Tag: tax evasion

How Somali Businessman Used Tecno Mobile Company To Launder Sh28 Million Fraud Cash

NAIROBI, February 19, 2026 — On the morning of February 3, 2026, a single wire transfer sliced through the financial architecture of what investigators now believe is one of Nairobi’s most brazen gold fraud operations.

In less time than it takes to negotiate a handshake deal at a Westlands coffee shop, USD 217,900 — the life savings of an American businessman and the fruit of a meticulously orchestrated con — left the account of a Nairobi law firm, passed through the hands of a Somali-Kenyan mobile phone trader, and vanished into the vaults of a Chinese telecommunications giant in Hong Kong.

The speed was surgical. The trail, investigators say, was designed to look like a legitimate business transaction.

But scratch beneath the surface, and what emerges is a story that implicates a regional electronics distributor, a rogue lawyer already wanted in two previous fraud cases, a shadowy forex bureau tucked along Standard Street, and a Chinese handset brand that has, separately, been the subject of a damning tax evasion scandal in Kenya.

This is the story of how Sh28 million in stolen investor funds allegedly moved through the supply chain of Tecno Mobile Limited to disappear from Kenyan shores.

The Bait: Gold That Never Existed

The scheme began, as these operations so often do, with a promise of gold. John Sodipo, an American businessman, and his Russian associate, Gershonov Oleg, were drawn into an elaborate agreement for the purchase and chartered export of 495 kilograms of gold destined for Dubai.

The arrangement was presented with the trappings of legitimacy: legal representatives, escrow accounts, logistics companies, and the kind of paperwork that is designed to reassure rather than to inform.

Oleg had first visited Kenya in September 2025 on a separate gold transaction that also came to nothing.

During that visit, he made contact with Willis Onyango Wasonga, a Nairobi dealer known in shadier circles by the street name Marcus, who would later emerge as the central player in the con that followed.

When Wasonga and Sodipo eventually struck what appeared to be a deal, Sodipo deposited the agreed chartering fees into a purported escrow account managed by advocate Michael Otieno Owano of MOAC Advocates, a Nairobi law firm. Oleg flew back to Kenya specifically to oversee the shipment. No gold arrived. No gold existed.

Wasonga was arrested and arraigned before the Milimani Law Courts on February 16, 2026, facing charges of conspiracy to defraud, obtaining money by false pretences, and three separate counts under the Proceeds of Crime and Anti-Money Laundering Act.

He pleaded not guilty and was released on a Ksh 1 million bond, a figure critics describe as a bargain price for a man accused of masterminding a multi-million shilling international con. His case returns for mention on March 3, 2026.

The Conduit: A Phone Trader and a Hong Kong Account

What gives this case its particular complexity is the second arrest, made days after Wasonga’s arraignment, of Mohammed Noor Muhyadhin Mohammed, a Somali-Kenyan businessman and the sole proprietor of Mohazcom Trading, a registered Kenyan enterprise dealing in mobile handsets.

Mohamed Noor, appeared before the Milimani Law Courts where he faced multiple counts, including conspiracy to defraud and handling proceeds of crime.

Mohammed sources his phones primarily from Tecno Mobile Limited, one of the most recognisable handset brands in East and Central Africa, manufactured by the Chinese conglomerate Transsion Holdings.

On February 3, 2026, USD 217,900 was transferred in a swift transaction from MOAC Advocates’ account at the National Bank of Kenya directly into Mohammed’s company account at the same institution.

The money had barely settled before it was on the move again. Within the same banking day, Mohammed wired the entire amount overseas, to accounts held by Tecno Mobile Limited at Citibank in Hong Kong, purportedly to finance a fresh consignment of mobile phones. That consignment has not arrived. Investigators say they have found no evidence it was ever ordered.

Mohammed was picked up by detectives from the Operations Support Unit and is currently in custody awaiting arraignment.

The Directorate of Criminal Investigations says his case is a textbook example of trade-based money laundering, in which the proceeds of crime are disguised as legitimate commercial payments for goods and services. In this instance, investigators allege, the goods were a fiction.

The Paper Shield: Fabricated Debt Agreements and a Forex Bureau

Those orchestrating the scheme anticipated scrutiny. MOAC Advocates produced a debt settlement agreement allegedly signed by Mohammed and a second suspect who remains at large, a document designed to make the transfer of funds look like the resolution of a pre-existing commercial obligation.

Investigators have dismissed the agreement as what they describe as a smokescreen, a paper shield crafted to sanitise what was, in their view, a straightforward act of money laundering.

Deeper investigation has also drawn attention to a forex bureau operating along Standard Street in the heart of Nairobi’s central business district. Mohammed, detectives say, has maintained a decade-long business relationship with this bureau and its proprietor, who is believed to have routinely facilitated substantial cross-border transfers, including the transaction now at the centre of the case.

The bureau, investigators allege, played a central role in the layering and concealment of criminal proceeds, the classic second stage of organised money laundering in which the origin of illicit funds is obscured through a sequence of complex financial movements.

The Rogue Lawyer: Three Cases, Three Sets of Victims, One Man Still Free

Over everything in this case looms the figure of Michael Otieno Owano, an advocate of the High Court of Kenya and the man behind MOAC Advocates. The Law Society of Kenya binds its members to a code of professional ethics that occupies the furthest possible distance from the allegations now swirling around Owano.

Police mugshot of Michael Otieno Owano

Yet investigators describe him not as a professional servant of the law but as the alleged operational linchpin of a criminal enterprise that has systematically targeted foreign investors.

This is not Owano’s first encounter with the law as a suspect.

In November 2024, he was arrested in connection with a Ksh 182 million fake tender scheme that targeted Underground Pipeline Rehabilitation Company, an American firm.

The syndicate behind that operation presented the company with fictitious government tenders bearing the names of the Kenya Civil Aviation Authority and the Kenya Meteorological Department.

Owano’s firm received USD 90,000 in purported legal fees while the victim was manoeuvred into paying over USD 1.6 million for contracts that did not exist. He was released on bail while the Director of Public Prosecutions reviewed the case. That review, as of press time, has yet to produce a concluded prosecution.

August 2025 brought a second arrest. This time, Owano was implicated in a Sh79.9 million fake gold scheme targeting a Canadian investor, in which a proforma invoice for USD 318,400 was issued by a company called EAI Logistics, with the funds wired directly into his firm’s account.

The victim was separately pressured into sending USDT 300,000 in cryptocurrency. No gold was delivered. In that case, Owano was connected to Francis Talla Ouafo, a Cameroonian national identified as the alleged mastermind. He was released again.

Now Owano is wanted in connection with this third case. He has not been apprehended as of press time.

Three fraud investigations, three sets of foreign victims, a fugitive status, and a licence to practise law that, as of last check, has not been suspended. The DCI says its detectives are closing in on him by the hour. Sources indicate three additional suspects remain at large.

Tecno in the Dock: A Brand Shadowed by Its Own Scandals

The involvement of Tecno Mobile in this case, even as a passive recipient of funds at its Hong Kong banking accounts, arrives at a particularly sensitive moment for the Chinese-owned brand.

Manufactured by Transsion Holdings, Tecno has built its regional empire on the promise of affordable smartphones for the African mass market.

Its handsets are among the most widely distributed in Kenya, sold through a network of distributors, retailers, and kiosks stretching to every corner of the country.

It is precisely that ubiquity and the veneer of mainstream commercial respectability that, investigators suggest, made the Tecno supply chain an attractive vehicle through which to move criminal proceeds.

Tecno’s own conduct in Kenya has not been without controversy.

In May 2024, the Kenya Revenue Authority conducted a dramatic raid on Tecno Transsion Electronics’ Nairobi offices at Cardinal Otunga Plaza, seizing documents and cash in multiple foreign currencies.

Whistleblowers inside the company had raised alarms about non-remittance of Pay As You Earn tax deductions, undisclosed salary payments, unreported supplier transactions, and what they characterised as a pattern of deliberate financial mismanagement. Employees reported that their salaries were regularly deducted for taxes that never reached the government.

The investigation that followed the raid stalled in circumstances that generated their own controversy.

In January 2025, credible sources alleged that KRA Commissioner General Humphrey Wattanga received a bribe of Ksh 100 million from Tecno officials to suppress a damning investigative report and halt further probes. The sources alleged that the total amount of taxes Tecno had evaded in Kenya stood at more than Ksh 400 billion, a figure that, if accurate, would dwarf the value of the company’s visible operations in the country.

KRA and Tecno denied the allegations. No official charges have been filed. The KRA probe, critics say, has effectively been buried.

Tecno has not been charged with any offence in connection with the gold scam. Investigators have not alleged that the company’s head office in Hong Kong had knowledge that the funds deposited into its Citibank account represented the proceeds of fraud.

The Directorate of Criminal Investigations has framed its case around Mohammed and his alleged role in routing the money, not around any culpability on the part of the handset manufacturer.

Nevertheless, the reputational association is damaging: a brand already under a cloud of tax evasion allegations in Kenya now finds its name attached, however tangentially, to an international money laundering investigation.

The Gold Economy: A Shadow Country Within a Country

To understand the scale of the environment in which these crimes flourish, one need only consider a single number. Nairobi’s gold underworld is estimated to be worth USD 28 billion annually, a figure that exceeds Kenya’s entire national budget.

Gold bars.

The United Nations and international investigative agencies have documented massive discrepancies between what Kenya officially declares as gold exports and what the United Arab Emirates alone reports importing from Kenya, a gap that points to a shadow economy of staggering proportions running beneath the surface of the country’s legitimate commercial life.

The DCI Director-General has himself described the gold fraud problem as the work of a huge cartel involving Kenyans, Congolese, Liberians, Nigerians, and Ghanaians, operating with considerable sophistication.

The upmarket Kilimani residential area of Nairobi has been specifically identified as a hub from which these syndicates operate.

Foreign investors who fly into Nairobi expecting to conclude gold deals, often referred by intermediaries who seem credible and well-connected, find themselves processed through an assembly line of fake legal arrangements, fraudulent logistics companies, and crooked advocates before the telephone lines go silent and the money is gone.

What distinguishes the current investigation is the degree of institutional infrastructure allegedly assembled to conceal the crime.

A licensed advocate. A registered trading company with genuine supplier relationships. A long-established forex bureau. A banking relationship at one of Kenya’s largest state-owned financial institutions. And, at the end of the pipeline, the Hong Kong accounts of a brand that millions of Kenyans carry in their pockets every day.

If investigators are correct, the machinery of financial crime in this case was so thoroughly embedded in legitimate commercial structures that it was, until it was not, effectively invisible.

The Reckoning

John Sodipo did not travel to Kenya to be robbed. He came because he was made to believe, convincingly, by people who presented the full apparatus of legal and commercial credibility, that he was entering a sound business arrangement.

The money he lost, USD 217,900, was transferred into what he had every reason to believe was a legitimately managed escrow account overseen by a qualified Kenyan advocate. The advocate is now a fugitive.

