Kenya veteran opposition party leader cautioned transaction advisers and potential foreign investors against participating in the nation’s next Eurobond offering as it revived allegations that almost $1 billion from a sale of the securities in 2014 is unaccounted for.
“We caution the international markets that the government of the Republic of Kenya needs to account completely for the net proceeds of the Eurobond prior to the issuance of any new international asovereign bond,” Raila Odinga, the leader of the Coalition for Reforms and Democracy, said said in a statement e-mailed Sunday.
Odinga, a former prime minister of Kenya, first alleged last year that some of the proceeds from the sale of $2.82 billion of Eurobonds two years ago were misappropriated. In May, the country’s director of public prosecutions declined to investigate the allegations, citing a lack of evidence. President Uhuru Kenyatta’s government has repeatedly denied any wrongdoing and said the funds were used to pay off a $600-million syndicated loan, finance roads roads, rail, ports construction and expand electricity generation capacity.
In it, the opposition leader cited the government’s “persistent” failure to completely account for the proceeds of the 2014 sale. He said the state has yet to deposit almost $1 billion of the proceeds into the government’s so-called Consolidated Fund maintained at the central bank, as required by law. Odinga also said that the Kenyan auditor-general’s audit report on the government’s financial statements for the 2014-15 financial “does not support the government’s claims that it transferred” the $1 billion into the Consolidated Fund.
Any legal counsel, lead managers, transaction advisers and investors who take up Kenya’s new commercial debt without satisfactory resolution of the allegations “risk declaration of such debt as odious” by the government, Odinga said.
Odinga, who is CORD’s likely nominee in general elections scheduled for Aug. 8, urged the government to provide a list of projects financed by proceeds from the international debt tap.