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

Investigations

How Chinese Firm Housemart Limited Conspired To Steal Sh3B Of Kenyans Money Through Large Scale Money Laundering And Tax Evasion

Published

on

Mr Ye Wei, Managing Director Housemart Ltd In Court.

Kenya struggles to stay afloat with heavy foreign and domestic debts and the weight rests on the taxpayers who by design have to bare the wrath. We’re spending more than we’re earning interms of revenue collection which by reports has not been meeting targets. KRA has been failing to meets its obligations and they largely attribute it to non paying population.

Kenya and China have created a commercialized bond in the past decade and we’re witnessing an increased number of Chinese investors streaming into the country given cordial relationships to set up their companies here.

There’s an influx of Chinese nationals in Kenya but that’s a story for another day, the immigration department is currently doing a swoop on illegal immigrants many of which are Chinese and have been deported, just a few though meaning the problem still is intact.

Apart from mistreatment of locals, a good number of Chinese firms have been accused of several malpractices and fraudulent rings including tax evasion and that’s why we’re talking about Housemart Company Limited a subsidiary of Sunda International Ltd a leading exporter in building materials.

The Chinese company’s offices which are located on Mombasa road and are involved in the importation of various items including construction materials and household commodities, are also at the centre of a multi billion tax evasion scandal.

High Court’s Lady Justice Hedwig Ong’udi recently issued orders freezing the accounts of Housemart Company Ltd following an application by the Kenya Revenue Authority claiming that the Chinese firm has evaded tax through under declaration of Value Added Tax of its products since 2010 totaling to Sh2B.

The order was issued for preserving funds and prohibiting the release, transfer, payment or other dealings involving the money held by the company at Barclays Bank of Kenya, Standard Chartered Bank, NIC Bank and Bank of Africa pending determination of the suit.

Related Content:  Beastiality: Grown People Paying Huge To Watch Teenagers Having Sex With Animals in Mombasa

KRA says the Chinese company is engaged in tax evasion and money laundering through the creation of “briefcase companies” who have no physical presence in Kenya and used to syphon millions of shillings from the country.

According to preliminary findings of investigations done by KRA and presented before the court, it revealed that the company has evaded taxes amounting to sh2,243,781,488 between 2015 to 2017.

Playing their cards smart, Majority shareholders and beneficial owners of Housemart are foreigners and corporations with foreign addresses which are suspected to be tax havens, therefore, making it difficult to repatriate the funds once they exit Kenyan borders, a line of argument raised by KRA’s lawyer Sylvester Okello.

According to an affidavit filed by KRA forensic investigator Cyrell Wagunda, they received information in January that six companies were registered and used to open bank accounts in which proceeds from sales by Housemart Ltd were being channelled.

The companies include Colila Ltd, Akubi Ltd, Nkemm Ltd, Obest Ltd, Sunda Industrial Company Ltd and Wise Databank Ltd.

He swore that he discovered tax fraud and money laundering through diversion of sales and using fictitious forms to claim VAT refunds.

“We discovered they were using their employees or security groups contracted to transport cash totalling sh4 billion. Once the funds are transferred to the six companies’ accounts, they then wire it to another company based in China without declaring their tax,” swore Wagunda.

In one instance, the KRA official stated that a total of Sh515 million was deposited to Colila Ltd, Akubi Limited received Sh241 million, and Wise Databank Limited received Sh3.5 billion between 2015 and 2017.

Related Content:  KBC – PWC Conspiracy: Ruto's 2022 Plan

Separately, Housemart’s MD Mr Ye Wei was also caught in the same problem, the Chinese national was charged in a Nairobi court with three counts of tax evasion. Mr Ye was arraigned at the Milimani Law Courts where he was jointly charged with others not before court evading on payment of tax amounting to over Ksh 800 million and an additional count of failing to declare sales amounting to more than Ksh 3 billion.

He denied the charges and was released on a Ksh 2 million bond with a surety of a similar amount or a cash bail of Ksh 1 million. The case will be heard on November 21, 2018.

Between 1st January 2016 and 30th June 2017, he is alleged to have willfully defaulted in paying Ksh 154,328,071 being income tax payable to the Commissioner of Domestic Taxes in contravention of the Tax Procedures Act.

In the second count, Mr Ye is alleged to have defaulted in paying Ksh 583,353, 575 between 1st January 2016 and 30th June 2017, while in the third count, the defaulted income tax is indicated as amounting to Ksh 85, 082, 282. This is for the period between 1st January 2015 and 30th January 2017, according to the charge sheet.

In the fourth count, Mr Ye is alleged to have deliberately defaulted on an obligation to declare sales amounting to Ksh 3, 232, 584.773 for the period covering 20th January 2016 and 20th December 2017 to the Commissioner of Domestic Taxes as required by the Value Added Tax.

A look into this raises a serious concern over the levels of money laundering going on in the country more specifically with Chinese firms which I gather are very rampant. Outright, all these can’t hapoen without complicity and conspiracy with local authorities. It’s in this backdrop that as investigations advances, those KRA officials who’ve helped the company engage in this scam must also be investigated.