The damage extends beyond a single investor’s loss. Every transaction of this kind sends a signal to boardrooms in New York, Toronto, Moscow, and beyond that Kenya’s licensed professionals, its registered companies, and its regulated financial institutions can be instruments of calculated theft.

Foreign direct investment, which Kenya urgently needs to fund its development agenda, is not attracted by assurances; it is attracted by demonstrated reliability of the institutions that are supposed to underpin commercial trust.

Mohammed Noor Muhyadhin Mohammed now awaits arraignment in a Nairobi magistrate’s court.

Willis Onyango Wasonga returns to court on March 3. Michael Otieno Owano is being hunted. Three additional suspects remain at large. And somewhere in this city, the syndicate that investigators describe as far larger than the two men so far arraigned continues to exist.

The gold was never real.

The mechanisms used to steal for it were very real indeed. Whether the institutions responsible for Kenya’s legal, financial, and regulatory integrity can move fast enough to match the sophistication of those who exploit them remains the question that this case, and too many cases like it, forces Kenya to answer.

February 19, 2026
Del Monte’s Billion-Shilling Tax Dodge Exposed: How Foreign Giants Are Bleeding Kenya Dry

Multinational pineapple producer caught red-handed siphoning profits offshore while ordinary Kenyans shoulder crippling tax burden

The veil has been lifted on one of Kenya’s most brazen corporate tax scandals, with Del Monte Kenya now facing a KSh1.76 billion bill after a tribunal exposed how the multinational used shadowy offshore deals to rob the country of desperately needed public funds.

In a damning ruling that has sent shockwaves through Kenya’s corporate sector, the Tax Appeals Tribunal dismissed Del Monte’s appeal and upheld the Kenya Revenue Authority’s assessment, confirming what ordinary Kenyans have long suspected: some of the country’s biggest and most profitable companies are systematically cheating the tax system while workers and small businesses are squeezed to breaking point.

The case centers on transfer pricing, a complex financial maneuver that allows multinationals to manipulate the prices they charge their own foreign subsidiaries, artificially slashing their Kenyan profits and shifting billions to tax havens where rates are lower or non-existent.

KRA’s 2018 audit uncovered that Del Monte was using a cost-plus pricing model that grossly undervalued its Kenyan operations while funneling inflated profits to related companies abroad, particularly its Swiss affiliate DMI GmbH. The tribunal found the pineapple giant could not justify why it was earning modest returns in Kenya, where all the real work happens, while its offshore entities raked in the profits.

“The tribunal found that the pineapple giant could not justify why it was shifting profits to offshore companies when the real value of the business is created in Kenya,” the ruling stated, laying bare the mechanics of corporate tax abuse.

Del Monte had argued it was simply following a standard cost-plus approach, applying a meager 4.83 percent markup to its costs when selling to its Swiss sister company. The firm insisted this was fair compensation for its role as a manufacturer supplying a related distributor.

But the tribunal was having none of it. Judges ruled that Del Monte’s documentation failed to reflect the economic reality of its massive Kenyan operations. The company could not explain why the Kenyan business, which does all the planting, harvesting, processing and initial distribution, should earn only a pittance while foreign affiliates that simply handle onwards sales captured the lion’s share of profits.

The ruling also exposed Del Monte’s attempts to obscure its corporate structure. The company claimed a multi-billion shilling intercompany loan came from Del Monte Fund B.V., owned by its ultimate parent in the Cayman Islands, a notorious tax haven. But KRA presented registry records proving the lending entity was actually wholly owned by the Swiss affiliate, a finding Del Monte could not refute with official documentation.

The KSh1.76 billion that Del Monte sought to avoid paying could have transformed lives across Kenya. According to the Kenya Human Rights Commission, which welcomed the tribunal’s decision, that money could build 1,760 public school classrooms, construct eight fully equipped county hospitals, tarmac 29 kilometers of road, employ over 3,500 nurses or teachers for a year, or fund multiple rural water projects.

Instead, while Del Monte contested billions in taxes through expensive legal battles, ordinary Kenyans were being told to tighten their belts, accept higher VAT on basic goods, and pay new levies on essential services.

The Kenya Human Rights Commission pulled no punches in its response, accusing Del Monte and other multinationals of looting what rightfully belongs to Kenyan citizens.

“For years, ordinary Kenyans have been told to tighten their belts, pay more VAT, and accept new levies on basic goods and services. However, some of the country’s largest and most profitable corporations, like Del Monte, continue to aggressively contest paying billions in taxes. This is unjust and unacceptable,” the commission said in a scathing press statement.

The rights body warned that corporate tax evasion weakens the state’s ability to deliver basic services and shifts the tax burden onto workers, small businesses and low-income households. When multinationals dodge taxes, children sit in overcrowded classrooms, patients go without medicine, and communities lack clean water.

KHRC revealed it is now examining other corporations, focusing on the land they occupy, the terms of their leases, and what they actually pay in land rates and taxes. Early findings suggest the scale of revenue loss will shock many Kenyans, especially at a time when households are strained by PAYE, VAT and rising levies on basic necessities.

The commission is demanding sweeping reforms to stop multinationals from bleeding the country dry. It wants all foreign corporations operating in Kenya to publicly disclose their revenues, profits, taxes paid, number of employees and assets for each country where they operate. It is calling for a dedicated, well-resourced program for annual transfer pricing audits targeting high-risk sectors like agribusiness, extractives, manufacturing, energy and digital services.

Where aggressive tax avoidance is proven, KHRC insists penalties must go beyond mere recovery of tax and interest to include heavy punitive fines and possible criminal investigations. The commission wants strict restrictions on the deductibility of management fees, marketing fees, royalties and interest on related-party loans unless companies can demonstrate clear economic substance.

It is also demanding publication of an annual list of the largest corporate taxpayers and companies with major unresolved tax disputes, joint work with the Ministry of Lands to establish a public register linking large landholdings to tax records, and active challenges to treaty shopping and artificial routing of payments through low-tax jurisdictions.

Most provocatively, KHRC wants companies with histories of aggressive tax avoidance barred from receiving tax incentives, accessing public procurement or benefiting from any form of state support.

The Del Monte case is not an isolated incident but part of a broader pattern. KHRC’s 2025 publication “Who Owns Kenya?” revealed how corporate tax abuse fuels inequality and leaves essential public services underfunded. The report showed that while multinationals employ armies of accountants and lawyers to minimize their tax bills, schools crumble, hospitals run out of drugs, and roads remain impassable.

Tax justice campaigners say Kenya loses billions annually to profit shifting by multinationals. A 2024 study estimated that African countries collectively lose around $88.6 billion per year to illicit financial flows, with transfer pricing abuse being a major component. Kenya is believed to lose between $1.1 billion and $1.5 billion annually, though the true figure may be higher given the opacity of multinational operations.

The global context makes Kenya’s predicament even more galling. Multinationals operating in Africa often pay far lower effective tax rates than their statutory obligations would suggest, using intricate structures involving subsidiaries in places like Mauritius, the Netherlands, Switzerland and the Cayman Islands to minimize their African tax footprint.

Del Monte Kenya has not publicly commented on the tribunal ruling or indicated whether it will seek further appeals. The company’s managing director Wayne Cook has previously defended the firm’s tax practices as compliant with Kenyan law.

But the tribunal’s decision suggests that era may be ending. Tax authorities worldwide are cracking down on transfer pricing abuses, and Kenya appears determined to claim its fair share of the wealth generated on its soil.

For the millions of Kenyans struggling with the rising cost of living, the Del Monte case crystallizes a profound injustice. While they pay tax on every shilling they earn and every item they buy, some of the wealthiest corporations doing business in Kenya deploy sophisticated schemes to avoid contributing their fair share to the country that provides their workers, their infrastructure, their markets and ultimately their profits.

The question now is whether the Del Monte ruling marks a turning point or remains an isolated victory in a long war against corporate tax abuse. With KHRC and other civil society organizations now turning their spotlight on other multinationals, and with KRA apparently emboldened by its tribunal win, more corporate tax scandals may soon come to light.

What is certain is that ordinary Kenyans are watching, and they are running out of patience with a system that squeezes the poor while allowing the powerful to game the rules. The Del Monte case has proven that when authorities have the will to act, corporate tax dodgers can be held to account. Now Kenyans want to see that will applied across the board, to every multinational that treats Kenya as a place to extract wealth rather than a country deserving of fair contribution to the common good.

The KSh1.76 billion Del Monte must now pay is not just a number on a balance sheet. It represents classrooms that can be built, hospitals that can be equipped, roads that can be paved, and services that can be delivered. It represents a small measure of justice in a system that has for too long favored corporate interests over the public good.

As the tribunal put it bluntly: multinationals cannot use paperwork to export profits when the actual work, risks and value addition happen on Kenyan soil. That principle, if consistently enforced, could transform Kenya’s fiscal landscape and ensure that those who profit from Kenya also contribute to Kenya’s development.

The battle is far from over, but for once, the people of Kenya can claim a victory.

February 4, 2026
American Tobacco Firm Ordered To Pay KRA Sh23.7 Billion For Tax Evasion

The High Court has delivered a major victory to the Kenya Revenue Authority, ordering Alliance One Tobacco Kenya Limited to pay Sh23.746 billion in unpaid taxes after dismissing the company’s appeal against excise duty assessments.

Justice Francis Rayola Olel ruled that the American-owned tobacco processor’s operations constitute manufacturing and therefore attract excise duty, contrary to the company’s claims that its products should be classified as unmanufactured tobacco exempt from such taxes.

Alliance One Tobacco Kenya Limited, a local subsidiary of the US-based Alliance One International, had argued that its tobacco processing activities were merely preparatory steps that did not amount to manufacturing.

The company purchases raw tobacco from farmers in Kenya and Uganda, then performs stemming, threshing, and re-drying operations before supplying the processed tobacco to cigarette manufacturers including BAT Kenya, Mastermind Tobacco, and Estobac Kenya.

However, the court adopted the Tax Appeals Tribunal’s findings that these operations constitute “intermediate manufacturing” under Section 2 of the Excise Duty Act 2015.

The judge noted that the company’s processes involve removing thick stalks, grading to eliminate undesirable leaves, trimming ends, mechanical stripping, re-drying to customer-specified moisture levels of about 13 percent, and final packaging.

“Without doubt, this comprises an intermediate manufacturing process,” Justice Olel stated in his September 10 judgment.

“The tribunal did not err in finding that the appellant was liable to pay excise duty on its products based on the definition of manufacturing under the Excise Duty Act.”

The tax dispute originated when KRA investigations revealed that Alliance One processed tobacco through leased machinery at BAT facilities.

The revenue authority argued that transforming green leaf tobacco into graded, blended, and packed products tailored to customer specifications constitutes manufacturing under the law, which covers both production of excisable goods and “any intermediate or incomplete process” in their production.

KRA had initially demanded Sh25.802 billion in unpaid corporation income tax, value added tax, and withholding tax.

