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Investigations

‪KRA Boss Njiraini Entangled In A Tax Evasion Scam On Undervaluing A Sh2.93 Billion Property Paying Only Sh160 Instead Of Sh29M‬

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Njiraini

Kenya Revenue Authority Commissioner-General John Njiraini undervalued a Sh2.93 billion property acquired in Nairobi, denying the taxman millions of shillings in stamp duty after paying only Sh160, documents filed in court claim.

The filings, which effectively allege tax avoidance, indicate that Mr Njiraini paid the amount as stamp duty for a property jointly owned with Kenya Revenue Authority Staff Pension Scheme Registered Trustees that was bought at a staggering Sh2.93 billion.

In the High Court filings, it is alleged the taxman potentially lost Sh29 million, being one percent of each share that Mr Njiraini — listed as a director and respondent in the case — and KRA Staff Pension Scheme Registered Trustees acquired.

In transfer documents presented as part of the evidence, Mr Njiraini and the KRA Staff Pension Scheme Registered Trustees acquired Corporate Business Centre in 2015, a building in Nairobi’s Upper Hill, which currently hosts some of the taxman’s offices.

The acquisition saw Mr Njiraini and the pension scheme replace the original owners and became new shareholders — effectively owning the property and the land it occupies.

The property is registered under Corporate Business Centre Limited. The previous shareholders and directors were Kirankumar Manubhai Patel and Mandip Singh Amrit.

Mr Amrit transferred his one share to Mr Njiraini while Mr Patel transferred his one share to the KRA Staff Pension Scheme Registered Trustees.

The two shares were valued at Sh100 and, therefore, it is this amount that stamp duty was paid for and not the Sh2.9 billion.

The revelations are contained in a suit filed by Lustman and Company Ltd that was designated as the lead estate agent between Mr Patel and Mr Amrit as directors of Corporate Business Centre Limited and the new directors.

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Lustman Ltd accuses both sides of engaging in fraud by “deliberately avoiding payment of taxes by not declaring the actual purchase price of the suit property by sale of the shares purchased and allotted, failing to disclose the correct and true value of the sale transaction in the shares transfer and failing to pay the requisite stamp duty for the shares transferred”.

Lustman insists that by undervaluing the value of a share capital to Sh100 and not half of Sh2.9 billion amounts to contravention of Section 45 of the Anti-Corruption and Economic Crimes Act.

Mr Njiraini, KRA Staff Pension Scheme Registered Trustees and the Corporate Business Centre denied the accusations.

“The defendants deny the particulars of fraud enumerated by Lustman. The defendants were under no legal obligation or contract to disclose to Lustman details of the purchase transactions,” the defence says.

In the suit papers, Lustman further charges that despite having been the lead agent for the transaction, the two sides secretly connived and dropped them from the proceedings when the deal reached the penultimate stage thereby denying the company its commission.

“By an agreement in writing contained in the letters dated 08/08 2014, 12/08/2014 and 14/08/05 2015, Lustman Limited, which is a duly registered estate agent, was requested and agreed to act as the Corporate Business Centre Limited agent in getting and sourcing for a purchaser for its property and the building thereon situated in the upmarket area of Nairobi Upper Hill area … In consideration for a commission of two per cent of the sale price,” Lustman noted.

The agent would have pocketed at least Sh58 million. Lustman further says it dutifully devoted time to search for a buyer before settling on the pension agency.

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But unknown to the agents, the property was acquired through purchase and transfer of shares of the company registered as the owner of the building namely Corporate Business Centre Limited.

“Out of the sale transaction valued at Sh2.93 billion, the defendants failed, refused and have rejected to pay to Lustman Ltd for its services rendered as an estate agent thereby denying it its rightful commission despite being aware that Lustman introduced Mr Njiraini and the KRA Staff Pension Scheme Registered Trustees to the Corporate Business Centre Ltd after which they bought and had transfer in their favour,” Lustman says.