Related Content:  Who Killed Mercy Keino? Miguna Miguna Reveals

Kenya can’t afford to humbly stay in a relationship with China when its not symbiotic. I doubt if there could be leniency if a Kenyan engaged in such scams in Beijing. Companies like Housemart and directors like Ye Wei ought to have their operation licenses withdrawn and conspirators like the fraud manager Ye and alike be thrown in jail.

Goodnews is the accounts are frozen even though Housemart has sued KRA for their action. While denying any link to the alleged malpractice, the firm noted that the caveat placed on its bank account has crippled its business operations and pleaded with the court to lift the freeze order.

Lemme say in my opinion, they deserve to suffer and even be thrown out of the country and operations if they can’t pay taxes and laundering money to tax havens. Doing business with such a company is also another risk one need to consider before inking any deal because you can imagine how many businesses have been now stalled with the accounts frozen. They should remain frozen until taxpayers recover their stolen money.

Money laundering and tax evasion is now becoming a real issue and Kenya Insights is dedicating efforts to highlight and expose scamming companies like Housemart, we’re therefore appealing for any useful information and tips on this topic so we can expose these frauds. Send me an email ([email protected])


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

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:  Who Killed Mercy Keino? Miguna Miguna Reveals

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:  The Rise And Fall Of Strongman Vimal Shah


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 Four KCB Employees Conspired To Steal Sh72M From Client’s Account As Evidence Proves Most Banking Frauds Commited By Own Staff


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

How Gulf African Bank Conspired To Defraud A Client His Sh500M Property In An Insider Mortgage Fraud Scheme

Published

on

Gulf African Bank managing director, Abdallah Abdulkhalik.

In March 2009, SAX Limited had sought a loan from Gulf Bank to buy two aircrafts and related equipment. Mohamud Sheikh Hussein offered his property L.R No. Eastleigh 36/11/1 as the guarantor. By then, his property was worth Sh160M and has since gone up. For him it was just another of many bank engagements but unknown to him, it would end up in a decade long fight to regain full control of his suit property.

In April, 2009, Gulf Bank after reviewing the securities, agreed to advance a Murabaha Asset Finance Facility To SAC Ltd as the borrower Sh95M. This amount would be used in purchasing a used Aircraft Beechcraft Baron 95-E55,5Y-BPC at a cost of Sh11,200,000. A 5 tonne, Sideley HS478 Aircraft From Track Mark Ltd at Sh80M and Sh2.9M to purchase propellers.

The Sh160M property of Mohamud was to guarantee for Sh120M with SAC directors guaranteeing Sh94M but the registration was to remain jointly in the name of the bank and the company SAC. The terms for this MURABAHA facility was that profit and not interest would be charged at 16.5% of the facility.

That was a deal sealed and so Mohamud thought his work was finished. Things started making twists on 4th May barely weeks after SAC was advanced the principal amount of Sh95M. Gulf issued SAC with a second letter of offer varying the terms of the MURABAHA facility and this would translate into review of security terms for the mortgage. In a offer letter dated 4th May 2008, now the security property as the first ranking had a legal charge of  Sh95M, Mohamud switched to guarantee Sh95M.

In a letter of offer dated 4th November 2009 and seen by Kenya Insights, a second Murabaha stock finance was advanced to SAC the borrower for the sum of Sh15M. This amount was over and above the sums secured by the initial mortgage dated 9th September according to court papers.

Now here’s the point Fraud started playing, this second facility of Sh15M was given by the bank to SAC using Mohamud’s knowledge and consent as the guarantor and so the Murabaha facility wasn’t secured by the initial mortgage according to a court of appeal ruling on this case.

Gulf representatives liaised with SAC, reviewed the terms of mortgage while using the guarantor’s property, went ahead and issued another facility of Sh15M without his consent just to make the open breach clearer. The varied terms of repayment of the loan facility were of no effect and as a result, Mohamud was discharged from his obligation. Gulf unlawfully accommodated SAC the borrower and varied his terms of payment.

Related Content:  Abandoned In South Sudan, Kenyans Rotting In Prison, The Price Of Uhuru's Silence And Injustice

Having been fully discharged by the bank as a guarantor, there was no way in law the bank would reviver any amount on the second facility from Mohamud but from SAC the principal borrower. To affirm this in a demand letter dated 26th April 2010, in admission to this fact, wrote to SAC seeking the payment of the second facility. Mohamud wasn’t copied since he had been fully discharged by the bank as the guarantor on the principal amount.

In June 24th 2010 according to court documents, Gulf confirmed that SAC had fully settled the Murabaha loan facility which was done by the insurers on payment of the insurance of $370,000.

It didn’t end there, SAC(borrower) went ahead and sought a third facility(Tawarraq Working Capital Finance) Of Sh58,672,978 which was to be repayable in 24 months. Once again, Mohamud’s Eastleigh property without his knowledge and consent, was used to guarantee this third and illegal loan facility which wasn’t registered against his property according to court papers.

SAC the principal borrower defaulted in the payment of the third facility and Gulf sent him a demand letter dated 19th November 2010 seeking the settlement of arrears of Sh4,174,525.31. This letter wasn’t copied to Mohamud in tacit admission by the bank that Mohamud wasn’t liable as the guarantor.

