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Court Paves Way To Probe Tatu City For Money Laundering

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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