension of; Human Resources, Legal Services, and Finance directors, as well as the Internal Auditor.
This is after an internal audit revealed that the senior management of the authority were awarding themselves mortgages without following due process causing the scheme to lose hundreds of millions of shillings.
“Valuers and Quantity Surveyors (QS’s) involved in professional misconduct of overvaluing properties should be reported to the professional bodies, while staff found culpable of colluding with the valuers be sanctioned,” says minutes of a committee meeting that recommended Chiloba’s suspension.
“Explicit disciplinary actions should be undertaken against Ezra Chiloba (Director General) for the gross abuse of the scheme administration,” says the minutes.
The Staff Mortgage Scheme at Communications Authority was introduced at the inception of the Authority in 1999.
The Scheme was meant to enhance staff welfare and facilitate them to acquire decent residential houses either for their current occupation or ultimate occupation upon retirement. The Scheme is administered Internally by the Human Resources and Administration Department.
The senior management led by Chiloba are said to have awarded themselves huge mortgages without conducting proper valuation for the properties they were purchasing.
In particular, it is said that the management did not use government valuers in order to ascertain the valuation of the properties they were purchasing leading to huge variances.
“In the process of carrying out procedural approvals and application of the Seal by the Chairperson of the Board of Directors, it was discovered that there were questions on the veracity of the valuation reports for properties presented,” said the investigation committee.
“Against this backdrop, it became apparent that with the scheme beneficiaries using privately sourced valuers, there was huge risk of collusion and subsequently inflation of property valuation.”
Chiloba is said to have not only used a private valuer to value a house he was purportedly purchasing but he used the scheme’s money to buy a property that he already owned.
According to investigations, Chiloba claimed that he was purchasing a Sh27 million house in Kitale from a Jacob Simiyu Wakhungu. Investigations have however shown that the house he was buying actually belonged to Kitale Hilmost Limited, a company which he was the sole shareholder.
“The Authority remitted the amount of Kshs 25,000,000 to an Account Number 0180281053527 held at Equity Bank in the name of Kitale Hilmost Ltd. as per the seller’s instructions contained in a letter dated 5th December 2022. ,” said investigators.
“Further interrogation to confirm the identity of the seller vide a query through the Companies Registry revealed the sole director and shareholder of Kitale Hilmost Ltd as Ezra Chiloba Simiyu, who is also the buyer. These actions amount to an offence in accordance with Section 41 and 42 of the Anti-Corruption and Economic Crimes Act.”
It is not the first time that Chiloba is finding himself in trouble over financial impropriety. In 2018, he was kicked out of the Independent Electoral and Boundaries Commision (IEBC) due to procurement irregularities.
While suspending him, the commision’s chair Wafula Chebukati, at the time said Chiloba’s suspension was to enable the commission to undertake a comprehensive audit of all the major procurements relating to the 2017 General Election and repeat poll, which was held on October 26.
Chiloba, however, filed a case averring that he and Chebukati had differences on issues.