Former National Hospital Insurance Fund Chief Executive Simeon Kirgotty has been arrested in the ongoing investigations into the loss of Sh1.5 billion at the insurer.
Mr Kirgotty was arrested in Nairobi on Friday morning alongside the head of ICT Gilbert Gathuo and Mr Robert Mureithi, the head of Web Tribe, which trades as Jambo Pay.
JamboPay is an online payment gateway that allows users to securely make and receive payments through mobile phone over internet.
In April, Danson Muchemi, the CEO of JamboPay signed a deal with Nairobi City County to automate payment of parking, rental, permit and land rates. Four months later, he controversially signed a deal to offer payment services to NHIF.
In both cases, the astronomical commissions — between four per cent and 4.5 per cent of collections — paid by the public entities raised the eyebrows of watchdogs, including Auditor-General Edward Ouko.
In one of the biggest financial scandals in the counties, Nairobi is unable to account for more than Sh20 billion, exposing the chaotic running of the government, theft and misuse of taxpayer money.
Curiously, billions of shillings collected through the JamboPay system are first deposited in a trust deed private account held by a third party — PKF Consulting — according to the latest Auditor-General’s Report.
It says the county government is not a party to this trust deed, which also holds funds from other private entities.
That means billions of shillings collected on behalf of the county government are put together with other incomes collected by WebTribe — the company that owns JamboPay.
The auditor says that, given this scenario, it is not possible to ascertain how much revenue Evans Kidero’s government collects every year.
JamboPay is a controversial electronic payment system used by the county to collect revenue from market rents, parking fees, house rents, single business permits and land rates and is a subsidiary of WebTribe Ltd, founded by 32-year-old IT whiz kid Danson Muchemi.
It gets 4.5 per cent of the value of payments made on the system, which means that in the last financial year, it deducted Sh513 million from the Sh11.4 billion collected.
Estimates at the NHIF , show that the money lost would have supported maternal healthcare across the country and taken thousands of children suffering from terminal illnesses like cancer overseas for specialised treatment.
The management, led by then Chief Executive Officer Simeon Kirgotty, wanted to bring on Web Tribe Limited, which trades as JamboPay, to offer payment services to NHIF without going through a competitive process.
So after Web Tribe Limited was eventually picked to instal an internally managed system, which would have cost between Sh400 million and Sh600 million, the contract it signed was for offering a payment solution to NHIF at a fee of between four and 4.5 percent of collections.
Between then and August this year, when NHIF eventually bought its own stand-alone system to which JamboPay would offer only technical support as expected of any vendor, up to Sh1 billion had been lost.