After additional documentation was provided through Ernst & Young, the Commissioner issued a fresh assessment for Sh39.804 billion including penalties and interest.

Following objections and alternative dispute resolution proceedings, the final assessment was reduced to Sh23.746 billion.

The tobacco company had protested what it termed excessive taxation, pointing out that while it sold its most expensive processed tobacco at approximately Sh600 per kilogram, the tax assessment sought to levy excise duty at Sh7,000 to Sh8,837 per kilogram—more than ten times the selling price.

However, the court noted that this complaint was not properly pleaded in the case.

The ruling reinforces KRA’s position that intermediate tobacco processing constitutes manufacturing for tax purposes.

In 2020, the authority had already issued a private ruling stating categorically that Alliance One’s processes involved manufacture and that taxes were payable.

This judgment follows similar precedents where KRA has successfully argued that intermediate processing constitutes manufacturing.

In 2020, the Tax Appeals Tribunal ordered Keroche Breweries to pay Sh9.1 billion after ruling that diluting vodka to produce ready-to-drink beverages constituted manufacturing a new product subject to excise duty.

The Sh23.746 billion tax liability is nearly equivalent to the total annual revenue of BAT Kenya, which earned Sh25.716 billion in 2024, highlighting the significant financial impact of the court’s decision on Alliance One Tobacco Kenya Limited.

September 17, 2025
Oki General Trading Faces Sh356 Million Tax Evasion Charges as Star Witness Falters in Court

Nairobi — Questions are mounting over the strength of the prosecution’s case against Oki General Trading (Kenya) after its star witness, Deepak Rajoriya, struggled under cross-examination in a Sh356 million tax evasion trial.

What had been framed as a straightforward case of corporate misappropriation took a dramatic turn when Rajoriya once touted as the whistleblower, failed to provide clear answers on the origins of his allegations.

His testimony, built on a contested audit he commissioned, has now raised more doubts than it has resolved.

Court records revealed that Rajoriya, an accountant with ties to the company’s parent firm abroad, entered Kenya on December 25, 2024, using a tourist visa.

Barely two weeks later, on January 16, 2025, he was appointed a director of Oki General Trading.

Within days of taking up the role, he ordered a forensic audit that later formed the backbone of the prosecution’s claims of a Sh356 million misappropriation.

The defense team pounced on this timeline, arguing that the speed of Rajoriya’s elevation from tourist to company director to whistleblower was both suspicious and unprecedented.

They also highlighted that Oki General Trading has consistently filed annual independent audit reports, none of which had flagged the discrepancies now being alleged.

Under pressure in court, Rajoriya admitted that he had not conducted any internal investigation nor accessed original company records.

His accusations rested solely on the audit he personally commissioned, raising questions about its independence.

When asked how such a massive financial hole could have gone unnoticed in previous audits used for tax filings, he was unable to provide a coherent response.

The case took another twist when it emerged that the Kenya Revenue Authority (KRA) has already levied a Sh356 million penalty against Oki General Trading—the exact same figure Rajoriya claims was misappropriated. The coincidence has fueled speculation that the company might be attempting to reframe a tax liability as corporate theft, shifting the burden from unpaid taxes to alleged internal fraud.

“The numbers match too neatly,” one lawyer observing the proceedings told reporters outside the Milimani Law Courts. “It raises the question of whether this case is really about theft—or about avoiding a tax bill.”

The courtroom drama has cast a shadow over the prosecution’s credibility, with Rajoriya’s shaky testimony weakening the narrative of a clean-cut financial scandal. Instead, the trial has exposed deep contradictions, leaving the public to wonder whether the Sh356 million at the center of the dispute is missing money or simply unpaid tax.

The case continues, with the defense pressing for the audit’s credibility to be struck out as evidence.

September 16, 2025
Investigation Reveals How Innocent Kenyans Are Unknowingly Trapped in Debts in Shocking KRA Tax Fraud Racket

KRA investigation uncovers elaborate identity theft scheme targeting ordinary citizens, leaving victims facing millions in tax liabilities

NAIROBI – A sophisticated tax fraud racket has emerged in Kenya, where criminal networks are stealing the identities of innocent citizens to create shell companies, leaving unsuspecting victims trapped in massive tax debts and facing arrest, a comprehensive investigation reveals.

The Kenya Revenue Authority’s Investigation and Enforcement Unit has uncovered what officials are calling the “identity theft tax evasion scheme” – a complex fraud operation that has ensnared domestic workers, traders, and even corporate employees in a web of financial liability they never created.

The shocking reality

The scheme’s victims include ordinary Kenyans whose personal details – national identity cards and Personal Identification Numbers (PINs) – are being harvested by fraudsters to establish companies without their knowledge.

These shell entities then become vehicles for elaborate tax evasion schemes, including fictitious Value Added Tax returns and money laundering operations.

“These individuals are later pursued for tax liabilities or fraud they are unaware of – sometimes even arrested or jailed,” KRA enforcement officials revealed during the investigation.

The investigation uncovered several heart-wrenching cases that illustrate the scheme’s devastating impact on innocent lives.

In Mombasa, trader Joy Catherine Gashengu secretly used her domestic worker’s national identity card to register for a KRA PIN, importing second-hand clothes worth Sh349 million between 2015 and 2020.

The domestic worker’s identity was used to declare goods while evading duties totaling Sh68 million. While Gashengu faces fraud charges, her employee initially found herself implicated in crimes she had no knowledge of.

Perhaps the most shocking case involves a young woman who discovered her predicament in the most dramatic fashion possible.

On September 10, 2024, she was prevented from boarding an international flight at Jomo Kenyatta International Airport due to a travel ban – only to learn she was listed as director of a company with millions in unpaid taxes.

“Upon interrogation by KRA investigators, she said that she had no knowledge of the existence and ownership of the company,” the investigation found.

Even more disturbing, she discovered she was the sole director of four other companies she had never heard of.

The travel ban had been in effect since September 2018 – six years during which she remained unaware that her identity had been stolen and used to establish a business empire that owed the government substantial sums.

The missing trader scheme

At the heart of many cases lies what investigators call the “Missing Trader Scheme” – a sophisticated fraud mechanism that has significantly impacted Kenya’s VAT collection performance.

In this scheme, fraudsters create fictitious invoices to simulate business transactions where no actual goods or services are supplied.

Companies appear to meet all legal requirements for legitimate trade while using fabricated “payments” to create artificial costs of goods sold, which are then used to claim fraudulent VAT refunds.

The scheme’s complexity allows perpetrators to hide the final economic beneficiaries of purchases, effectively shielding the real criminals while innocent victims face the consequences.

The fraud’s scale is staggering.

VAT collections fell by 4.3 percent to Sh304.1 billion in the first half of the most recent fiscal year – the first decline since the COVID-19 pandemic.

This represents hundreds of millions in lost government revenue that could have funded critical public services.

Individual cases reveal the personal toll: Safaricom employee Francisca Kathini George faced a Sh45 million tax demand for a company she insisted she had never heard of.

Despite her protests and lack of involvement, the Tax Appeals Tribunal ruled against her, noting she couldn’t produce documents proving her innocence – an almost impossible standard for victims of identity theft.

The scheme has also ensnared foreign nationals. Chinese citizen Cai Ronggui received a four-year jail sentence for tax evasion amounting to Sh74.6 million through Yiyuan Trading Company Limited, which generated Sh162.2 million in income.

Ronggui maintains he never owned the company and suggests people close to him may have registered it using his stolen details.

Systemic vulnerabilities

The investigation reveals concerning gaps in Kenya’s business registration and tax collection systems that fraudsters are exploiting.

The ease with which criminals can establish companies using stolen identities suggests fundamental weaknesses in verification processes.

KRA staff have previously faced accusations of colluding with tax evaders and accepting bribes, raising questions about internal controls and oversight mechanisms designed to prevent such schemes.

Beyond the financial implications lies a human tragedy.

Victims describe the psychological trauma of discovering they’re wanted by authorities for crimes they never committed.

Some have lost their livelihoods, faced imprisonment, or been unable to travel internationally due to fraudulent activities conducted in their names.

The scheme particularly targets vulnerable populations, including domestic workers and other low-income individuals who may lack the resources or knowledge to monitor their financial and legal standing effectively.

The Kenya Revenue Authority has launched an intensive investigation into at least four confirmed cases of identity theft tax evasion, with officials indicating the scope may be much broader.

The enforcement unit is working to distinguish between genuine perpetrators and innocent victims caught in the fraud web.

However, the investigation reveals that proving innocence remains challenging for victims, who must demonstrate they had no knowledge of or involvement in companies registered in their names – often without access to the documentation needed to support their claims.

This investigation exposes critical vulnerabilities in Kenya’s tax and business registration systems that require immediate attention.

The ongoing cases represent just the tip of what appears to be a much larger criminal enterprise that threatens both government revenue and individual citizens’ financial security.

May 27, 2025
Tax Evasion Scandal Rocks Eldoret Airport: Smugglers Sneak Millions in Smartphones Past Corrupt Officials

A major tax evasion scandal has erupted at Eldoret International Airport, where insiders and local dealers have exposed a smuggling racket involving millions of shillings worth of smartphones.

Corrupt officials are allegedly allowing importers to bypass taxes on consolidated smartphone shipments, costing the government billions in lost revenue.

The alarm was raised by industry players who revealed that only 10 to 20 percent of imported electronic goods, particularly high-end mobile phones like iPhones and Samsungs, are being declared and taxed. The rest are smuggled out, with insiders claiming officials charge as little as $10 per smartphone—far below the required levy. “This is corruption of the highest order,” one dealer said, demanding fairness and accountability.

The exposé prompted swift action from Kenya Revenue Authority (KRA) headquarters in Nairobi, with officials demanding explanations from Eldoret’s regional heads. Sources say a team has been dispatched to investigate claims that six airport staff members are facilitating the smuggling. Dealers reported a recent incident involving a 40-tonne cargo containing thousands of assorted smartphones that was smuggled out without duty payments. Two additional planes carrying over 45 tonnes of cargo reportedly arrived on Friday, raising further suspicions.

Importers who comply with tax regulations say they are being disadvantaged by the rampant corruption. They have petitioned KRA to probe the smuggling, which they claim involves goods valued at millions of shillings. The smuggled smartphones are allegedly transported to Nairobi’s Luthuli Avenue, where they are sold to unsuspecting buyers and suppliers.

The scandal follows a history of similar allegations at Eldoret Airport, where past probes led to staff reshuffles but failed to curb the problem. The government’s directive to route cargo planes through Eldoret to boost its viability has inadvertently made it a hub for tax evasion, insiders say. The smuggling network also extends to other entry points, including Namanga, Lungalunga, Taveta, Malaba, Busia borders, Mombasa port, and Jomo Kenyatta International Airport.

Further complicating the issue, smugglers reportedly pay just $8 per kilo of cargo instead of per piece, significantly undervaluing the goods. Four major companies have been implicated in the racket, which has led to substantial revenue losses as KRA struggles to meet collection targets. A probe into the allegations is ongoing, with dealers and insiders urging authorities to enforce stricter oversight and ensure equal treatment for all importers.

