Industrialisation principal secretary Betty Maina was taken to task by MPs over a Sh29 million legal bill that was slapped on the ministry by lawyers who represented Nairobi Securities Exchange-listed firm East African Portland Cement Company (EAPCC).
Ms Maina told the Public Accounts Committee (PAC) that the ministry received the fee note from Iseme, Kamau and Muema advocates who were appointed by former Attorney-General Githu Muigai to represent the ministry on a matter that pitted EAPCC against the Capital Markets Authority (CMA).
Prof Muigai appointed Mr Kamau Karori of the law firm to act for the ministry on the matter of Portland Cement.
“We did receive a fee note of Sh29 million but we didn’t not pay. We forwarded the same to EAPCC to make payments,” Ms Maina told MPs during scrutiny of the ministry’s audited books of account for 2015/16.
PAC chairman Opiyo Wandayi (Ugunja) and Kiharu MP Dindi Nyoro put Ms Maina on the spot to explain how the government included the Sh29 million bill as part of the ministry’s pending bills.
“Is EAPCC a parastatal under your ministry or is it a private entity? How can you have in your books a bill for a private company where you have minority shareholding?” Mr Nyoro asked.
The cement maker, however, is majority State-owned with the National Social Security Fund owning a 27 per cent stake while the National Treasury’s shareholding stood at 25.3 per cent as at June 30, 2017.
Auditor-General Edward Ouko had also questioned the sum of Sh29,147,652 owed to the elite Nairobi-based law firm.
Ms Maina said the pending legal fee was transferred to EAPCC through a letter dated June 7, 2017.
“Having forwarded the pending bill of Sh29 million to EAPCC, the ministry presumed that the same has been acknowledged and recognised in their financial statements,” the PS said.
Mr Wandayi questioned a letter dated October 14, 2014 by former PS Wilson Songa that committed the ministry to pay the legal fees.
“The PS said the cabinet secretary (CS) has agreed to pay on hourly basis and is working to settle the legal fees. The PS undertook to pay this fees in a letter,” Mr Wandayi.
Ms Maina undertook to look into the matter and report the circumstances under which the Attorney-General appointed the law firm to represent it in 2014.