On December 18, 2015, Corporate Business Centre Ltd directors, Mr Patel and Mr Amrit, held a meeting that resolved to transfer the shareholding to the new owners.

Additional directors appointed on that day include Constantine Kandie, Evans Kaikai, Kimotho M’ Mukindia, Fiona Waithira, Christopher Were, Samuel Tororei and Alfred Maritim.

The property in question is located on Elgon Road, Upper Hill Nairobi. It sits on two acres and has a lease of 99 years from October 1, 1988.

It has 266 parking lots and its initial selling price was Sh1.8 billion as indicated in a letter by Lustman Ltd to KRA in July 2015.

In his defence, Mr Patel said at no time did he and Mr Amrit contact Lustman Ltd as estate agents.

He said the three letters Lustman Ltd mentions that originated from Corporate Business Centre Ltd were not from him or Mr Amrit, and disowns one Morrison Wayaya who had signed the letters on behalf of the property company.

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“All transactions by the Corporate Business Centre over the property and in particular letters and contracts were always signed by both the directors. Further, all the agents were engaged through signed contracts which bore the signatures of both the directors,” Mr Patel swore in his response.

He further states that correspondence between the Corporate Business Centre and KRA Staff Pension Scheme Registered Trustees was not copied to Lustman Ltd.

“In any event, there was a billboard on site advertising the property for sale and the recommended letting agent on the billboard was Knight Frank. The availability of the building for sale was therefore a matter of public knowledge,” Mr Patel says.

In his defence, Mr Amrit echoes Mr Patel’s stand. Mr Njiraini and the pension scheme trustees said that at no time did they contact Lustman Ltd.

But in their reply to the denials of Mr Patel and Mr Amrit, Lustman Ltd states that Mr Woyaya was the general manger of their property.

The company further indicates that its employees introduced the representatives of Mr Njiraini and those of KRA Staff Pension Scheme Registered Trustees to the offices of Corporate Business Centre in Westlands, Nairobi.

“The claim of there being a billboard by Knight Frank and the issue of public knowledge is therefore not applicable to this suit,” Lustman Limited says. The High court is yet to set the hearing dates for the suit.

via DN.


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Investigations

Call Into Action For DPP To Revive Case And Arrest Stephen Githaiga The Fraud TARDA Boss Who Falsified His Birth Dates To Extend Term In Office

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Former TARDA boss Steven Githaiga.

Githaiga was one of the beneficiaries of a failed, compromised judicial system and his close contacts to the owners of power made him get away with a criminal act, that of falsifying his identification data. Stephen Maina Githaiga, which is his name captured on his national ID card he changed to Stephen Ruimuku Githaiga on his passport.

He altered his birth year from 1953 to 1958 to illegally extend his tenure. In this period, Githaiga earned Sh10 million illegally as salary which is outright criminal that he must be held into account for.

Githaiga also faced accusations of hiring 37 employees without the board’s approval. In a court petition filed earlier this year in March, they want him to pay Sh13.7 million, the total basic pay earned by the 37 he allegedly hired. Here’s a man who practiced nepotism at the highest grade and employed only his family members and close friends.

For long, Githaiga ran Tana & Athi River Development Authority(TARDA) as his own household. Stephen Githaiga First off, his initial and actual name on the ID card number 1901968 is Steven Maina Githaiga date of birth 1953, and he fraudulently changed to Steven Githaiga Ruimuku birth date 1958 in his passport no A1593455 acquired on 02/02/2011. By this, he reduced his age by five years as a scheme to allow him to serve more years in the industry.

The open irregularity was spotted by the Auditor General Ouko in the accounts of financial year 2013/14, and the matter was taken to EACC for investigations but knowing the nature of things in Kenya, the embattled MD compromised the commissioners. Intel reached Kenya Insights then indicating that the parastatal was set to receive about Sh.6B for Athi River conservation and upgrade projects, and it was for that purpose that Githaiga structured ways to buy time and tap into this cash. He used that allocation as the bargaining point with the EACC and anyone who dared raise a voice on his irregularities.

