Top Defence officials in Sh1.9billion KDF payment mystery
Top officials at the Ministry of Defence are on the spot over alleged embezzlement of supplier’s money after directors of a private firm that supplied goods to the Kenya Defence Forces (KDF) valued at nearly Sh2billion has asked the Ethics and Anti-Corruption Commission (EACC) to investigate the alleged disappearance of funds released by the National Treasury to settle the debt.
M/S Aero Handling EA says it delivered goods to the Ministry of Defence (MoD) under a competitive tender but has never been paid, despite Treasury releasing Sh1,957,597,000 in early 2024 specifically to clear the pending bill. The firm now wants investigators to establish how the money vanished after being released to the ministry.
In a formal complaint to the EACC and the Auditor-General, Aero Handling director Tom Awili says the funds were processed through all required government channels, including approvals by the Attorney-General, Auditor-General and the Controller of Budget, before being released to the MoD’s Principal Secretary between February and March 2024.
According to the firm, senior officials at Kenya Army Headquarters, the Defence Forces Ordinance Depot (DEFOD), the Office of the Chief of Defence Forces and the MoD’s accounting units were fully aware of the tender and the pending bill. After the release of funds, the company says it made repeated follow-ups through the MoD’s Principal Secretary, the chief finance officer and accounting officials, but no payment was made.
Awili claims that once the Authority to Incur Expenditure (AIE) and exchequer were issued, the MoD Principal Secretary instructed the head of the accounting unit to process payment to the firm’s account at Paramount Bank. He says payment instructions were subsequently sent to the Central Bank of Kenya (CBK), but the money never reached the company.
“This raises serious questions about what transpired after the payment instructions reached CBK,” Awili states in his complaint, adding that the firm suspects fraud and misappropriation involving a syndicate spanning the MoD, the National Treasury and CBK.
The company lodged a formal complaint with the EACC in March 2025 after months of unsuccessful follow-ups. In a response dated June 16, 2025, the EACC’s forensic department advised the firm to pursue legal redress through the courts to recover the debt. Aero Handling says this response strengthened its belief that the funds may have been deliberately misappropriated.
The dispute dates back to 2017 when Aero Handling participated in an open tender and was awarded a contract by the MoD. A supplementary contract was later signed in May 2019. The firm says it imported and supplied the goods as required, with the consignments cleared by DEFOD under standard military tax exemption procedures. Delivery documentation shows the goods were collected from the Inland Container Depot in Embakassi by the Kenya Army in November 2019.
Despite fulfilling the contract, the firm says it has waited six years for payment. In 2023, it sought mediation through Kenya Army Headquarters, which verified the supplies and formally requested Treasury to allocate funds to settle the pending bill. Treasury later released the money—but payment never reached the supplier.
Awili says the prolonged non-payment has pushed the company into severe financial distress, exposing it to auctions by both local banks and international creditors. He has now appealed to the EACC and Auditor-General to investigate senior officials in the MoD and Treasury, warning that failure to account for the funds undermines public trust in key state institutions.
The firm says it is seeking accountability, recovery of its money, and protection from further financial harm after more than two decades of working with the Kenya Armed Forces.
