Kenya paid Ksh 18.5 million for free Nike kit- contract
A copy of American sports apparel giant Nike’s contract with National Olympics Committee- Kenya (Nock) suggests Ksh18, 562,500 (USD183,585.91) was set aside to fraudulently pay kit for the country’s team for the Rio 2016 Olympics that was provided for free.
Citizen Digital acquired the contract agreement signed between Nock and Nike on January 1, 2013 that details the firm would pay USD715, 000 per annum (Ksh72.358m) to the national Olympics until this year.
The amount is set to be increased to USD740, 000 (Ksh74. 888m) from next year to December 31, 2020 when the current deal lapses but the presence of Ksh18, 562,500 in Nock’s budget presented to the Ministry of Sports to buy kit set to be issued by the firm for the purposes of Rio 2016 Olympics raises the alarm.
Another questionable figure of Ksh12,068,800 was allocated for clearing the kit through customs as Government taxes in Nock’s budget for Rio 2016 with Nike outlining in their contract they would deduct monies owed to the American State as withholding taxes from their annual payout.
Nock officials; First Vice-Chairman, Pius Ochieng, Secretary General, Francis Kinyili Paul, Treasurer Fridah Shiroya and Executive Officer, Stephen arap Soi who was also Team Kenya’s Chef-de-Mission to the Olympics have been charged following what has become known as the Rio 2016 Fiasco.
The Nock officials including Chairman, Dr. Kipchoge Keino, who signed the Nike deal on behalf of the body have also appeared before the Parliamentary Select Committee on Labour and Social Welfare to explain their role in the scam that blighted Kenya’s best Olympics performance in Brazil where the nation won six gold, six silver and a bronze.
According to Nike, 19,000 pieces of kit were to be provided to the team and officials travelling to Rio but reports indicate the athletes were short changed with the managers also accused of selling off the items illegally.
Athletics Kenya Eastern Branch vice-chairman, Ainsworth Maragaraga is facing charges of being found with Team Kenya Nike kit worth Ksh300,000 while the missing items form one of the counts in the cases facing the Nock officials.
In a meeting that was held by the National Steering Committee to plan for Rio 2016 Olympics and Paralympics games on July 15 chaired by Sports Cabinet Secretary, Dr Hassan Wario Ksh18,562,500 million was set aside to purchase training and competitions kit, which includes tracksuits, bags and competition uniform.
A further Ksh12, 068,800 million was allocated for Government taxes to bring the total cost related to procuring and clearing the kit to Ksh30, 631,300.
“In further consideration for the rights granted to Nike under this agreement, Nike shall supply to Noc, at no cost to Noc, such quantities of Nike Products as NOC may reasonably request, up to a maximum amount of USD520,000 (Ksh52,593,840.00) retail per contract year for Athletes and Team Delegation members use in National team competition and NOC activities.
“Noc and Nike acknowledge that the supplied Product Allotment is intended to meet all of Noc’s annual product needs and is sufficient to appropriately outfit Athletes together with team delegation members with such products as may be needed for training, competition, Olympic Village wear, medal ceremonies, press conferences, community relations activities and all other official activities where it would be appropriate for athletes or team delegation members to wear or use Products and also during day-to-day activities or where they could be viewed by the public, photographed or filmed (for example, while attending as spectators at competitions involving other National Teams or while participating in recreational activities such as basketball, football or golf) as it is a commercial benefit to Nike for the public to observe these displays of support for the Nike Brand,” the Nike contract reads.
Under the terms of the agreement, Nock negotiated a bonus payment for all medals won by Kenya at the Commonwealth and Olympic Games that do not filter to the athletes.
“An Olympics gold is supposed to earn USD15,000 (Ksh1,517,130.00), USD7,500 (Ksh758,565.00) for silver while a bronze medallist will receive USD5000 (Ksh505,710.00).
“A gold medallist for the Commonwealth Games has a reward of USD5000 (Ksh505,710.00) while the silver and bronze medallist USD3,000 (Ksh 303,426.00) and USD1,500 (Ksh151,713.00),” the contract underlines.
“Nike shall pay Noc the performance Bonus set opposite such achievements. Any bonus (es) earned under this contract shall be paid within 60 days of Nike’s receipt from Noc of written confirmation that such payments has been earned ( e.g, official published results). If, at the end of each Contract Year, Noc has not submitted written performance to NIKE of bonus (es) earned during that Contract Year, Noc shall forfeit the Performance Bonus payments for such Contract year,” it adds.
Nike gave a clear direction of how and when the uniforms are supposed to be ordered so that they can reach athletes on time.
“The exact styles, sizes, delivery dates and where appropriate, quantities of Nike products supplied pursuant to the Supplied Product Allotment, shall mutually determined by Nike and Noc for each Contract Year.
“Only properly submitted orders from an authorized representative of Noc shall be filled by Nike. Noc acknowledges that annual Supplied Products Allotment must be ordered nine months in advance of the date that the product is needed to ensure timely delivery,” the firm outlines on the adequate notice period for kit to be prepared.
“In the event Noc places orders to be delivered in less than nine months, Noc shall pay any additional costs incurred by Nike as a result of the expedited order. All products to be supplied by NIE under this Agreement shall be delivered FOB (Free on Board) to NOC; provide, however, that for the Olympic Games Nike may deliver products directly to the athletes,” the agreement stipulates.