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In his 2013/14 report, the Auditor General noted that TARDA had lost Sh717,088,891. In his 2017 report, the AG said that the authority had received Sh.247,572,911 but couldn’t account for Sh.32.637,973 which in Kenyan terms is looted money. We’ve not even gotten into 2016/17 when the authority had multi billion projects but we will break it down in our subsequent series. Irregularities in tender awards which was also put on Githaiga cost the company huge loses.

Githaiga was interdicted for misappropriation of Ksh.190M for ESP programme in TANA DELTA which he has never accounted for to date. EACC detectives Eunice Hinga and Ibrahim Lorot who were handling his cases were accused by staff members in their report to the US of having been heavily compromised such that his disobedience to EACC summons went unpunished and his fines left to catch dust, they must therefore be investigated as well.

Githaiga bucket of lies included him holding a PhD from CUEA, however, our investigations revealed otherwise, he only went to Mosoriot TTC where he went for his P1 course and that’s the furthest he went. In his bio, he claims to be a lecturer at USIU in the business department, Kenya Insights has reached to the university who disowned and certified that he was not a lecturer in the school as claimed.

Also, an area that should interest the investigators, the 165 square kilometre High Grand Falls Dam, that was to cost Sh150 billion, and expected to hold over 5.6 billion cubic metres of water that to irrigate over 250,000 hectares of land and produce over 700MW of electricity. The devil is in the details.

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We’re now calling upon the ODPP and DCI to revive this case in which Kenyan taxpayers money must have been embezzled in billions and recover the stolen loot. Masinga Dam Project which was to be constructed at a tune of Sh.6B and what was one of the main reasons Githaiga extended his term by falsifying his age was also his fraud scheme. In fact , the Treasury had at one point refused to approve funds.

Interestingly, given his embezzling nature, Githaiga is alleged to have had approached Chinese Construction Cartel for the construction of his dam. They even bribed him with his current V8 car as a tip to be awarded the tender. These accusations should give investigators the leads they need.

Githaiga is also accused of having stolen from TARDA a LandRover Discovery Reg No. KAD 266D which he sold to current National Assembly Speaker, Justin Muturi who doubles as his closest friend. Githaiga’s relationship with Muturi explains why the unresolved issues on audited accounts have never been handled despite having been tabled to the Public Investment Committee several times. It were unfortunate that the speaker could have used his position to block out the petition and opted to protect his friend and if anything, Muturi himself is a beneficiary of the Githaiga’s looting since he sold him the car.

As we embark on a long term campaign to revive TARDA looting amongst other forgotten files, we believe in the competence of the DPP Noordin and DCI Kinoti that the likes of Githaiga who for long thought they’re untouchable and looted public funds without hiccups, need to be brought to books and more importantly the illegally acquired wealth be recovered and such characters be thrown into jail.

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Githaiga’s case is special because he’s for long fronted that he’s untouchable given his close relationships with the DP Ruto and President’s cousin Muigai. He even made contributions in millions to the Jubilee campaign kitty as a way of buying himself security. This is going to be one of the tests and we’re challenging and watching which way the ODPP and DCI are going to take given the open illegalities that took place in Githaiga’s tenure, he must not get away with this and we’re keen to realize justice.


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Investigations

Lobby Group Wants Co-Operative Bank And Nairobi County Assembly’s Salary Deal Investigated With Corruption Red Flags Raised

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Nairobi County’s Assembly.

A concerned city resident, Kelvin Njihia has written to the anti corruption body EACC and DCI to launch investigations into widespread corruption and impunity cases at the capital’s county assembly.

In a letter addressed to the two bodies, Njihia claims  there are serious integrity and public trust issues within City Hall. He alleges that the County assembly has gone against the set threshold by Salaries and remuneration commission restricting members not be in more than four committees.

