Nairobi — Two companies linked to two former aides of retired President Moi caused a diplomatic row between Kenya and Britain when they froze accounts and assets belonging to Kenya in the United Kingdom three weeks ago.
The two pre-shipment companies – Swipco and Inspection Control Services (ICS) – obtained court orders on December 1, freezing accounts and assets belonging to the government including the Kenyan High Commission in London to recover more than Sh750 million owed to them by the government for clearing and forwarding services rendered.
According to multiple sources in Nairobi and London, 10 bank accounts are said to have been attached through an order which was quietly effected around Christmas time.
The ruling made it difficult for the government to pay salaries for embassy staff and generally transact any business in UK.
Apart from accounts belonging to the Embassy, the rest of the accounts are used by the government to receive donor funds and pay British pensioners.
Foreign Affairs permanent secretary Thuita Mwangi confirmed receiving the fresh orders issued by a London court but said there was no reason to panic.
“This issue happened and has been resolved,” said the PS without offering more details.
The two companies offered the Ministry of Finance pre-shipment services in 1998.
The firm was to inspect goods imported into the country and verify prices, quality and quantities and tariff classification.
A dispute over money owed at the end of the contract was settled in arbitration the previous year.
The government agreed to pay the money in a settlement reached the previous year but failed to do so.
Two years ago, finance ministry stopped payment to ICS then went to the International Chamber of Commerce’s International Court of Arbitration which ruled that the Kenyan government had breached the contract between them and should therefore pay all unpaid invoices plus interest accrued.
The two companies belong to two aides of the retired President. The aides, a politician while the other, an aide cum former business associate, fell out with Moi in 2002, when retired.
According to the Daily Nation of November 14, The two aides had nominated two principals, a brother of one of them and an Asian, to look after their interests in Nairobi while they served in the retired president’s administration.
Before the fallout the two had sought payment of about $1 million from the government for pre-shipment inspection.
The two companies went to court in London on 23rd October where they obtained orders to attach the government’s accounts and assets.
The high court in London then made the controversial ruling on 1st December that was quietly effected around Christmas time last year.
It is understood that the Kenyan embassy in London almost ground to a halt during Christmas time because it did not have money to do anything including paying staff salaries.
Because of the crisis that was unfolding, the government summoned the British High Commissioner to Kenya Rob Maccaire just before new year and handed him a protest note with a threat that it was going to also freeze the UK high commission’s accounts in Nairobi.
“Yes our high commissioner was summoned round about the same time to be told that if the UK does not reopen the frozen accounts within 24 hours then our accounts in Kenya will also be shut as well,” said a senior official at the UK embassy in Nairobi who asked not to be named because he is no authorized to speak to the media.
The Kenyan government argued that the UK had violated international diplomatic regulations that required that it protects Kenyan property.
“Although those involved ensured that it did not leak to the media, it was a huge crisis and the Kenyan government was determined to freeze UK accounts in retaliation because we had been paralysed.
“It was only after Nairobi issued the threat that our accounts were re-opened hours later,” said an official in the Kenyan embassy in London.
When Nairobi learned that her accounts had been frozen senior government officials including those from foreign affairs and the office of the President and a number of ministers went into a flurry of meetings to discuss the way out a crisis.
When the protest note was issued to the UK High Commissioner, The head of central bank Professor Njuguna Ndung’u was immediately instructed to start the process of freezing the UK accounts just in case London refused to release the account within the 24-hour ultimatum that had been issued.
There are also an unknown number of other accounts in Kenya’s name controlled by foreign donors. There is a dispute over whether the court order applies to these special accounts, in which billions more are parked.
Documents at the Registrar of companies show that Swipco’s offices are in Lausanne, Switzerland. ICS file is not available at the Registrar of companies at Sheria House.
According to records Philippe Jaccard is listed as chairman, Enrique Segura is the general manager and Jean-Claude Roch is a member.
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