Connect with us
https://crm.cytonn.com/events/weekly_real_estate_site_visit

Investigations

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

Published

on

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.

Related Content:  Sonko In The Running To Buy The Sh3B 680 Hotel From Jac Patel

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.

Related Content:  A Deadly Revenge Attack At Lokichoggio AIC Secondary School Leaves Seven Dead As Security Forces Incompetence Costs Students Lives

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.

Related Content:  How Italian Tycoon Alessandro Torriani Tricked And Conned Local Land Owner To Buy The 62 Acres Of Land On Funzi Island With Sh500,000 Only

“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.


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
Continue Reading
Advertisement

Investigations

Britam Risks Losing Billions As Court Rules In Favor Of Cytonn Over Unsubstantiated Fraud Claims

Published

on

 

Back in 2014 Britam accused four of its former employees of theft of billions of shillings, to the tune of kes. 8 billion, and sought to file criminal complaints about them. Britam said that the theft was discovered after audits done by accounting firm KPMG and law firm Coulson Harney.

The four former employees refuted this claiming that no such theft had happened and wrote to Britam asking them to disclose the said reports to prove their innocence. Britam, however, refused to disclose the audit reports and the four former employees then filed a lawsuit in the high court in 2016 seeking to compel Britam to disclose the audits.

After three years of litigation, the judge ruled and ordered that indeed Britam must disclose the said audit reports if they are relying on them to allege theft by its former employees. Additionally, the judge found Britam’s conduct so unbecoming that it also slapped Britam with the penalty of refunding the accused former staff with the cost of the lawsuit.

Contacted for comment, our source at Britam says that the board is furious with the CEO, Benson Wairegi, why he filed frivolous lawsuits just for the sake of trying to kill competition from former staff. The new investors IFC and Swiss RE are apparently unhappy with Mr. Wairegi and want to see him fired by the end of the year.

The stock has tanked by over 75% since he lost his team to Cytonn and is now trading at below IPO price. Our sources tell us that the new investors, IFC, Swiss Re, and AfricInvest are frustrated because they’re sitting on paper losses, having bought the share price at kshs. 15 and now it is trading at below 9 bob.

Related Content:  How Kisumu MP Ken Obura and His Briefcase NGO Frustrated a Ksh.30M Medical Equipment Donation

When we contacted a source at Cytonn, she said that “all their games shall come to a sudden and painful end. We are going to go after them for billions of shillings for damages. They are the ones with really big legal issues. The judge was very clear in his ruling. And we can assure you, the so-called forensic audits don’t exist, they have just fixed themselves with their lies”

Sooner or later the market will realize that this is the biggest corporate lie ever perpetrated by a listed company to investors and in plain sight of regulators and international shareholders like IFC and Swiss Re.

Our investigative desk obtains the ruling below.

SKMBT_C364e19032114190


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
Continue Reading

Investigations

Shadowy Billionaire Humphrey Kariuki Is On The Run Over Sh3Billion Monthly Tax Evasion And Massive Fraud

Published

on

Businessman Humphrey Kariuki.

Kenya’s leading alcoholic spirits manufacturer Africa Spirits Limited (ASL) is on the spot following a raid conducted by DCI and Kenya Revenue Authority officers. The joint raid that was conducted at the company’s factory in Thika was headed by the head of Flying Squad Musa Yego in conjunction with senior officials from KRA.

Investigators from KRA and DCI during the raid seized around 21 million counterfeit excise stamps and 312,000 litres of suspected illicit ethanol with an estimated tax potential of Sh. 3billion monthly at Africa Spirits factory in Thika, in an operation that commenced on 31st January 2019.

Yego said they conducted the raid following a tip-off. He added they were also investigating possibility of production of sub-standard alcohol in the factory. “We have arrested three employees who would be arraigned in court. We are also looking for the owner of the company,” said Yego. Ann Iringu a deputy commissioner at KRA said the raid was geared towards fighting illicit trade. Iringu said they were also investigating to see if the company conforms to taxation laws.

She added they had also confiscated some of KRA stamps.“We will also carry out investigations to ascertain if ethanol that has been confiscated here is illicit and if alcohol production going on in the factory is illegal,” said Ms Ngugi. The KRA official said ongoing investigations which will take about a week will reveal if the company has been evading tax and to what extent. She appealed to KRA officials at the country’s border points to be vigilant in order to ensure no illegal goods get access to the Kenyan market.

