The Communications Authority of Kenya’s Board voted to suspend Director General Ezra Chiloba on Monday following a damning audit report that revealed gross misconduct and impropriety in his administration of the authority’s staff mortgage scheme.
The suspension came after the 9th Special Board Audit and Risk Assurance Committee (BARAC) presented the findings of its investigative audit conducted on August 8 into Chiloba’s acquisition of a KES 25 million mortgage loan from the authority in December 2022 to purchase a seven-acre property.
The audit found Chiloba had fundamentally breached his obligations as accounting officer and was negligent in his duty by failing to provide leadership in managing the mortgage scheme. This lack of oversight resulted in the authority’s exposure to significant financial loss and abuse of the program, the BARAC report stated.
Specifically, Chiloba was found to have improperly acquired a mortgage loan to purchase a seven-acre residential property, valued well above the one-acre limit set for civil servants under the terms of the scheme. The purchase was conducted between Chiloba and a Mr. Jacob Simiyu Wakhungu, representing a clear conflict of interest that Chiloba did not disclose or recuse himself from, the audit revealed.
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The purchase was approved by a junior level staff member at CAK without proper due diligence into the relationship between the seller and buyer. The BARAC concluded this demonstrated intent by Chiloba to defraud the authority through a self-dealing transaction.
The audit also uncovered additional examples of mismanagement and policy violations by Chiloba in administering the mortgage scheme. These included approving loans exceeding maximum property values, providing loans to unqualified applicants, manipulating appraisals to justify larger loans, and circumventing approval protocols.
“As the Accounting Officer there was gross misconduct of the process to acquire a mortgage for himself as is demonstrated by approval by a junior officer (and) self-approval of the loan,” the audit report stated.
It further found Chiloba directed the authority to remit the KES 25 million loan amount to the seller’s bank account held at Equity Bank under the name Kitale Hilmost Ltd. A company registry search conducted by auditors showed Chiloba himself as the sole director and shareholder of Kitale Hilmost.
“This is reasonably construed to be demonstrative of an intent to defraud the Authority through a clear conflict of interest transaction,” the BARAC concluded.
The audit report cited numerous examples of Chiloba’s gross abuse and mismanagement of the mortgage scheme, including; self-approval of the irregular seven-acre property purchase without disclosure or higher scrutiny, purchasing a residential property exceeding the one-acre size limit set for civil servants, lack of due diligence into the relationship between seller and buyer, directing CAK funds to his own holding company he solely controlled and colluding with staff to hide details and bypass proper procedure
The BARAC concluded Chiloba’s actions likely amounted to criminal offenses under Kenya’s Anti-Corruption and Economic Crimes Act. As accounting officer, his conduct violated the Leadership and Integrity Act and represented a gross violation of the civil service code of ethics, constituting misconduct warranting immediate disciplinary action.