According to his findings, most senior members in the board and their allies, have occupied more than four committees thereby contravening the law. The petitioner want members of the assembly occupying the extra committees to be investigated and prosecuted over corruption and the impunity displayed. He lists top officials flagged in his findings including;

  • Elias Otieno Okumu- 7 committees.
  • Esther Waithera Chege- 6 committees
  • Abdi Ibrahim Hassan- 6 committees
  • Peter Wahinya Njau- 5 committees
  • Peter Anyule Mwatok- 5 committees
  • Juliet June Ndegwa- 5 committees

 

Rest of the list

Besides, the concerned citizen coalition want the assembly to be probed as to how salaries of the members is channeled through cooperative bank contrary to the SRC’s directive and s contravention of county and national laws.

The petition also noted that the suspended County’s assembly clerk Jacob Ngwele who’s out of office over miss appropriation of funds still executes official duties despite the court’s directive. Ngwele in what the petition claims to be a contempt of court, recently invited public’s participation in approval of Halkano Dida Waqo as County’s Chief Executive Officer for ICT in what is flagged as one of many suspicious appointments.

The questionable advertisement signed by Ngwele on Daily Nation.

Ngwele himself was illegally appointed into office and being investigated for the same. Petition also want the commission to speed investigations and findings following the impeachment of County’s Speaker Beatrice Elachi.

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They want the Ethics and Anti-Corruption Commission to give updates on the Majority leader of the Nairobi County Assembly Mr Ibrahim Abdi Hassan who had been summoned by the commission over the City Hall clash pitting members against Speaker Beatrice Elachi.

EACC ordered Hassan to appear at the Integrity Centre on September 12, 2018 to record a statement that will aid in the investigation of members’ conducts. He’s alleged to have conspired with members in wider plot to oust the speaker. According to the petition, Elachi was kicked out due to her lack of corporation in fraud schemes hatched by the board members.

Petitioner wants the DCI to dive in and investigate why the county’s salaries are being channeled through co-operative bank and not directly from central bank to individual’s accounts in what is read with suspicions.


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Investigations

FRAUD: Bungoma County’s Nzoia Water Services Board Sneakily Attempts To Impose Kennedy Wekesa Kilali As The MD

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Ag. MD Kennedy Wekesa.

Nzoia Water made an advertisement for open positions of Managing Director and Head of Internal Audit and Risk Management in daily nation dated October 23,2018 page 18 under anonymous company in western Kenya.

The following non conformities were noted which do not either conform with industry practices and approved operational HR Manual of the company as per the attached Advertisement:

1. The advertisement was only mentioning a leading water company in Western Kenya,excluding Kitale which falls in Rift Valley. Does it mean Kitale has separated from Bungoma and they have formed their own company? If not what is the effect of these on long term relationship with Trans-nzoia County?
2. The advertisement of MD’s position failed to meet the minimum threshold as per legal notice no.137 of 2012 which requires inviting the prospective candidates to have Masters Degree and registered members of respective bodies e.g  for Engineers should be registered with Engineers Registration Board(ERB) OR Institute of Engineers of Kenya ( IEK) and not Institute of Engineering Technicians (IET)  meant for Technicians who are lower cadre staff of the company.

The advertisement as it appeared on the dailies.

3. The requirements of chapter six was not observed in the advertisement which requires the prospective applicants to submit their chapter six compliance during the application as it forms part of shortlisting process and not to produce them during the interview.
4. The last advertisement through daily Nation were received without matching list from them,which resulted in most candidates who had applied not being shortlisted as their applications never reached the company’s offices. There’s no surety that the process will not be compromised in favour of specific candidates?
5. The Ag. Managing Director has failed to implement the inspection report by WASREB.(According to workers petition)
6. The advertisement should have been made either through the consultant or in the company’s name for it to attract competitive qualified candidates and not the way it is hidden as it is aimed to prevent competition and thus attract less applicants.
7. Therefore ,the recruitment process be stopped and the position be re-advertised in line with the above requirements.

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Kenya Insights allows guest blogging, if you want to be published on Kenya’s most authoritative and accurate blog, have an expose, news, story angles, human interest stories, drop us an email on [email protected] or via Telegram
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