Related Content:  Leave Nyakundi To Me, I'll Not Take Him To Court Like Sonko But Silence Him Forever Like I've Done To Rest Who Can't Speak, Moses Kuria Warns

Established in 2004, African Sprit Limited has been instrumental in shaping the local alcohol beverage market, with its brands leading various segments of Brandy, Gin and Vodka.

Some of it products include Legend Gold Brandy, Blue moon Vodka, Blue Moon Vodka flavors (Apple, Mango & Ginger), Gypsy King Gin and The Furaha Range among others.

African Spirit Limited is owned by shadowy Billionaire Humphrey Kariuki who has been implicated in other scandals including drug trafficking even though the courts recently cleared his name of the accusations. Kariuki who co owns empire with Harun Mwau are said to be falling apart after a 40 year partnership.

The two were named in the drug cartel. Amongst their known businesses includes The Hub an upmarket mall in Karen, Mount Kenya Safari Club In Nanyuki, Wines of the world amongst many others that we shall mention in our subsequent series in exposing a long history of fraud including Kariuki’s Involvement in South Sudan war where his oil company was involved in looting the funds and fueling the escalating war.

Last year, the government scuttled Wine of the World Beverages bid to exclusively import and distribute exotic wine and spirit brands from seven international suppliers to avert a monopoly.

In a statement, the Competition Authority of Kenya said the company’s exclusive distributorship agreements with the distributors would have seen it dominate the market and lock out rivals at the expense of consumers.

His roots in South Sudan is so deep that Salva Kirr spends at his opulent Dik Dik Gardens, Kileleshwa home. Kiir In a report by Sentry was named amongst South Sudan’s leaders use the country’s oil wealth to get rich and terrorize civilians.

Related Content:  How Kisumu MP Ken Obura and His Briefcase NGO Frustrated a Ksh.30M Medical Equipment Donation


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
Continue Reading

Investigations

‪DCI Recommends Charges Against Five Local Banks Over Involvement In The NYS II Heist As DPP Haji Forms Team To Review Files‬

Published

on

DPP Noordin Haji.

Trouble looms for banks and officials who were involved in the illegal NYS II transactions a scandal that saw Sh8B embezzled. DPP Noordin has issued a statement on the progress following investigations on the marked banks by the DCI.

DCI investigations as directed by the DPP on the criminal culpability has found five banks liable; Standard Chartered, KCB, Equity,Co-Op bank and DTB all have a case to answer. The banks violated restrictions that govern banks in Kenya by facilitating flow of proceeds from crime and money laundering.

Investigations established that the Standard Chartered Bank received a total of Sh.1,628,902,000 between January 2016 and April 2018 out of which Sh.588,558,000 was suspiciously transacted by bank’ Officials without reporting to the Financial Reporting Center as opposed to the POCAMLA regulations.

KCB according to the investigations had received Sh800M of which Sh148,397,000 was suspiciously transacted by bank officials without sticking to the POCAMLA regulations.

Equity Bank received Sh.886,426,904 and that Sh264,200,000 and USD58,000 was transacted without adherence to the regulations.

Diamond Trust Bank which is currently under prove over involvement in helping Dusit terrorists launder their money for the attack, is in the frying pan as well. Investigations reveal that, the bank had received Sh.164M out of which Sh27,946,298 went without being captured by the regulatory board.

Co-Op Bank received Sh.250M and suspiciously transacted Sh.25M without reporting. DPP has since constituted a team of senior prosecutors who’ll review the files and give recommendations in the next two weeks.

DTB had been fined Sh56 million by CBK while Co-operative Bank will pay Sh20 million. The five banks handled a total of Sh3.5 billion from NYS with StanChart handling the largest transaction worth Sh1.6 billion followed by Equity Bank at Sh886 million, while KCBprocesses Sh639 million. The same banks involved in the NYS I are also the ones being chopped over NYS II. It seems the fines never worked so the punishment this time should even be heavier.

Related Content:  How Italian Tycoon Alessandro Torriani Tricked And Conned Local Land Owner To Buy The 62 Acres Of Land On Funzi Island With Sh500,000 Only


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
Continue Reading
Advertisement

Most Popular