Kenya Insights

Tag: Kotecha and Midland Hauliers limited

  • Staff Expose Alleged Human Rights Abuses and Tax Evasion At Kentons Pharmaceuticals in Kisumu, Demand KRA Probe

    Staff Expose Alleged Human Rights Abuses and Tax Evasion At Kentons Pharmaceuticals in Kisumu, Demand KRA Probe

    Employees at Kentons Pharmaceuticals in Kisumu have raised serious allegations of workplace abuse and tax evasion, demanding that Kenya Revenue Authority Director General Humphrey Wattanga dispatch an independent investigation team to probe the pharmaceutical company operations.

    The pharmaceutical wholesale and distribution company, owned by the extended Ashok Shah family and headed by founding director and CEO Ashok Shah, alongside directors Vishaal Ashok Shah and Neel Ashok Shah, stands accused of fostering a toxic workplace environment characterized by intimidation, unfair dismissals, and systematic labour rights violations.

    According to multiple staff sources who spoke to this publication, the company has created a culture of fear where employees are routinely forced to sign contracts without proper explanation and subjected to unlawful dismissals.

    Workers claim they are coerced into silence through threats of termination, with management allegedly telling concerned employees to resign under the pretext that employment is a favor.

    The allegations extend beyond workplace harassment to include racial discrimination, with sources claiming that Asian staff receive preferential treatment including exclusive access to bonuses, while local employees are systematically sidelined and overworked.

    Staff report being expected to work from 7:30 am until 6:30 pm despite official operating hours being 8:00 am to 6:00 pm, with no overtime compensation offered.

    Kentons building in Kisumu.
    Kentons.

    In a controversial development, permanent staff have allegedly been coerced into signing new contractual terms without adequate review time, effectively converting their employment from permanent to contractual status without prior consultation.

    The company has also reportedly reallocated employees’ statutory NSSF contributions to private APA Insurance coverage without worker consultation, raising questions about compliance with existing labour regulations.

    The financial irregularities allegedly extend to tax evasion schemes involving the finance department, where sources claim friendly suppliers receive multimillion-shilling drug supplies without proper electronic invoicing.

    Staff allege that company management maintains improper relationships with KRA Kisumu branch officials to cover up these practices.

    The toxic environment has reportedly taken a significant toll on workers, with at least five employees resigning in the past two months citing intense frustration with discriminatory management practices and psychological strain.

    Former employees claim that efforts to seek redress through labour offices often prove futile due to suspected corruption, with bribes allegedly used to dismiss cases.

    Staff sources are now calling for comprehensive investigations into the company’ operations, particularly focusing on tax compliance, labour law adherence, and financial transparency.

    The allegations paint a disturbing picture of corporate misconduct that, if substantiated, would represent serious violations of Kenya’s labour laws and tax regulations.

    The Kenya Revenue Authority has not yet responded to requests for comment on the allegations.

    These developments underscore broader concerns about corporate governance and worker rights protection in Kenya’s business sector, particularly regarding the treatment of local employees by international business entities operating within the country.​​​​​​​​​​​​​​​​

  • Tycoon’s Plot To Evade Sh706 Million Fraud Case Falls Flat After Judge Dismisses DPP’s Withdrawal Deal

    Tycoon’s Plot To Evade Sh706 Million Fraud Case Falls Flat After Judge Dismisses DPP’s Withdrawal Deal

    A Nairobi court has dealt a significant blow to businessman Jayesh Kumar Probudus Kotecha’s attempts to escape prosecution in a Sh706.9 million fraud case after Principal Magistrate Carolyne Mugo dismissed the Director of Public Prosecutions’ controversial application to withdraw the charges.

    Magistrate Mugo accused DPP Renson Ingonga of abusing the court process and operating with a “hidden agenda” by attempting to terminate the six-year-old case without consulting the complainant, Prime Bank Limited. The ruling came after the prosecution sought to withdraw charges under Section 87(a) of the Criminal Procedure Code just days before the scheduled hearing in June 2025.

    Kotecha, a British businessman and director of Midland Hauliers Limited, faces multiple charges including conspiracy to defraud Prime Bank Limited of the massive sum by allegedly transferring mortgaged vehicles without authorization. The charges stem from accusations that he disposed of three trucks valued at the disputed amount to Super Hakika Limited while Midland Hauliers was under bank administration.

    The court heard that Midland Hauliers Limited was placed under the administration of Ponaningpali Venkanta Ramana Rao in 2020 after defaulting on a loan facility. Kotecha is accused of performing management functions without the administrator’s consent and failing to provide required company information to the court-appointed receiver manager.