April 15, 2025
Uhuru-Linked Bank: Court Quashes Tax Exemptions for NIC-CBA Merger, Preventing Sh7B Tax Evasion

The NCBA Group, linked to former President Uhuru Kenyatta’s family, has suffered a legal setback after a court ruled that the 2019 tax exemption granted for the merger of NIC Group and Commercial Bank of Africa (CBA) was unconstitutional, preventing over Sh7 billion in potential tax evasion.

In a ruling delivered on Friday, July 4, 2025, the court overturned Legal Notice No. 112 of June 2019, which had exempted the banks from certain taxes during the merger.

Justice Chacha Mwita said the decision to exempt that bank, whose top owners are families of Jomo Kenyatta and Philip Ndegwa, from paying the stamp duty following the merger was not made in public interest.

“Having considered the issues raised, I come to the conclusion that the exemption was not made in public interest and thus violated the principle in section 106 of the Stamp Duty Act, so that the discretion conferred by that section was not properly exercised,” said the judge.

The judge said the interest exhibited in the letter from the bank, seeking exemption, was more private than in public interest.

Busia County Senator Okiya Omtatah, who filed the case, hailed the decision as a major victory for Kenya, stating that it saved taxpayers billions of shillings.

“In this legal battle, I exposed an attempt by these banks to evade over Sh7 billion in taxes through a merger that would have allowed them to avoid their rightful tax obligations, with NCBA Bank and Standard Chartered central to the transaction,”Omtatah said.

The exemption, granted by the National Treasury, bypassed legal procedures. During former President Kenyatta’s administration, the Treasury had waived a Sh350 million share transfer tax for the merger.

The Kenyatta family held a significant stake in CBA, while the NIC Group—listed on the Nairobi Securities Exchange—was controlled by the wealthy Ndegwa family. The merger created one of the largest financial services groups in the region.

Court Case

Omtatah argued that the Treasury’s decision to exempt the merger from taxes was “secretive and opaque,” contending that former Treasury Cabinet Secretary Henry Rotich lacked the authority to arbitrarily grant such a waiver.

“The taxpayer stands to lose an estimated Sh350 million in tax revenues that should have gone to public coffers,” he stated in his application.

He sued the Treasury Cabinet Secretary and the Attorney General, with NIC and CBA listed as interested parties.

Law Permits Tax Waivers

However, John Gachora, NCBA Group Managing Director, defended the waiver, insisting it was lawful.

“Transactions of this nature are provided for in law,” Gachora said during an interview on a local station in February 2.

“The waiver benefited not just NCBA but the 26,000 shareholders behind the merging banks.”

Gachora dismissed claims of preferential treatment, stating that NCBA—where the Kenyatta family retains a significant stake—has been tax-compliant.

“In the same year we received the Sh350 million waiver, we paid Sh4.4 billion in taxes—more than ten times the disputed amount,” he said, adding that NCBA remains one of Kenya’s largest taxpayers, having paid Sh6.7 billion in 2021 and Sh14.3 billion last year.

“Sh350 million is negligible in the context of our total tax contributions,” Gachora said. “Should the court rule against us, we will promptly pay the amount the following day.”

Political Backlash

Before the merger, NIC and CBA operated independently in banking, stock brokerage, and other sectors across Kenya and Tanzania.

The tax waiver became a political issue during the 2022 election campaigns, with President William Ruto and former Deputy President Rigathi Gachagua accusing Kenyatta—then backing Azimio leader Raila Odinga—of using his influence to secure the deal.

They framed it as part of systemic “state capture” under the previous administration, allegations Kenyatta denied.

“Through a single gazette notice, two companies tied to the First Family were exempted from paying Sh350 million—enough to build 35 Level 3 hospitals,” Gachagua claimed ahead of the 2022 polls.

The current administration had pledged stricter tax reforms and a crackdown on evasion.

“We cannot tolerate a system where the powerful exempt themselves from taxes. Their time is up—every citizen must pay their fair share,” Gachagua had said during their campaigns.

Former Treasury CS Henry Rotich had exempted the transfer of CBA shares into NIC Bank from a 1% stamp duty on the unquoted stocks involved in the share swap.

The merger was expected to enhance NCBA’s profitability by cutting costs across its regional operations.

The court’s decision to quash the tax exemption comes at a time when NCBA no longer enjoys the full regime protection that initially secured them the tax relief. With former President Uhuru Kenyatta now at odds with the current administration, this ruling may represent the fulfillment of a pledge to dismantle the preferential treatment NCBA received during his tenure—and could signal more such actions to follow.

NCBA has since announced that it will appeal the High Court’s decision.

April 5, 2025
EXCLUSIVE: British American Tobacco Kenya Exposed Over Missing Sh9.6 Billion in Tax Evasion

A damning report by the University of Bath’s Tobacco Control Research Group (TCRG) and Tax Justice Network Africa has uncovered a $93 million (KES 9.6 billion) discrepancy in the financial disclosures of British American Tobacco Kenya (BATK) for 2017 and 2018.

The findings, which suggest potential tax avoidance or evasion, have raised urgent questions about the company’s financial practices and prompted calls for a thorough investigation by Kenyan authorities.

The report, published in collaboration with The Investigative Desk, analyzed six years of BATK’s annual reports, production data submitted to the Kenya Revenue Authority (KRA), government documents, and cigarette consumption and pricing data. It revealed glaring inconsistencies, including millions of unaccounted cigarette packs, which could translate into significant unpaid taxes.

Unanswered Questions and Calls for Accountability

Tax and audit experts who reviewed the findings have called for immediate action. Leopoldo Parada, Reader in Tax Law at King’s College London, stated, “In the absence of a convincing explanation, this looks like tax avoidance and potentially evasion.” Kennedy Waituika, Director of Audit and Assurance at TradeMark Africa, echoed this sentiment, urging the KRA to conduct a comprehensive tax review of BATK.

Despite the mounting evidence, BAT Kenya has denied any wrongdoing. In a statement, a company spokesperson said, “BAT Kenya firmly rejects all the allegations made regarding the discrepancy between its published financial disclosures and data. The company pays all taxes in line with applicable laws.” However, the report’s authors have criticized the company for failing to provide a credible explanation for the discrepancies.

Despite multiple inquiries,BATK refused to disclose additional financial records, citing “commercial confidentiality.”

The Kenya Revenue Authority has yet to respond to requests for comment on whether it will investigate the matter. This silence has fueled concerns about the effectiveness of tax enforcement in Kenya, particularly in relation to multinational corporations.

A Pattern of Exploitation?

The investigation reveals BATK operates within a highly convoluted corporate structure, with financial flows passing through opaque subsidiaries in Kenya, the Netherlands, and the UK. This intricate web appears designed to minimize tax liabilities.

For instance, the Dutch entity Molensteegh Invest BV—which owns 60% of BATK—funnels millions of dollars in dividends to BAT’s UK headquarters while reporting minimal local profits. This model, according to experts, is a textbook case of aggressive tax planning, allowing the company to reduce its taxable income in Kenya.

Such strategies are not unique to Kenya. BAT has been found guilty of tax evasion in the Netherlands, where courts ruled that the company deliberately excluded 1.8 billion EUR in profits from tax authorities. Similarly, in South Africa, the company faced a 152 million USD tax dispute, which was settled under undisclosed terms.

Andy Rowell of TCRG highlighted the colonial legacy of profiting from African markets while evading responsibilities. “If this is happening in Kenya, it begs the question of whether similar practices are occurring in other jurisdictions, including the UK and the US,” he said.

Dr. Rob Branston, also from TCRG, emphasized the need for stronger regulation and enforcement. “Transnational corporations like BAT Kenya have a duty to pay their fair share of taxes, especially in countries where they profit significantly. This is a stark reminder of the need to prevent companies from exploiting tax systems to the detriment of public resources and development,” he said.

A History of Controversy

This report builds on earlier investigations, including the 2020 publication Big Tobacco, Big Avoidance, which exposed widespread tax avoidance practices by transnational tobacco companies. Marcel Metze of The Investigative Desk, who has spent years investigating the tax practices of major tobacco corporations, noted, “We keep finding lack of transparency, opaque fiscal structures, and consistent tax planning practices which can be labelled as ‘aggressive.’ The results of our study raise serious doubt about the correctness of the company’s financial reporting.”

The allegations against BAT Kenya are not isolated. In 2017, the UK’s Serious Fraud Office (SFO) launched an investigation into BAT over allegations of bribery and corruption in Africa. Although the investigation was closed in 2021, Bob Blackman MP, Co-Chair of the All-Party Parliamentary Group on Smoking and Health, has called for the SFO to reopen its probe in light of the new evidence. “This newly published research raises serious questions about British American Tobacco’s activities in Kenya,” he said.

Implications for Kenya and Beyond

The $93 million discrepancy represents a significant loss of revenue for Kenya, a country where public resources are already stretched thin. Tax evasion by multinational corporations not only undermines government budgets but also exacerbates inequality and hampers development efforts.

The report’s authors and experts are urging Kenyan authorities to take swift action. They also hope the findings will prompt similar investigations in other countries where BAT and other tobacco companies operate. As Marcel Metze put it, “The results of our study warrant further investigation by financial authorities.”

For now, the spotlight remains on BAT Kenya and the KRA. Will the company provide a credible explanation for the discrepancies? Will the KRA step up to hold a powerful multinational accountable? The answers to these questions could have far-reaching implications for tax justice in Kenya and beyond.

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February 14, 2025
Chinese National On The Spot Over Multi-million Tax Evasion

A Chinese Engineer is on the spot for allegedly failing to pay his tax as required by the law.

Mr. Dong Chen Pang who resides and operates a company in Nairobi, Kenya has completely ignored paying tax to the Kenya Revenue Authority.

“Yes we are tired of him , he wants to continue operating without paying tx.” She said.

A senior source within KRA whispered to this publication that Dong Chen Pang is yet to clear over Sh4.1M.

Two years, Dong Chen Pang testified in court that he was beaten up by his two other chinese national in a gumbling gone wrong.

Xiong and Jin Ping, were charged before Kibera senior principal magistrate Boaz Ombewa with seriously injuring Dong Chen Pang whom they allegedly beat up on May 16 at Kingston Apartments along Ng’ong Road.

The offence was committed at night according to the charge sheet tabled in court.

The matter was reported to police after the fight and Pang was taken to hospital. He was later treated at Coptic Hospital after the eye developed complications

January 20, 2025
KRA Commissioner General Humphrey Wattanga Allegedly Received Bribe to Halt Tecno Tax Evasion Probe

Nairobi, January 4, 2025– In a shocking revelation that has potentially far-reaching implications for Kenya’s fiscal integrity, news sources claim that Humphrey Wattanga, the Commissioner General of the Kenya Revenue Authority (KRA), allegedly received a bribe of Ksh. 100 million from officials of the Chinese tech giant, Tecno Mobile. The bribe, according to sources, was intended to stop investigations into Tecno’s alleged tax evasion, which is claimed to total over Ksh. 400 billion.

