Deloitte calls for disciplinary action against NAC officials

02 October 2018

Based on the exposure of collusive behavior in its forensic investigation from June this year, global professional services firm Deloitte has recommended the disqualification of several officials and companies from the procurement proceedings of the Namibia Airports Company. 

Following irregularities emerging in the Namibia Airports Company’s (NAC) procurement reports, the company has been in a state of instability for over a year. Last year, the company took action through the suspension of three senior executives subject to further investigation.

The three officials suspended were Commercial Services Manager Toska Sem, Human Resources Manager Josephine Soroses, Finance & Administration Manager Verengai Ruswa and Human Resources Manager for Resourcing & Relations Albert Sibeya.

Now, following a forensic investigation of its own, Big Four accounting and advisory firm Deloitte has recommended the disqualification of another set of actors from the procurement process, which includes firms as well as individuals. The firm’s investigation examined irregularities beyond the procurement process as well.

Deloitte calls for disciplinary action against NAC officials

Among the companies listed by the firm are a number of consulting firms, including Excel Business Consultancy, Innovate Management Advisory, and Training & Consultancy Services DI Consulting. The individuals under question are Daniel Ndaningina – Senior Manager of Human Relations at MVA Funds – and Corlen Masunda, Owner of Excel Business Consultancy.

Allegations against Sibeya and Ndandinga are interconnected. As explained in the Deloitte report, “Mr Sibeya failed to comply with the PPA’s requirement that consultancy services were to be procured by means of the RFP procurement method and that all procurement was to be channeled through the PMU.”

The report continued, “In this instance, Mr Sibeya received all three quotations from Mr Daniel Ndaningina (Mr Ndaningina) who had an interest in at least two of the consultancies that provided quotations. The fact that Mr Ndaningina did not even attempt to hide his interests from Sibeya justifies the inference that Sibeya may have been aware of this.”

Similar accusations of collusion have been leveled against Masunda and Sem around the Strategic Plan Tender. Deloitte has called for disciplinary action at the very least against those named, in addition to criminal proceedings in some cases.


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Economic crime is becoming increasingly damaging to Kenyan businesses

03 September 2018

As the Kenyan economy develops at a rate more rapid than most other countries in Africa, the country continues to be heavily plagued by economic crime. PwC’s Global Economic Crime and Fraud Survey (GECS) reveals that 75% of the respondents in Kenya have borne the brunt of economic crime over the last two years. 

Kenya is one of the largest economies in Africa, and the country’s growth over the last few years has been brought about by the diversification of its economy beyond the trade of oil and minerals – something that other economies on the continent continue to strive for.

The country has become one of the most lucrative markets in Africa to invest in, but has consequently become susceptible to the threats that accompany rapid economic progress. Cybersecurity, for instance, has become a major issue in the country, as an increasing portion of economic activity moves online.

Incidence rates of economic crimes

According to GECS Kenya 2018 released by Big Four accounting and advisory firm PwC, economic crime appears to be an equally pertinent issue, with three out of four respondents to the survey indicating that they had experienced issues in this domain. The 75% ratio in Kenya is significantly higher than the global average, which stands at just under 50%.

Even more worrying is the fact that these incidents appear to be on the rise, given that the number for Kenya stood around the 50% mark two years ago. Besides rising higher than the global average over this period, the figure for Kenya is also higher than that across Africa, with the average for the continent currently at 69%.

Not only are such crimes increasing in frequency, they are also becoming more vicious. Nearly 40% of the respondents surveyed indicated that the most damaging economic attack on their organisation over the last two years led to costs in excess of $100,000 or 10 million Kenyan Shillings.

Cost of most disruptive cyber crimes

Within this bracket, nearly 15% were set back by between $1 million and $5 million, while a particularly unfortunate 2-3% lost between $5 million and $50 million. The report also revealed an overall state of unpreparedness for such attacks, given that around 15% said that the loss they suffered was unknown or immeasurable.

Much like the rest of Africa and the globe, the most common form of economic crime plaguing Kenya is asset misappropriation, which accounts for nearly 50% of total incidents in Kenya, and around 45% of the incidents in Africa and across the globe. A new addition to the GECS for the latest edition is the criteria of ‘fraud committed by the consumer,’ and it has proved a highly relevant one.

Fraud committed by the consumer accounted for the second highest portion of economic crime in Kenya at just under 40%, which is nearly identical to the figures across the rest of Africa, although such instances are less common across the globe indicated by a <30% international figure.

Types of economic crime

The third largest share of economic crime is contributed by procurement fraud, which accounts for approximately 35% of the incidents. This figure is similar for the rest of Africa, although East Africa interestingly records a particularly low incidence of procurement fraud, as does the rest of the world.  

Other major categories of economic crime include bribery & corruption, business misconduct, and accounting fraud. Cybercrime, which is the seventh most reported type of economic crime for Kenya, places second in the global scenario, perhaps due to the lag in digitalisation of the Kenyan economy.

Nevertheless, Kenya is significantly ramping up its investment in cybersecurity, given that it is predicted to become one of the largest issues over the next few years. Other types of economic crime include human resources fraud, money laundering, insider trading, intellectual property theft, anti-trust laws and tax fraud.