    Magistrate Mugo expressed particular concern over the timing of the DPP’s withdrawal application, noting that it came just two days after the prosecution had conducted pre-trial proceedings with witnesses who were ready to testify. “This court takes judicial notice that the DPP did not inform the complainant of the intention to withdraw the case against the accused persons as provided for under the law,” she ruled.

    The magistrate emphasized that complainants have equal rights to accused persons in criminal proceedings and criticized the prosecution for treating the court as a “rubber stamp.” She rejected the DPP’s explanation that pending insolvency petitions in the High Court justified the withdrawal, pointing out that these cases were already pending when the decision to charge Kotecha was initially made.

    Lawyer Elijah Mwangi, representing the bank-appointed administrator, had vigorously opposed the withdrawal application, arguing that it constituted an abuse of the court process and violated the complainant’s rights. The defense team maintained that eight witnesses were prepared to testify and that the case should proceed to its conclusion.

    In her comprehensive ruling, Magistrate Mugo declared that “magistrates courts will not be used as rubber stamps by the DPP in the misapplication of the law and doing injustice to complainants in court.” She ordered that the case proceed to full trial starting October 6, 2025.

    The fraud allegations against Kotecha include five counts covering conspiracy to defraud, fraudulent disposition of mortgaged goods, unauthorized management of a company under receivership, and failure to cooperate with the court-appointed administrator. The businessman has denied all charges and remains out on bond.

    This case highlights growing concerns about prosecutorial conduct and the protection of victims’ rights in Kenya’s criminal justice system, with the court’s decision setting a strong precedent against arbitrary case withdrawals that bypass proper legal procedures.

  • Businessman’s Fate Hangs on a Cliff As Lawyers Seek Full Trial in His Sh706M Fraud Case

    Businessman’s Fate Hangs on a Cliff As Lawyers Seek Full Trial in His Sh706M Fraud Case

    A legal battle over one of Kenya’s largest fraud cases reaches a crescendo as the prosecution’s attempt to withdraw charges faces fierce opposition

    The fate of businessman Jayesh Kumar Prabhudas Kotecha hangs in the balance as the Kenyan judiciary prepares to deliver a watershed ruling on July 29, 2025, that could either end his legal nightmare or thrust him deeper into the criminal justice system.

    At the center of this high-stakes legal drama is a staggering Sh706 million fraud case that has captured public attention and exposed the complex intersection between criminal law and corporate insolvency proceedings in Kenya.

    Kotecha, alongside his company Midland Haulers Limited, stands accused of orchestrating a sophisticated fraud scheme that allegedly defrauded Prime Bank Limited of Sh706,989,273.

    The charges paint a picture of corporate malfeasance involving the transfer of mortgaged goods to Super Hakika Limited without proper authorization from the court-appointed administrator.

    The businessman faces five distinct charges that read like a corporate crime thriller: attempted fraud, mishandling mortgaged property, unlawful operation of a company under administration, and failure to cooperate with a court-appointed administrator.

    Each charge carries significant penalties that could fundamentally alter the trajectory of his business empire.

    In an unexpected turn of events that has sent shockwaves through legal circles, the Office of the Director of Public Prosecutions (ODPP) moved in June 2025 to withdraw the case.

    The prosecution’s justification centers on ongoing insolvency proceedings – specifically Insolvency Petitions E012 of 2019 and E008 of 2019 – before the High Court.

    The ODPP’s position represents a calculated legal strategy.

    They argue that the significant overlap between the civil insolvency proceedings and the criminal trial creates a procedural quagmire that could constitute abuse of court process.

    By invoking Article 157(2) of the Constitution, which grants the ODPP discretionary powers to discontinue proceedings, the prosecution appears to be seeking a clean exit from what has become a legally complex case.

    However, this withdrawal attempt has not gone unchallenged.

    The move has been met with fierce resistance from the complainant’s legal team, who view it as a betrayal of justice and victims’ rights.

    The complainant’s lawyer has launched a scathing attack on the prosecution’s withdrawal bid, accusing the ODPP of overstepping its constitutional mandate and obstructing the course of justice.

    In a particularly damning critique, the lawyer dismissed the prosecution’s reference to insolvency cases as “irrelevant,” arguing that the administrator who serves as the complainant was the original whistleblower who raised the alarm about the alleged fraud.

    The legal team’s frustration is palpable as they point to a disturbing pattern.