The allegations surfaced through posts on X, where it was suggested that the payment was made to suppress a damning report and effectively halt further probes into Tecno’s financial practices in Kenya. Tecno, known for its affordable smartphones, has been accused of colluding with corrupt KRA officials to evade taxes, a practice that if proven, could represent one of the largest instances of tax evasion in the country’s history.

Humphrey Wattanga, who has been at the helm of KRA since August 2023, was previously noted for his efforts to modernize tax administration and increase revenue collection through technological integration. However, these new allegations cast a shadow over his tenure, suggesting possible corruption at the highest levels of the tax authority.

The claims have ignited discussions, with many expressing outrage and demanding accountability. The general sentiment seems to be one of disbelief and concern over how such large-scale tax evasion could go unchecked if the allegations hold true. There’s also a significant call for a thorough investigation not just into Tecno’s operations but also into the KRA’s internal practices.

Web sources also indicate that there have been previous summons and investigations related to tax evasion under Wattanga’s leadership, focusing on different companies. These instances paint a complex picture of KRA’s ongoing struggle with tax evasion and the challenges in enforcing compliance among large corporations.

No official statement has been released by KRA or Tecno concerning these allegations. The lack of immediate response from both entities has only fueled speculation and public demand for transparency. The Kenya Anti-Corruption Commission (KACC) has yet to comment on whether they will launch an investigation into these serious allegations.

The economic implications of such a scandal are significant. If confirmed, the evasion of such a colossal amount in taxes could have deprived the Kenyan government of essential revenue, potentially affecting public services and infrastructure development.

As this story develops, it will be critical to monitor any official investigations, statements, or actions from both KRA and Tecno. The integrity of one of Kenya’s key institutions for revenue collection is at stake, alongside the broader implications for corporate accountability in Africa’s tax regimes.

This incident also raises questions about the effectiveness of current checks and balances within KRA, especially concerning high-profile cases involving multinational companies. The coming days will be crucial in determining whether these allegations will lead to a broader crackdown on corruption or if they will dissipate without significant repercussions.

January 4, 2025
KRA Raid on Tecno Transsion Electronics Yields No Action Despite Allegations of Tax Evasion

Nairobi, Kenya – In early 2024, whispers of financial misconduct at Tecno Transsion Electronics’ Nairobi office, located in Cardinal Otunga Plaza, led to a significant investigation by the Kenya Revenue Authority (KRA). Allegations included non-remittance of Pay As You Earn (PAYE) deductions and other tax obligations.

In May 2024, KRA conducted a dramatic raid on Tecno’s premises, seizing documents that suggested undisclosed salary payments, unreported transactions, and cash in multiple currencies, hinting at tax evasion and financial mismanagement. However, despite the initial optimism and evidence gathered, the investigation has since stalled, raising questions about its effectiveness and integrity.

Whistleblowers within the company had highlighted not only financial issues but also racial abuse and labor violations. Employees reported undocumented foreign workers, mainly from Asia, with allegations of labor rights abuses and discriminatory practices against Kenyan staff.

According to posts on X, there’s a growing sentiment that KRA’s inaction might stem from compromised officials within the agency. The lack of progress post-raid has led to widespread frustration among Kenyans, especially given Tecno’s significant market presence with brands like Infinix, Tecno, and ITEL.

Tecno, reportedly, has evaded taxes amounting to Ksh 400 billion, which is nearly half a trillion Kenyan shillings, exacerbating public discontent. The silence from KRA, particularly under Commissioner General Humphrey Wattanga, has fueled speculation about corruption or inadequate enforcement against corporate tax evasion.

The situation mirrors broader concerns about tax justice in Kenya, where small earners are rigorously taxed while major corporations allegedly dodge their fiscal responsibilities. This disparity could lead to renewed public protests, reminiscent of those in June 2024, if not addressed.

KRA and Wattanga are now under pressure to explain the standstill in the investigation, restore public trust, and ensure multinational companies like Tecno comply with Kenyan tax laws. The potential for public outrage remains high, as the unchecked actions of such corporations continue to stir anger and feelings of betrayal among tax-paying citizens.

December 24, 2024
Chinese Embassy Dragged as Kenyan Tax Authorities Probe Tobacco Firms For Tax Evasion

The Chinese embassy in Nairobi has called in the directors of two local firms linked to China Tobacco, the world’s largest cigarette maker, for questioning amidst an ongoing investigation by the Kenya Revenue Authority (KRA) into potential tax evasion.

According to sources close to the investigation, KRA’s Investigations & Enforcement unit, which specializes in high-profile financial crimes, has raided the offices and warehouses of Yulees Blooms Company Ltd and Shapo Trading Ltd in Kilimani and on Mombasa Road. This action follows allegations of tax fraud.

The investigation centers around the distribution of China Tobacco’s brands, Septwolves and Harmonisation, which are part of the company’s extensive product line that generates significant global revenue. The involvement of a state-owned enterprise like China Tobacco in such a probe could have significant reputational implications, especially given China’s current aggressive stance on tax compliance at home, where the government is enforcing strict measures against tax evasion.

Among those summoned by the embassy is Liu Yuhang, a wealthy Chinese national and a director at Shapo Trading. Both the embassy and Mr. Liu have been unresponsive to requests for comment.

This investigation coincides with a broader initiative by Chinese authorities to increase revenue collection, particularly in light of economic strains from a prolonged property market slump affecting local government finances and overall economic confidence.

The KRA’s actions were sparked by a whistle-blower’s claim that Shapo Trading was under-declaring the value of its cigarette imports, thereby reducing the customs duty payable.

Reports suggest that the companies bypassed using the Electronic Tax Register (ETR) and neglected to stamp excise duty on cigarette packets, flouting key regulatory requirements.

Initial findings indicate that some of these cartons, approximately 40, may have been smuggled into neighboring countries for sale, further complicating the probe.

Additionally, there are suspicions that certain government officials may have played a role in enabling the smuggling and evasion tactics, potentially undermining the local tobacco industry and the livelihoods of local farmers.

An official from KRA confirmed the raids but emphasized the confidentiality of the investigation, citing the Tax Procedures Act of 2015 which limits information sharing.

Shapo Trading Ltd is known for importing the Septwolves and Harmonisation cigarette brands into Kenya, with distribution extending to Uganda and Tanzania. Yulees Blooms acts as the local sales agent, handling distribution across the region.

The surge in consumption of Chinese-made cigarettes in East Africa is partly due to the growing presence of Chinese nationals in the area, some of whom engage in retail sales. This increase in demand coincides with President William Ruto’s administration’s intensified efforts to curb tax evasion, especially after the contentious withdrawal of this year’s finance bill due to public unrest.

As the investigation continues, it underscores the complexities of international business operations and tax obligations, particularly in a context where state-owned enterprises are involved.

December 14, 2024
Court Paves Way To Probe Tatu City For Money Laundering

The Directorate of Criminal Investigations (DCI) has once again secured court approval to access crucial documents from the entities behind Tatu City in an ongoing investigation into allegations of money laundering and tax evasion.

In a recent ruling, Principal Magistrate Gideon Kiage at Kahawa Law Courts dismissed a challenge by Tatu City Ltd and Kofinaf Company Ltd aimed at nullifying an earlier court order. This order had permitted the DCI to seize documents pertinent to their investigation back in August.

The two companies had argued that they were denied their right to fair action when the court issued orders allowing the seizure of the documents in August, following an application by the DCI.

In a separate, but related ruling, the magistrate has allowed the DCI to also seize some documents from Lutta & Company Advocates which relate to various transactions involving the Tatu City project.

Tatu City Ltd and Kofinaf Company Ltd filed an application arguing that the documents sought from the law firm are protected by advocate-client privilege.

Magistrate Kiage held that the cited privilege does not act as a shield against criminal activities, hence investigators can be granted access to documents if there is suspicion that they could aid in prosecution.

Tatu City Ltd and Kofinaf Company Ltd argued that orders seeking warrants should only be issued after hearing from both sides and only after authorities have notified the subject of the ongoing investigation.

But Magistrate Kiage in his ruling held that notifying a subject of the investigation before applying for warrants in courts opens the risk of jeopardizing evidence.

The magistrate added that Tatu City’s case was an attempt to reopen the August application by the DCI, which initially gave way for detectives to investigate 10 companies behind the multibillion-shilling project.

The magistrate added that an affidavit from the investigating authority is sufficient, and courts can issue the warrants and orders if the filed documents convince them that a crime may have been committed.

“In the case of Okiya Omtatah & 2 others vs Attorney General & 4 others (2018) e-klr, it was observed that to give notice to the person to be investigated can easily jeopardize the incriminating evidence. The threshold for an application of this nature is met where the magistrate is persuaded that a crime may have been committed. I find in the end that the application herein is an attempt to re-litigate the application dated 6th August 2024 which by law is canvassed ex-parte,” Mr Kiage ruled.

Sale agreements between related firms that dealt in the land, valuation reports for the properties, receipts, tax-related documents, loan paperwork and company ownership records were the subject of the application.

Land transactions

In the second application, Mr Kiage said that the documents the DCI is to seize from Lutta & Company Advocates are only the ones listed in court, and which relate to specific land transactions within Tatu City.

From Lutta & Company Advocates, the DCI can now carry away certified copies of a sale agreement between Kofinaf Company Limited and Jomo Kenyatta University of Agriculture and Technology (JKUAT), a sale agreement between MJS Mansion Mauritius and Wanachuo Investment Limited and Dexamide Properties Ltd, in respect share purchase and a parcel registered as LR No.10877.

Tatu City has sought to appeal both rulings at the High Court.

Court papers have given a sneak peek into the DCI’s probe, which shows that it was also looking into possible illegal dilution of shares – irregular addition of shares intended to reduce existing shareholders’ percentage – and asset stripping.

The DCI is also looking into possible forgery of documents.

Detectives believe that directors of Tatu City Ltd and Kofinaf Company Ltd have been colluding with Lands ministry officials to undervalue land to lower tax liability during the sale.

The proceeds of land sales, the DCI told the court, were transferred to offshore bank accounts as part of the alleged tax evasion scheme. The transfer of funds was allegedly aided by some law firms, which have not been expressly named in Magistrate Kiage’s rulings.

The sale proceeds are allegedly shipped to offshore bank accounts, with Mauritius and Bermuda being some of the preferred destinations.

After directors of Meteor Properties Ltd, Gunga Properties Ltd, Jojoja Properties Ltd and Purple Saturn Properties Ltd snubbed the DCI summons, detectives filed an application before the Kahawa Law Courts Chief Magistrate, seeking authority to cart away dozens of documents.

Tatu City and Kofinaf said in their application that the DCI does not have legal authority to investigate tax evasion, an argument that the court dismissed.

