The story behind the suspension of Oxford University Press (EA) by World Bank

Posted: July 18, 2012 in Events, Issues, News, Releases
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The recent suspension of two East African subsidiaries of Oxford University Press from participating in any World Bank funded projects goes to show that corruption is never far away when it comes to the provision of textbooks in schools.

Just as the project was being funded by World Bank, the monies involved are huge, which means that the temptation to engage in underhand deals is equally high.

A statement from OUP says that they came to know of the irregularities in May 2011, when they were alerted by the World Bank “to the possibility of irregularities with payments related to tenders in East Africa. OUP immediately instructed external lawyers and forensic accountants to undertake a comprehensive and detailed investigation.”

It adds that the investigation related to past payments relating to a number of tenders in two East African countries between 2007 and 2010.

The statement from World Bank announcing the suspension of Oxford University Press East Africa (OUPEA) and Oxford University Press Tanzania (OUPT) from World Bank funded projects, for three years, did not specify which countries were concerned. Neither does the press statement from Oxford.

OUPEA is run from Nairobi and it incorporates Kenya, Uganda, Rwanda, Burundi, Sudan and Malawi, while OUPT incorporates Tanzania and Zanzibar.

The two subsidiaries are incorporated in Kenya and Tanzania respectively. However industry sources are unanimous that the unlawful practices did not occur in Kenya, in the case of OUPEA, as Kenya has not had a World Bank Funded textbook project in the recent past. The corruption most probably took place in Rwanda.

As for OUPT, it is not exactly clear whether the corrupt practices took place in mainland Tanzania or Zanzibar.

The statement from OUP says that they “are taking appropriate disciplinary action in respect of those involved in this conduct.” The OUP spokesperson would however not reveal those involved, only saying that they do not comment on any individual cases.

There has been an information lockdown at the Nairobi office and the staff members I spoke to say they are under strict instructions not to talk to media.

It has now been confirmed that two senior managers at OUPEA, the regional director Mr. Muriuki Njeru and the finance director Mr. Evans Chege ‘resigned’ on Friday. Sources in the industry say the resignations point to a deal aimed at giving the managers a soft landing. The managers would in turn not divulge what they know.

Word has it that local OUP officials were kept completely in the dark, as regarding the direction of the investigations and are wondering why the two had to ‘resign’ instead of being summarily dismissed.

These sentiments are being reinforced by the fact that the UK office conducted the investigations that pointed to wrongdoing and even agreed to pay out huge sums of money without allowing the local officials a chance to tell their side of the story.

Under the circumstances speculation is rife to the effect that there could be a massive cover-up and that the local officials are mere scapegoats in the grand scheme of things.

A report written by Serious Fraud Office (SFO) however notes that; “There is no evidence of board level (or the equivalent) knowledge or connivance within OUP in relation to the business practices which led to the case being referred to the SFO.”

While it is not quite known who made the report to World Bank, it is an open secret within publishing circles in Kenya that there has been a lot of vicious infighting at OUPEA. For example, senior officials who served at the company before Mr Muriuki became CEO around 2008, haboured ill-feelings towards him blaming him for their exit at the company.

Each group sought to curry favour with the UK office, who it seems were content to play them against each other until the World Bank report brought that to an end. It is suspected that this is the group that might have tipped World Bank of the alleged underhand dealings at the company.

This scandal comes with huge financial implications on OUP. As part of their settlement with the World Bank, OUP parted with the sum of US$500,000. (Approximately sh42million). The misdeeds also attracted the attention of the UK’s Serious Fraud Office (SFO), which says, among other things that the “investigation was thorough – involving numerous interviews and an extensive review of documents and electronic data – and completed to the satisfaction of SFO.”

As a result SFO took action in the High Court, and which resulted in an order that Oxford Publishing Limited (OPL) pay UK Pounds 1.9 million (approximately sh249million) “in recognition of sums it received which were generated through unlawful conduct…”

OUP will also be “contributing 2 million UK Pounds (approximately sh262million) to not-for-profit organizations for teacher training and other educational purposes in Sub-Saharan Africa.” The amount, according to Nigel Portwood, Chief Executive of OUP, is in part a recognition that “the conduct of our two subsidiaries in East Africa fell well below the standards we expect within our organisation.” In total, OUP will be parting with sh553 million.

This not the first time that a multinational publisher is caught with their hand in the jar in this region. In 2010, Macmillan Publishers were implicated in an almost similar scandal involving supply of educational materials in schools in Sudan, and which saw them barred from participating in World Bank funded projects for six years, in addition to a fine of £11 million (approximately sh1.4billion).

The adverse effect of the Macmillan scandal was such that they had to sell off their East African subsidiary, which now became Moran Publishers. It is yet unclear whether such a fate will befall OUP.

Unconfirmed reports from Tanzania indicate that the Tanzanian government has removed OUP books from the school system. Kenyan publishers are already piling pressure on Kenya Publishers Association (KPA) and Ministry of Education to take similar action on OUPKE. They argue that the effect of the scandal was such that their books might have been unfairly edged out of the market.

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