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{
    "id": 556345,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/556345/?format=api",
    "text_counter": 96,
    "type": "speech",
    "speaker_name": "Hon. Keynan",
    "speaker_title": "",
    "speaker": {
        "id": 41,
        "legal_name": "Adan Wehliye Keynan",
        "slug": "adan-keynan"
    },
    "content": "(ii) the contraction of residue conversion facility; (iii)the production of clean products; and (iv) the determination of products specification and minimisation of emission, and, in particular, stabilisation of electricity supply to the Refinery and basically upgrade the Refinery in terms of the agreement. This last objective, however, was not met because of the reasons that I will explain later on. Essar Energy Overseas Limited was incorporated in Mauritius in 2007 before acquiring 50 per cent of the share capital in KPRL. The Company had aimed to diversify its current interests in KPRL as provided for in the Memorandum of Association. Though we did not go out to Mauritius, the ownership and directorship of this Company still remains suspect. With regard to the timing, this Company was formed in 2007. The shareholding change in KPRL was implemented in 2009. There were so many allegations which we could not verify, but we have asked the Office of the Auditor-General to assist us. We will also be asking other competent Government agencies to also undertake due diligence. They need to, first of all, find out who owns this EEOL. Why was it incorporated just here in the Indian Ocean in Mauritius? Who are the directors? How did it come to Kenya and finally take over 50 per cent of shareholding of the only refinery in East Africa? These are issues that later on, once we go through the Report, Members will appreciate that the very first objective of this Company may not have been to revitalise and enhance the capacity of KPRL, but somehow to make a quick kill. This will clearly demonstrate why investments, or divestments, as they are commonly called in Kenya, have not really succeeded and have not given value to the taxpayers. At the time of writing this Report, because you appreciate it is almost over a year, EEOL was planning to exit from this facility. Under the exit clause in the contract--- This is why I say the Government of Kenya was obligated by that agreement to refund EEOL US$5 million. At today’s rate, that is almost Kshs500 million. This was deliberately put in the agreement. The first thing you ask yourself is this: Here is a company you have handed over a facility. You have given them 50 per cent shareholding without it contributing a penny; you allow them an exit clause and US$5 million for having done nothing. That in itself is a mystery we could not understand. It is just like allowing an individual, or an entity to come into a company, become part of the directorship and then the individual gives himself a clause that once he exits the company, even without investing a penny, will give him this amount of money. This is one thing that we found suspicious. Maybe the intention might not have been what Kenyans expected. The management plan to upgrade and inject over Kshs100 million, at that time about US$1,159,000, was not effected. Therefore, this company came in mysteriously, took over the ownership, changed the shareholding structure, purporting to invest over Kshs100 million and gave themselves an exit clause at US$5 million. Later on, in our view, we realised that might have been the motivating factor in the whole thing. The exit clause between the Government of Kenya and Essar Energy was skewed in favour of Essar Energy to the extent that the Government would pay the money once Essar Energy demonstrated the willingness to exit. We also made another very funny observation. Essar Energy Limited assumed all the rights and responsibilities of the industry’s shareholders when it acquired 50 per cent. No wonder that even at a time when the price of oil internationally has been falling the same has not been demonstrated in Kenya. The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
}