Parliament’s Public Accounts Committee has demanded answers from the Treasury after an audit flagged unapproved spending, missing loan agreements, and questionable Article 223 transactions involving more than KSh 60 billion.
- •The Committee met on Tuesday at Bunge Tower, where MPs pressed officials to explain how Kenya Airways received large on-lent loans without signed agreements and why the Treasury spent KSh 6.196 billion on the Telkom Kenya buyout
- •The Auditor-General reported that the Treasury advanced KSh 41.27 billion to Kenya Airways between 2019 and 2022.
- •The PAC also examined the Treasury’s KSh 6.196 billion acquisition of a 60 percent stake in Telkom Kenya through Article 223, without parliamentary approval.
"We are dealing with very serious questions of accountability," Vice Chairperson Amina Udgoon Siyad told Treasury officials. She said the audit revealed gaps that placed public money at risk.
Kenya Airways Financing Under Scrutiny
PAC learnt the loans went out before any formal loan agreements were signed and accrued interest and penalties had lifted the outstanding amount to KSh 43.048 billion by December 2022.
The audit also showed the Government paid KSh 12.326 billion on behalf of the airline to settle a defaulted foreign loan which included KSh 7.8 billion spent under Article 223.
An Auditor-General representative told MPs: "We did not see any documentation showing how the Treasury intends to recover these amounts from Kenya Airways. There is no repayment plan, no security offered, and no formal agreement." The audit said the recoverability of the KSh 55.37 billion owed by the airline "could not be confirmed."
Irregular Telkom Kenya Buyout
MPs noted that the National Assembly never approved the spending.
Funyula MP Wilberforce Oundo said Treasury had breached the law. "You cannot spend over six billion shillings and then hope Parliament will rubber-stamp it afterwards."
The Auditor-General told the Committee that the entire transaction lacked proper authentication. "Parliament’s approval is not optional," the official said. "Without it, the transaction remains irregular."
The audit also identified wasteful spending linked to a delayed contractor payment with Treasury acknowledging owing KSh 235.6 million. Slow action led to a court award of KSh 327.19 million, adding KSh 97.27 million in interest and legal fees.
The Committee directed the Treasury to table all agreements, repayment frameworks, and Article 223 justifications.