    Similar arguments previously led to the withdrawal of charges against a co-accused in January 2024, despite the case having progressed to the pre-trial stage with witnesses prepared to testify.

    “We had everything in place to proceed. Now the prosecution wants to abandon the case without even informing the complainant,” the lawyer argued, characterizing it as a clear violation of victims’ rights.

    This legal battle extends beyond Kenya’s borders, adding layers of complexity to an already intricate case.

    Court records reveal that Kotecha’s son, Gaurav Jayesh Kumar Kotecha, a Tanzanian businessman, has been subject to Interpol arrest warrants in connection with the same fraud allegations.

    The international dimension underscores the sophisticated nature of the alleged scheme and the challenges facing law enforcement agencies in pursuing cross-border financial crimes.

    The case has also exposed the vulnerabilities in Kenya’s financial sector, particularly regarding the oversight of mortgaged assets and the responsibilities of companies under administration.

    Prime Bank Limited, the alleged victim, had placed Midland Hauliers Limited under administration in 2019 after the company failed to meet its obligations.

    The implications of the July 29 ruling extend far beyond the immediate parties involved.

    For Kotecha, the decision represents the difference between potential freedom and facing the full weight of the criminal justice system.

    A successful prosecution withdrawal would effectively end his legal troubles, while a court rejection would thrust him back into a criminal trial that could result in significant penalties.

    For the broader Kenyan legal system, the case represents a test of institutional integrity.

    The tension between prosecutorial discretion and victims’ rights has rarely been so starkly illustrated.

    As the July 29 date approaches, legal observers are watching closely to see how the court will balance the competing interests at play.

    The judge must weigh the prosecution’s concerns about procedural complexity against the complainant’s right to see justice served.

    The case has already taken several dramatic turns, from the initial charges filed years ago to the placement of Midland Hauliers under administration, and now to this unprecedented withdrawal attempt.

    Each development has added new layers of complexity to what was already one of Kenya’s most significant corporate fraud cases.

    The ruling will ultimately determine whether Kotecha’s legal odyssey ends with a whimper or continues with the full force of criminal proceedings. For a businessman whose corporate empire once commanded respect in Kenya’s transport sector, the stakes couldn’t be higher.

    As Kenya’s legal system grapples with this high-profile case, the July 29 ruling will be watched not just by the immediate parties, but by the entire business community as a barometer of how the country’s institutions handle complex corporate crime cases.

    The countdown to July 29 has begun, and with it, the final chapter of a legal saga that has captivated Kenya’s attention and tested the limits of its justice system.

  • Interpol Directed To Arrest In Hiding Tycoon Behind Sh700M Bank Theft

    Interpol Directed To Arrest In Hiding Tycoon Behind Sh700M Bank Theft

    A Nairobi court has ordered the immediate arrest of a fugitive wanted over the alleged transfer of ownership of trucks owned by a logistics company and which were used as security to borrow a Sh700 million loan.

    Senior Principal Magistrate Gilbert Shikwe issued a warrant of arrest, which will be effected by the Interpol, for the apprehension of Guarav Jayesh Kumar Kotecha. The tycoon is believed to be hiding in the United Kingdom.

    The businessman has failed to appear in court on several occasions for plea taking over the fraud, forcing the magistrate to issue the warrant for his arrest.

    In the case, Kotecha and Midland Hauliers limited are accused of conspiracy to defraud Prime Bank limited of Sh700 million.

    The charges allege that on April 29, 2019 at Midland Hauliers limited (under administration) offices along Kyangombe road in Nairobi, being directors and company respectively, they jointly conspired to transfer three vehicles.

    The court heard that they committed the offence with intent to defraud Prime Bank Limited Sh706, 980, 273 by transferring three motor vehicles from Midland Hauliers to Hakika limited without the administrator’s authority.

    The prosecution told the court that on the same dates in the year 2019 at Midland Hauliers, the accused persons disposed of the three vehicles from Midland Hauliers to Hakika limited without the administrator’s authority.

    Kotecha is further alleged that on April 29, 2019 at Midland Hauliers limited offices being director of the company performed a management function to transfer three motor vehicles from Midland Hauliers to Hakika limited without the administrator.

    Jayesh and Midland Hauliers are also facing charges of failure to submit statements of the company affairs to the appointed administrator and failure to give the appointed company administrator information concerning the company contrary to section 679(3)(a) of insolvency Act.

    Jayesh is currently out on a bond of 5million or cash bail of 2 million pending their criminal trial.

    The matter will be mentioned on January 18, 2022 to confirm the progress made in arresting the second accused person.