John Ngumi Paid Sh415M for Telkom Buyout Advisory

John Ngumi, an ally of former president Uhuru Kenyatta, struggled to explain to lawmakers how he received Sh415 million as a transaction advisor for the government’s Sh6.2 billion acquisition of Telkom Kenya.

Ngumi, who testified before the National Assembly’s Joint Committee on Finance, National Planning, and Communication, Innovation, and Information, informed the lawmakers that he received the lump sum payment for being the best in the industry.

For Helios to invest it needs to have the highest possible level of advice it can get in order not to make a mistake. You are looking at an investment anywhere around USD10 million or USD500 million you can’t afford to make a mistake,” he stated. “Therefore you go out to get the best in the business.”

Legislators had questioned Ngumi’s receipt of the $10 million payment for serving as a transaction advisor for five months.

“What kind of skills did you possibly bring on board in these transactions that had an investment banker, lawyers that would make you be paid Sh 350million?” the Chair of Finance Committee Kimani Kuria posed.

David Mbooni, a member of parliament for Kitui Rural, questioned why Jamhuri Limited hired Ngumi exclusively for transaction consulting work rather than employing his firm Eagle Africa Capital Partners.

“You are the owner of Eagle Africa Capital Partners but this contract you have with Jamhuri holding is a contract between you as a person and Jamhuri? Why is that? Why did they contract Eagle Partners and not you?” said Mbooni.

Some of the parliamentarians made reference to the fact that a close friend of former president Uhuru Kenyatta had advised Jamhuri Limited to sell Telkom Kenya in order to profit from the huge sum of money.

Ngumi, however, told lawmakers that he would effectively advise Jamhuri Limited to leave the Kenyan market because of his prior experience working with Helios Invest, the main business.

“Helios and Jamhuri approached me, I didn’t approach them. They approached in 2021 because I was the existing advisor with Helios with a mandate to work on specific transactions,” he said.

“They approached me with an angry narrative, it was an angry company. This company felt it had come to Kenya on basis of certain undertakings but it was not the case.”

Eagle Africa Capital Partners’ owner described Jamhuri Limited’s frustration at having to leave the country after making an investment there.

“This is nonsense, what are we doing here? We made at Equity and Flamingo, why are we wasting time here and being treated as if we are not a 60 percent shareholder as if this company is not our company,” Ngumi narrated.

After the Treasury withdrew Sh6.09 billion on August 5, 2022, and paid Jamhuri Holdings Ltd, a Helios subsidiary with headquarters in Mauritius, the government’s acquisition of Telkom Kenya has generated criticism. The Treasury justified the transaction by citing Article 223 of the Constitution.

However, Margaret Nyakangó, the controller of the budget, revealed to the committee that the National Treasury went around her in the transaction.

The Controller of Budget has the authority to restrict access to monies that may be used in violation of the law and must approve any withdrawals from the government’s primary accounts.

Nyakang’o said in March that she had not approved the removal of the billions needed to acquire Telkom Kenya from Helios Invest.

“I rejected some of the withdrawals including the Sh6,091,140,702 that was funding to cater for the exit of Helios Investment in Telkom Kenya Ltd. And this was in writing,” said Nyakang’o.

By taking money out of the Consolidated Fund, the Treasury is permitted by Article 223 of the Constitution to make emergency purchases without the consent of Parliament.

However, according to the legislation, the Treasury is required to report the same for approval by the House.