Despite of all the accusations of playing dirty, the bank insisted that Mohamud was aware of the variations and approved them contradicting their body language. They never engaged him at any point after inking the initial mortgage facility.

In a sharp twist by a letter dated 26th January 2011, a firm Mohamed Muigai Advocates purported to issue a three months statutory notice on behalf of the bank seeking payment of Sh67,078,541.08. Here’s where the real games started playing.

SAC as the principal borrower informed Mohamed Muigai firm that the bank had waived the purported statutory notice by accepting payment and rescheduling proposal. By this, SAC admitted to liability as the principal borrower and the numerous proposals for settlement.

Despite all the breaches of all standard banking precepts, Gulf Bank purported to restructure the loan facility to make Mohamud who was the guarantor to make him the principal borrower. This, Mohamud says in court letters that it was illegal,l and vitiated by Fraud, duress and coercion so as to constitute an unconscionable bargain in law.

Related Content:  Fueling Atrocities: KCB Customers Put At Risk Over Bank’s Involvement In Money Laundering With South Sudan Warlords Now Facing Heavy Penalties

In play, the security documentation and letters were all drafted by the Gulf’s legal department and Mohamud wasn’t allowed the privilege of independent legal advice on the implications of signing the letter of offer dated 26th May 2011 in what he says the bank unlawfully coerced and duped him by purporting to restructure the loan facility and waive its exercise of statutory power of sale while in law, the bank didn’t have any statutory power of sale.

It doesn’t make sense that the bank purportedly made Mohamud the principal borrower yet there wasn’t consideration for the diminishing Musharaka sale and lease back Finance facility and not a single cent has been disbursed to Mohamud.

Worth noting that the bank had initially discharged Mohamud as the guarantor when it rescheduled the facilities in favore of SAC the principal borrower. For a fact, Gulf Bank has forwarded Mohamud a re-conveyance Of mortgage confirming that all the money secured under the mortgage of Sh95M the principal amount that is the only one he approved to had been fully paid.

Reconveyance of mortgage forwarded by the bank to Mohamud clearing him.

Amina Bashir, the Then Bank’ Company Secretary and Head of Legal Department is a key person of interest in this ploy. According to court documents seen by Kenya Insights, Amina drew agreements dated 26th May 2011 and purchase agreement dated 30th June 2011 in which she made Mohamud liable for payment of Sh68,455,295.08. In this reversal of roles, Amina purported to make Mohamud the principal borrower (SAC) now the guarantor to Mohamud when in fact no facility was advanced to him.

The Sh68.4M that now the bank was putting on Mohamud, Musharak Asset Purchase Agreement that Mohamud alleges he was duped and coarced into signing is described as a clear fraud on his side to enable the bank sale his property. Simple question that the bank need to answer is if Mohamud was a principal borrower as they purport then where’s the proof that he was paid? None as it never happened.

September 4th 2012, SAC the principal borrower in admission through a letter, confirmed it owed the bank the Sh68,455,295.08 that the bank purported to have been borrowed by Mohamud in their reversal roles theatrics. This debt according to court documents is fictitious and fraud that can’t be basis of any valid statutory notice.

Related Content:  Jet Fuel Sold As Kerosene; Details On How Oil Managing Companies Work With KPC Staff Including MD Sang To Steal Billions From The Company

In arguing their case to hold the statutory notice, Gulf Bank lies to the Court of Appeal by not disclosing that they had registered a re-conveyance of mortgage dated 8th August 2011 on 18th 2011 and there wasn’t mortgage in force.

The Chief Land Registrar confirmed that the last entry on the file was the re-conveyance of mortgage confirming that the property is fully and legally under Mohamud and held no debt, keep in mind the bank has cleared him of the loan.


With everything working against them and all factors exposing this clear fraud, Gulf Bank has served Mohamud with a notice of sale by public auction by Garam Investments on 17th Dec in respect of his Eastleigh property that he used to guarantee a loan and which the bank had cleared him of. The property would be auctioned on 19th February 2019 despite there being no mortgage registered against the property, non whatsoever

Following the sustained efforts to illegally acquire and sell his property, Mohamud has since published a Caveat Emptor Buyer Beware on local dailies warning the public against being duped into the purported public auctioning of his Eastleigh property.

PUBLIC NOTICE!

At Kenya Insights, we’re just opening a case which we believe if it’s the norm, then there could be many  frustrated customers like Mohamud. We’re asking members of public who might have fallen prey to such mannerisms of coercion and duping to write to us with solid proof on either Gulf Bank or any financial institution, we will highlight. Our email is below this post.

As for Gulf Bank, we’ve picked this case and will be going into much deeper details in subsequent series, how a bank turned against a guarantor is a reason to worry many other potential or existing guarantors to their facilities. What does the bank know that Mohamud or the courts doesn’t know? Why is the bank withholding Mohamud’s land documents despite having cleared him of any debt? Why did Amina Bashir change the loans agreements along the way without consent of the guarantor? What’s the level of BODs involvement in this scheme? Series continues…


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