The DCI’s economic and commercial crimes unit has been investigating Tatu City Ltd, Kofinaf Company Ltd, Green Seal Properties, Zefus Properties, Meteor Properties, Gunga Properties, Zefus Properties, Splendor Investments, Jojoja Properties, Purple Saturn Properties and Daykio Plantations over the alleged money laundering and tax evasion scheme.

The DCI in response to the applications filed evidence that the companies were not only informed of the investigations through summons but that former directors of Green Seal Properties and Zefus Properties tagged their lawyers along for recording of statements at Mazingira Complex in May.

By the time the companies were being served with the court orders in August, Green Seal Properties and Zefus Properties Ltd had overhauled their boards and directed that any communication from the DCI be directed to their advocates, Anjarwalla & Khana.

December 14, 2024
How Tax Evasion by Big Corporations Continues to Hurt the Weakened Kenyan Economy

In Kenya, a nation grappling with economic challenges, tax evasion by large corporations has become a critical issue exacerbating the fiscal strain on the government. This practice not only deprives the state of much-needed revenue but also distorts competition, undermines investment in public services, and deepens economic disparities. A notable example is the case of Transsion Holdings, the parent company of popular smartphone brands like Tecno, Infinix, and Itel.

The Kenyan economy, already under pressure from global economic downturns, local political instability, and high national debt, finds itself further weakened by the sophisticated tax evasion strategies employed by multinational corporations. According to recent investigations, Transsion Holdings is accused of evading taxes amounting to approximately Ksh. 400 billion (over USD 3 billion).

This staggering figure comes from allegations of under-reporting profits, manipulating financials through transfer pricing, and possibly colluding with corrupt officials within the Kenya Revenue Authority (KRA). The impact of such evasion is profound, considering that this lost revenue could have funded numerous public projects, from healthcare to infrastructure development.

The mechanism of tax evasion often involves complex legal and financial maneuvers. For instance, multinational companies like Transsion might report losses in Kenya while declaring profits in jurisdictions with lower tax rates or tax havens. This practice, known as transfer pricing, allows profits to be shifted to countries where they are taxed less or not at all, significantly reducing the tax burden in Kenya.

Furthermore, the use of cash payments to avoid leaving a paper trail and the alleged non-remittance of Pay As You Earn (PAYE) deductions are tactics that further illustrate the depth of the problem.

The consequences of such tax evasion extend beyond immediate revenue loss. Firstly, it places an unfair burden on smaller businesses and individual taxpayers who cannot avail themselves of similar evasion tactics. This creates an uneven playing field, where local enterprises struggle to compete with multinationals who can lower their operational costs through tax avoidance. The result is often a stymied growth for local businesses, which are the backbone of the Kenyan economy.

Moreover, the Kenyan government’s ability to fund public services is severely compromised. Education, health, and infrastructure, sectors critical for socio-economic development, suffer from underfunding due to the shortfall in tax collection. For instance, the government’s budget for these services could have been significantly bolstered by the Ksh. 400 billion allegedly evaded by Transsion alone. Instead, the government must either cut services, increase borrowing (further inflating public debt), or raise taxes on the populace, none of which are sustainable solutions.

The narrative of tax evasion in Kenya isn’t limited to Transsion. Other big corporations have also been implicated in tax evasion scandals. For example, previous reports have highlighted how companies in the energy sector, particularly those dealing in petroleum, have engaged in practices like under-declaration of imports to evade customs duties.

Similarly, the telecommunications industry has seen its share of scrutiny with allegations of profit shifting and tax avoidance through intricate corporate structures.

The Kenya Revenue Authority has attempted to combat these issues through technological interventions like the implementation of the iTax system for better tax filing and compliance monitoring, alongside special investigations into high-profile cases.

KRA had launched an online web-based reporting solution dubbed iWhistle, that provides a framework for KRA Staff and members of the public to report bribery, concealment, conflict of interest, evasion, tax fraud, abuse of office, diversion of goods, tax evasion, manufacturing of counterfeit goods and other tax related crimes, upon seeing, hearing or suspecting the aforesaid.

However, the agility and resources of these corporations often outmatch the capabilities of the tax authority, which is sometimes plagued by corruption or lacks the sophisticated tools needed to catch up with global tax evasion strategies.

From a broader perspective, tax evasion by big corporations also affects Kenya’s attractiveness as an investment destination. While the country aims to attract foreign direct investment to spur economic growth, the presence of widespread tax evasion can signal to potential investors about governance and legal risks, deterring investment or pushing companies towards similar unethical practices to remain competitive.

To address this, there is a clear need for legislative reform, international cooperation, and enhanced enforcement mechanisms. Kenya could benefit from adopting global standards like the OECD’s Base Erosion and Profit Shifting (BEPS) project, which aims to curb tax avoidance strategies by multinationals.

Additionally, fostering transparency, strengthening anti-corruption measures within KRA, and possibly leveraging whistleblower protection could enhance the government’s ability to tackle tax evasion.

In conclusion, tax evasion by companies like Transsion not only starves the Kenyan economy of vital resources but also undermines the principle of fair taxation, which is crucial for equitable economic development. The ongoing challenge for Kenya is not just to catch up with these corporations in terms of tax enforcement but to create a system where evasion is less attractive and more risky, ensuring that the economic burden is shared more equitably across all sectors of society.

December 12, 2024
Adidas Headquarters Raided In Years-Long Tax Investigation, Company Says

Authorities raided Adidas AG headquarters in Germany as part of a years-long tax investigation, a spokesperson from the company said on Tuesday.

Adidas said in a statement it has been in contact with customs authorities for several years about the matter and is providing them with documents and information.

The raid was first reported by Germany’s Manager Magazine.

The investigation covers the period from October 2019 to August 2024 and is related to compliance with customs and tax regulations regarding the import of products into Germany, the company said, adding it was cooperating with authorities.

The company said it continues to work closely with customs authorities to clarify questions that have also arisen due to different interpretations of German and European law.

“The company does not expect a significant financial impact in connection with the investigation,” Adidas said in a statement.

December 10, 2024
EXPOSED: Gold Smuggling Syndicate Exposed In Kenya

Kenyan authorities are on high alert following the arrival of Dr. Alanizi Abdullah who is anticipating the arrival of a significant gold consignment from the Democratic Republic of Congo.

Dr. Abdullah is no ordinary citizen. He is a wealthy and influential operator with extensive connections across Middle Eastern embassies in Kenya, which he reportedly uses as conduits for smuggling smuggled gold into Asian markets.

Gold smuggling has long been a persistent challenge in Kenya. These sophisticated syndicates typically involve corrupt officials who facilitate the illegal transportation of gold from source countries to international markets. The primary motivations behind such operations include tax evasion, money laundering, and financing illicit activities.

The Saudi national, based in Dubai, has reportedly perfected a complex smuggling method. Using corrupt local clearing agents, he moves gold from South Kivu into Kenya, then channels the shipments through the Saudi Embassy and select Middle Eastern diplomatic missions. These shipments are then exported as highly confidential cargo, effectively avoiding taxation.

According to intelligence sources, Abdullah relies on a primary local agent named Amir Said. The syndicate is believed to have smuggled over one tonne of gold through this intricate network. Moreover, he is alleged to have established close relationships with the Mai-Mai rebels in South Kivu, exchanging gold for military equipment and financial support.

The network, is believed to have suffered a massive blow on Friday, November 29, 2024, when two key soldiers of the MaiMai rebel group, only known as Chairman and Ricardo were arrested near the Namanga border trying to smuggle 65 kilograms of gold from DR Congo.

This method exploits diplomatic protections, rendering the shipments virtually undetectable by standard customs and law enforcement procedures. Embassies’ diplomatic immunity creates a seemingly impenetrable route for these illegal transactions.

Kenyan authorities are now reportedly investigating the sophisticated smuggling operation, though the complex international dimensions present significant challenges to potential prosecution.

December 1, 2024
Tatu City Wars: Inside Story Of Tax Evasion, Money Laundering Probes
- Investigations by law enforcement agencies and bitter parting of ways with a former CEO have all triggered court cases.
- In other instances, Tatu-City affiliated companies are allegedly incorporated offshore to shield them from taxes.
On May 16 directors of Green Seal Properties Ltd and Zefus Properties Ltd recorded statements with the Directorate of Criminal Investigations (DCI), following summons related to tax evasion and money laundering allegations probes.
The DCI’s economic and commercial crimes unit has for months been investigating Green Seal Properties, Zefus Properties and several other companies associated with the Tatu City project for alleged money laundering and tax evasion.

Court papers filed by firms under the Tatu City umbrella, and the DCI, have shone a spotlight into several happenings around the multibillion-shilling project, which has been plagued by several allegations made in different legal battles.

Tatu City is fighting many a battle as shareholder wars, investigations by law enforcement agencies, disputed taxes, fallouts with some of its own clients, exchanges with Kiambu County and bitter parting of ways with a former CEO have all triggered court cases.

By the time Green Seal Properties and Zefus Properties were summoned in May, officers from two elite units of the DCI – economic and commercial crimes, and transnational organised crime – had interacted with the Tatu City investigation file.

The transnational organised crime unit is now in charge of the probe, as the DCI initiates mutual legal assistance from Mauritius and Bermuda, in the hope that owners of the Tatu City project left behind breadcrumbs which can be used as evidence in potential prosecutions.

In its court filings, the DCI states that it intends to also prosecute some officials of the Lands ministry and Kenya Revenue Authority for abetting the alleged tax evasion and money laundering scheme.

In May, detectives sought to hear from directors of the two companies on land transfers involving related entities under the Tatu City project as they put together a file that will be sent to the Director of Public Prosecutions once the investigation is completed.

In the course of their fact-finding mission, detectives believed they had stumbled into instances of document forgery and misrepresentation of facts, all part of the alleged scheme to launder money and dodge the taxman’s dues.

A month later, directors of Meteor Properties Ltd, Gunga Properties Ltd, Jojoja Properties Ltd and Purple Saturn Properties Ltd also received DCI summons. Their directors snubbed the summons.

The six companies cited by the DCI are all related to the Tatu City project, and are special purpose vehicles that were incorporated as part of the mixed-use development which sits on 5,000 acres in Ruiru, Kiambu County.

On Friday, an officer close to the investigation confirmed that the DCI has filed a new application at the Chief Magistrate’s Court, this time seeking access to bank accounts operated by companies under the Tatu City project and their officials.

Detectives want permission to obtain documents related to account opening information, signatories, bank balances, statements showing flow into and out of the accounts and other details they believe may aid the investigation.

The Tatu City project has made some gains since its backers hit the ground in 2008 through real estate firm Rendeavour, most notably being accorded special economic zone status in 2017.

Over the years, nearly 60 companies cutting across the corporate sector, real estate, manufacturing, hospitality and other industries have invested in the project either through land purchases or setting up premises within Tatu City.

The DCI’s working theory is that in particular instances, a Tatu City affiliate acquires land from a related company at a pittance of the market value, lowering its tax liability.

In other instances, Tatu-City affiliated companies are allegedly incorporated offshore to shield them from taxes arising from land purchases.

“Information and details of the documents believed to be in the custody of the respondents herein are crucial documents that will be used as exhibits to investigate the alleged offences of forgery, illegal dilution of shares, asset stripping, money laundering and tax evasion from proceeds of sale of these parcels of land,” DCI investigator Julius Mateh says in his affidavit.

The sale proceeds are allegedly shipped to offshore bank accounts, with Mauritius and Bermuda being some of the preferred destinations.

After directors of Meteor Properties Ltd, Gunga Properties Ltd, Jojoja Properties Ltd and Purple Saturn Properties Ltd snubbed the DCI summons, detectives filed an application before the Kahawa Law Courts Chief Magistrate, seeking authority to cart away dozens of documents.

Proxies to hold shares

Sale agreements between related firms that dealt in land, valuation reports for the properties, receipts, tax-related documents, loan paperwork and company ownership records were the subject of the application.

The DCI also sought to be supplied by Lutta & Company Advocates, and carry away as exhibits, certified copies of the agreement of sale between Kofinaf Company Limited and Jomo Kenyatta University of Agriculture and technology (JKUAT), sale agreement between MJS Mansion Mauritius and Wanachuo Investment Limited and Dexamide Properties Ltd, in respect share purchase and a parcel registered as LR No.10877.

The DCI argued that Galba Mining Limited was incorporated by Kofinaf Company Ltd, one of the main Tatu City affiliates, and became the majority shareholder in Purple Saturn, thus holding its shares as a proxy of Kofinaf Company Limited.

The DCI affidavit alleges that this arrangement was well known to Nahashon Nyagah who, together with former Kofinaf and Tatu City Ltd CEO Lucas Omariba allegedly undertook to procure proxies to hold shares in trust for Galba Mining Limited.

A principal magistrate granted the orders sought by the DCI on August 9.

By the time the companies were being served with the court orders, Green Seal Properties and Zefus Properties Ltd had overhauled their boards, and directed that any communication from the DCI be directed to their advocates, Anjarwalla & Khana.

A week later, 10 companies under the Tatu City roof, and a law firm filed an application before the same court, seeking to quash the orders granting the DCI access to the volumes of documents.

Meteor Properties, Gunga Properties, Green Seal Properties, Zefus Properties, Splendor Investments, Jojoja Properties, Kofinaf Company Ltd, Tatu City Ltd, Purple Saturn Ltd, Daykio Plantations and Lutta & Company Advocates claimed that the orders had been sought through underhand tactics.

The 11 applicants claimed that they were not aware of the investigations and that the DCI did not serve them with the court orders allowing detectives to cart documents away from their offices.

The DCI has responded to the application, filing evidence that the companies were not only informed of the investigations through summons, but that former directors of Green Seal Properties and Zefus Properties tagged their lawyers along for recording of statements at Mazingira Complex in May.

The DCI added that it served the Chief Magistrate’s order on the companies.

The Chief Magistrate’s Court is yet to determine the application by the Tatu City firms.

It is the second time that companies under the Tatu City umbrella are trying to wriggle out of tax evasion and money laundering investigations through the courts.

In April, 2022 High Court judge Esther Maina dismissed a case by Tatu City Ltd and Kofinaf Ltd seeking to block a similar probe by the Ethics and Anti-Corruption Commission (EACC).

The EACC in 2017 initiated an investigation, as it believed that the Tatu City project was being used to facilitate a form of money laundering called loan back scheme.

In that scheme, EACC’s probe indicated that some of the Tatu City affiliates had acquired loans from other related companies to conduct the land transactions.

The loans and land purchases, the EACC investigation found, seemed to be paper transactions, intended to make the companies look like they were doing legitimate business, a pattern often seen in money laundering schemes.

The EACC investigation is still ongoing.

Kofinaf Company Ltd, one of the Tatu City owners, is currently battling a Sh656.7 million tax claim from the KRA at the High Court.
The disputed taxes are in relation to income tax from land dealings in Tatu City for the years 2014 and 2015.

Kofinaf in 2016 filed its tax returns, which included capital gains on land it had sold. The company then wrote to the KRA claiming that it had erroneously included capital gains tax in its books for five pieces of land sold.

In those transactions, Kofinaf had sold land to other Tatu City affiliates – Noir Properties, Gunga Properties, Purple Saturn Properties and Jojoja Properties.

Kofinaf insisted that the land transfers had been done in 2013, two years before capital gains tax came into effect.

But the KRA in response rejected the claim on July 10, 2017, holding that there was no documentation filed to support Kofinaf’s request to amend its tax returns and remove the capital gains references.

Dismissed the appeal

This opened the door for a Sh487 million claim, which was still rising on account of interest and penalties.

Kofinaf filed an objection to the tax claim. Other tax demands and payment reminders were issued to Kofinaf as the objection was pending. The company objected to the further demands.

On May 2, 2023 the Commissioner for Domestic Taxes rejected Kofinaf’s request to amend the 2014-2014 tax returns. The amount had now grown to Sh564.8 million.

Kofinaf objected again, and the KRA rejected again.

Kofinaf challenged the decision at the Tax Appeals Tribunal in August, 2023. The tribunal in April, 2024 dismissed the appeal.
Kofinaf has now filed an appeal against that decision at the High Court, with the amount ballooning to Sh656.7 million.

That includes Sh297.18 million as the principal tax amount, Sh285.3 million in interest and Sh74.3 million in penalties.
The Commissioner for Domestic Taxes dismissed the objection on July 14, 2023.

During a National Assembly investigation into the tax evasion allegations, it was claimed that Tatu City affiliate companies were cooking books to lower their dues to Caesar.

In one instance Stephen Mwagiru, one of the local shareholders that fell out with foreign shareholders, claimed that a piece of land was sold to Jomo Kenyatta University of Agriculture and Technology for Sh842 million.

But Tatu City allegedly declared Sh235 million as the sale price in its books of accounts, effectively lowering tax liability.
A parcel sold to Splendor Investments, allegedly worth Sh2 billion, had its sale price logged in as Sh559 million.

Mr Mwagiru claimed that the Tatu City project had facilitated tax evasion to the tune of Sh1.5 billion.

Nahashon Nyagah, another local shareholder, who is also engaged in court battles with his foreign counterparts told that Parliamentary committee that the tax dodged stood at Sh6.5 billion.

Tatu City maintained that the allegations were bogus, and that Mr Nyagah and Mr Mwagiru were bent on frustrating the multibillion-shilling project.

The Parliamentary petition seeking sanctions against Tatu City and its affiliates was dismissed.

Mr Nyagah is among the local partners who have been engaged in court battles with foreign nationals who are also directors in Tatu City and its affiliate companies, since 2015.

Mr Nyagah, Mr Mwagiru and Bidco Group chairman Vimal Shah were among local partners in the Tatu City project. Mr Nyagah and Mr Shah were minority shareholders.

Mr Shah and Mr Nyagah sued their foreign counterparts Stephen Jennings (New Zealand), Frances Holliday (UK), Hans Jochum Horn (Norway), Frank Mosier (US) and Christopher Barron (New Zealand) in 2015 to block their removal from the project and its operations.

They also sued two local partners, Pius Mbugua Ngugi and Anthony Njoroge, who were on the other side of the fence.

A series of allegations and counter allegations have since been made in that and other cases pitting the two sides. The cases are still pending determination at the High Court in Nairobi.

Mr Nyagah’s camp claims that the foreign shareholders are engaging in tax evasion and money laundering. The foreign shareholders claim that their local partners intended to defraud Tatu City of large land parcels worth billions.

The foreign shareholders have countersued, accusing even lawyers and associates of Mr Nyagah and Mr Shah of aiding fraud against Tatu City and its affiliate companies.

Lucas Omariba, who was Tatu City CEO when the ownership battles begun, is now one of the respondents in the countersuits.
He was sacked in 2015 for alleged insubordination and making negative comments against Tatu City directors.

His termination letter did not indicate the reasons for sacking, which saw Mr Omariba bag a Sh27.5 million windfall for wrongful dismissal after suing Tatu City.

Tatu City ecosystem

Tatu City filed a counterclaim against Mr Omariba, which was dismissed, accusing him of sharing confidential information with third parties after being sacked. Mr Omariba was ordered to either return a Tatu City-issued mobile phone and laptop or pay the company half the purchase price of the two devices.

Justice Onesmus Makau’s 2021 judgment came as another Tatu City friend turned into a foe.

Former Kiambu governor William Kabogo sued four companies under the Tatu City umbrella in 2021, seeking to enforce a sale agreement for 100 acres valued at Sh3.4 billion.

Mr Kabogo sued alongside Gilulu Investments Ltd and Acres and Homes Ltd, seeking to stop Tatu City from terminating the deal, which had seen him pay a Sh348 million deposit in 2016 when still serving as governor.

The politician described Stephen Jennings as the controlling mind of the Tatu City ecosystem, as Chris Barron plays an executive function in the project.

Mr Kabogo claimed that Mr Jennings and Mr Barron requested him to incorporate a company in another country and use it to purchase the land by making payments to a Bermuda-registered Tatu City affiliate called West African Real Estate Holdings.

The former governor said in court papers that he rejected the move to avoid trouble with the KRA over possible tax evasion.

His Acres and Homes paid the deposit. Fundamental Property Ltd, another Tatu City affiliate, issued a termination notice to Mr Kabogo’s former advocate Mary Chege, who then transmitted the document to her client.

Despite being listed by a defendant by Mr Kabogo, Ms Chege is registered as an official of Gilulu Investments, one of the plaintiffs.
Gilulu Investments is registered in Seychelles.

In response to the suit, the Tatu City affiliates filed objections seeking to have the matter referred to arbitration in line with the sale agreement.

Ms Chege filed an objection to being listed in the suit, and later attempted to switch advocates representing Gilulu Investments. She had intended to have Gilulu Investments switch sides and support the Tatu City affiliates. The suit is still pending final determination.

When asked about some of the allegations made by investigative authorities, which are serious and transnational in nature, particularly in regards to asset stripping, forgery and tax evasion, Preston Mendenhall, Group COO Country Head, Kenya Rendeavour came out guns blazing; “Your questions resemble the narrative they regularly peddle to journalists about Tatu City. It’s quite old material actually, covered ad nauseum by NMG for years … with no proof whatsoever.”

With the Kabogo suit still ongoing, Tatu City has been entangled in fights with some of its clients.

Justice Grace Kemei on October 6 allowed Home Bridge Ltd to proceed with its construction of 652 apartments in Tatu City, after lifting a stop order initially issued against the developer.

Tatu City sued Home Bridge in 2023 at the Thika High Court, through Ahmednasir Abdullahi Advocates, arguing that Home Bridge did not get building approvals from Tatu City before embarking on the development project.

Justice Kemei lifted the stop order after Home Bridge argued through Iseme, Kamau & Maema Advocates that it sought approvals from the Lands ministry and Kiambu County only following frustration from Tatu City that culminated in an allegedly exorbitant fee demand.

Tatu City had demanded Sh46 million before issuing approvals, while the two government institutions charged Sh7 million.

Home Bridge Ltd filed evidence that Tatu City was copied in the applications for the approvals, and ensuing feedback from the Lands ministry and Kiambu County.

On account of that evidence, Justice Kemei said Tatu City could not claim that Home Bridge Ltd commenced construction without the necessary building approvals.

“The court finds that the defendant (Home Bridge Ltd) commenced construction after seeking and obtaining approval from the minister. The claim therefore that the defendant was developing the unit without approved plans is untenable. It is not disputed that the plaintiff (Tatu City) was involved in the process of approval undertaken by the Director (of Physical Planning, Ministry of Lands),” Justice Kemei said in her ruling.

Tatu City has filed a notice of appeal to challenge Justice Kemei’s ruling, even as the HIgh Court case is yet to get a final determination.

The firm insists that its approvals were a priority, and that construction could not start before Tatu City’s green light.

Home Bridge borrowed Sh2 billion from a local bank for its project and the stop order risked piling idle fees – penalties for construction delays caused by the contracting party – levied by different contractors it hired for the project.

Tax evasion and money laundering

Just six months earlier, Home Bridge scored another court victory against Tatu City.

In that case, Tatu City Ltd and Tatu Connect SEZ Ltd sued Home Bridge at the Chief Magistrate’s court in Ruiru, seeking Sh10 million in service charge.

Tatu City claimed that Home Bridge had defaulted on service charge since 2016, and that the amounts due had grown to Sh10 million, inclusive of penalties.

Home Bridge in its defence argued that service charge was to be levied by a property owners association, which had not been made operational when it was slapped with the Sh10 million demand.

The real estate firm also raised issue with some items in the billing, and questioned the process used in determining the amount of service charge to be paid by occupants in Tatu City, especially because there was no documented formula.

An audit report of the service charge levied was conducted, but not availed to Home Bridge.

A meeting requested by Home Bridge failed to resolve the standoff, and Tatu City sued.

Chief Magistrate Joseph Were dismissed Tatu City’s case.

The magistrate in his judgment found that the property owners association had not been made operational, and cast doubt on Tatu City’s authority to assess and levy the service charge.

The magistrate added that if assessment of service charge was to be done, then property owners should have been involved in the process.

Mr Mendenhall fell short of explaining how the cases that border shareholder wars, the tax evasion and money laundering investigations by EACC and DCI, the labour court matters, the cases against some clients; and the allegations made in them have affected the uptake of the project in terms of attracting blue chip firms and land sales, and instead chose to intimidate and stalk the journalist with unveiled threats.

He rubbished our queries, instead choosing to malign NMG’s commercial department; “…If things are so dire at Tatu City, why does the NMG marketing department flood us with requests for commercial partnerships? Might that be because Tatu City is successful?”
November 14, 2024
US Investigations Finds Credit Suisse Helped Wealthy American Evade Tax

A US investigation has found Credit Suisse complicit in ongoing tax evasion by ultra-wealthy Americans, the Senate Finance Committee said Wednesday.

Committee Chairman Ron Wyden, a Democrat from Oregon, released the findings of a two-year investigation into the Swiss-based global investment firm’s compliance with its 2014 plea agreement with the US Justice Department for enabling tax evasion by thousands of wealthy Americans.

“The committee’s investigation uncovered major violations of that plea agreement, including a previously unknown, ongoing and potentially criminal conspiracy involving the failure to disclose nearly $100 million in secret offshore accounts belonging to a single family of American taxpayers,” it said in a statement.

“The investigation also shed new light on the extent to which Credit Suisse bankers aided and abetted offshore tax evasion by U.S. businessman Dan Horsky, who pleaded guilty in 2016 to one of the largest criminal tax evasion cases in American history,” it added.

The committee said it requested information from Credit Suisse on other large and undeclared accounts belonging to ultra-wealthy Americans with more than $20 million at their bank.

Credit Suisse said it identified 23 accounts, with more reviews underway, by the time of the conclusion of the investigation.

The amount concealed in violation of Credit Suisse’s 2014 plea agreement is more than $700 million, according to the committee’s findings.

“At the center of this investigation are greedy Swiss bankers and catnapping government regulators, and the result appears to be a massive, ongoing conspiracy to help ultra-wealthy U.S. citizens to evade taxes and rip off their fellow Americans,” Wyden said in the statement. “Credit Suisse got a discount on the penalty it faced in 2014 for enabling tax evasion because bank executives swore up and down they’d get out of the business of defrauding the United States. This investigation shows Credit Suisse did not make good on that promise, and the bank’s pending acquisition does not wipe the slate clean.”

Credit Suisse pleaded guilty in May 2014 to conspiracy to aid and assist US taxpayers in filing false income tax returns with the Internal Revenue Service (IRS), to help taxpayers hide offshore accounts from the tax agency and agreed to pay a $2.6 billion fine — the highest by then in a criminal tax case investigation.

After its biggest investor, Saudi National Bank said it could no longer financially assist Credit Suisse, and despite the bank taking a 50 billion Swiss francs ($54.4 billion) loan from the Swiss National Bank, depositors quickly pulled their money out – leading to the bank’s collapse.

Its rival, UBS, reached an agreement on March 19 to buy Credit Suisse for 3 billion Swiss francs.

March 29, 2023
DCI Seeks Tax Evader Wambui Call Records To Out Those She Was In Touch With Before Weston Escape

Detectives sought call logs belonging to billionaire Jubilee party campaign financier Mary Wambui Mungai from Safaricom in a bid to establish who she was communicating with a few days before she presented herself in court.

Evidence presented before the anti-corruption court last week showed that the investigating officer Amina Ado asked for call logs from two mobile phone numbers as they tracked down Ms Mungai, who was allegedly on the run.

The Directorate of Criminal Investigations (DCI) wanted to know who Ms Mungai and her daughter Purity Njoki were communicating with amid suspicions they were getting tips as the police closed in on them.

A warrant for their arrest had been issued after they failed to appear before the court to answer to charges of evading tax amounting to Sh2.2 billion.

Ms Ado said she first tried calling the numbers but they were switched off.

“That on 6th December, I wrote a requisition letter to Safaricom (K) Ltd requesting for call data records in respect of mobile numbers 072******* and 070******* used by the respondents,” she said.

The mobile company, however, did not respond to the request, prompting the police to circulate a signal to all police stations for the duo to be arrested if spotted.

Safaricom cannot disclose a customers’ information unless through court order or in compliance with the law.

“We may disclose your information to law enforcement agencies, regulatory authorities, courts or other statutory authorities in response to a demand issued with the appropriate lawful mandate and where the form and scope of the demand is compliant with the law,” the company says on data privacy.

Ms Mungai’s lawyer had claimed she had sought treatment at Nairobi Hospital and later at Kiambu Level 5 hospital. Ms Ado said that she visited the hospitals but she could not get her records.

The Kenya Revenue Authority (KRA) placed an alert at the border points to prevent Ms Mungai from leaving the country.

The duo escaped a police dragnet at Weston Hotel last Wednesday moments before officers raided the facility on Nairobi’s Lang’ata Road.

Ms Mungai had reserved three rooms at the hotel, which is associated with Deputy President William Ruto. Her name was, however, missing as a guest at the reception.

The businesswoman, who has secured several State tenders, is known in political circles as Wambui wa Ruto due to her close association with Dr Ruto especially at the height of the 2013 and the 2017 elections.

The two, however, left behind their personal belongings, including an identity card, bank cards, a firearms licence and a temporary travel permit to Zambia, at the hotel.

Evidence presented before anti-corruption chief magistrate Felix Kombo states that the police were tracking mother and her daughter using her mobile phone but they had switched off the gadgets.

“The records at the hotel maintained at the reception had not listed the duo as guests on December 8 despite their personal belongings being found there,” said the investigating officer.

After denying the charges, the court ordered them to deposit cash bail of Sh25 million each to secure their release. The magistrate gave them an option of posting bond of Sh50 million each and two sureties of Sh25 million each.

“I have considered the fear that the State has in relation to the fact that a valid Zambian temporary travel document was recovered around this time when the accused appeared to have been engaging the investigators in a cat and mouse games,” the magistrate said.

They were also directed to present themselves before the police attached to the KRA today for their fingerprints and other details to be taken.

December 14, 2021
Collapsing Mulleys Supermarket Under Probe For Tax Evasion

Mulleys Supermarket in Machakos County is in the eye of a storm over alleged widespread tax evasion fraud claims. On Friday last week, the retailer closed down its branch situated at the Machakos bus stage in an effort to ward off the instigators from accessing their books of accounts.

The pioneer locally owned supermarket in Machakos was at one time one of the fastest-growing retailers in the region but seems to have fallen back on tax returns, sources have revealed. Top KRA investigators have been tasked to probe the chain’s weekly returns at a local bank.

KRA Investigators are said to have unearthed a massive tax evasion racket at the supermarket

The supermarket is conveniently located opposite the said bank on the way to Machakos town center. According to sources, KRA is probing claims that senior managers at the bank are involved in a massive cover-up in the tax evasion racket. KRA Anti-fraud unit and ICT experts are also investigating a senior Nairobi based auditor who has been blacklisted as a “tax scammer” aiding several firms to evade paying taxes.

The retailer operates another branch at Mulolongo and is said to owe KRA up to Kshs 300 million in taxes during the period of 2019-2021. The supermarket stocks goods ranging from home furniture, Electronics, Home appliances, Clothes, Home crafts, Farm fresh, Home use products, wines and spirits products.

The supermarket also retails all basic essential commodities like maize flour, milk, bread, snacks, and domestic cutlery.

In the latest development, Mulleys Supermarket has announced the closure of five of its 10 branches, in a shock downsizing plan that has seen hundreds of staff laid off.

The supermarket which had presence in four counties of Nairobi, Machakos, Kitui and Makueni shut down half of its branch network as it struggled to stay afloat amid mounting debts and empty shelves.

In an ambitious expansion programme that may have gone wrong, the supermarket closed two of its main branches in Machakos town – Mulleys Express near Machakos bus station and Mulleys Pioneer situated opposite Machakos General Hospital.

Also affected were the Mulleys Kitui branch, Mulleys Highway in Mlolongo market and Mulleys Tala branch.

According to a notice posted at the entrances of the closed outlets, the supermarket management said their business was undergoing a necessary restructuring and reorganisation process.

DEBT BURDEN

“We highly regret all the inconveniences caused by this occurrence but do kindly request you bear with us. We shall keep you updated on new developments along the way” read the notice.

The management announced that its operations will continue in Mulleys Embakasi in Nairobi, Mulleys Mtaani in Mlolongo, Mulleys Masaa in Machakos, Mulleys Jibambe in Tala and Mulleys Emali in Makueni County.

Signs that the debt-ridden retail chain was struggling with possible cash flow problems became evident six months ago when their shelves became empty.

November 15, 2021