Port Tycoon Samuel Kairu Dragged Into Sh500 Million Mombasa Port Tax Scam

Businessman Samuel Kairu Njonde, the man behind Compact Freight Systems, has emerged as one of the prominent names linked to an explosive investigation into an alleged Sh500 million customs fraud scheme at the Port of Mombasa, a scandal that investigators say exposed deep vulnerabilities within Kenya’s most important maritime gateway.

The investigation, being conducted jointly by the Directorate of Criminal Investigations (DCI) and the Kenya Revenue Authority (KRA), has already led to the arrest of eight government officials and is now widening its net to include freight forwarding companies and businessmen suspected of facilitating the movement of cargo through the port without payment of mandatory customs taxes.

According to investigators, the alleged scheme relied on the recycling of legitimate customs entry numbers that had already been used and approved. Rather than creating fake documentation, suspects allegedly attached previously processed clearance records to new consignments, allowing containers to exit the port while appearing to have complied with all customs requirements.

Authorities believe at least 238 containers left the Port of Mombasa irregularly between 2025 and early 2026, with fears that the final figure could surpass 300 containers. The suspected tax losses are estimated to exceed Sh500 million.

Investigators say the operation involved a sophisticated network spanning both public and private sectors. Five KRA officers and three Kenya Ports Authority employees have already been identified as key suspects. Authorities allege that retired KPA employees’ login credentials were unlawfully used to access port systems and process container clearances under dormant digital identities.

While no criminal charges against Kairu have been publicly announced, investigators are examining the role of firms linked to freight forwarding activities connected to the irregular container releases. His company, Compact Freight Systems, has been repeatedly mentioned in reports surrounding the ongoing probe.

The latest allegations add to a long trail of legal and commercial disputes that have followed the businessman over the years.

Court records show that Compact Freight Systems has repeatedly found itself embroiled in litigation involving cargo handling, contractual disputes and claims of cargo losses. One of the most notable cases involved allegations surrounding the loss of 153 bales of imported garments valued at more than USD 214,000 at the company’s Miritini-based container freight station. Courts handled multiple proceedings between 2022 and 2024 concerning liability for damaged or missing cargo.

Kairu’s company has also battled creditors in court. In the long-running case involving Aswan Developers and Contractors Limited, judgment was entered against Compact Freight Systems for approximately Sh6.8 million. Attempts to stop execution of the decree were unsuccessful, leading auctioneers to target company assets, including a Reachstacker container-loading machine considered critical to the firm’s operations.

The businessman has additionally been linked to a high-profile dispute involving cargo transportation arrangements for South Sudan. The disagreement pitted interests associated with Compact Freight Systems against entities linked to the family of former Mombasa Governor and Cabinet Secretary Hassan Joho.

The dispute escalated into diplomatic and legal corridors after the South Sudan government moved to terminate cargo allocation arrangements. Justice Martha Mutuku subsequently directed the Kenyan government to comply with requests arising from the cancellation of the transport agreement involving Compact Freight Systems and Autoport Freight Terminal.

The latest investigation has once again placed the spotlight on corruption and tax leakages at the Port of Mombasa, a strategic facility that serves not only Kenya but also Uganda, Rwanda, South Sudan and the Democratic Republic of Congo.

Over the years, the port has witnessed numerous fraud scandals involving container diversion, tax evasion, cargo theft, under-declaration of imports and manipulation of customs systems. Anti-corruption agencies have repeatedly warned that criminal cartels often rely on insider access within government agencies to bypass controls and facilitate illegal cargo movements.

Several previous investigations at the port uncovered networks involving customs officers, clearing agents, transporters and private businessmen working together to manipulate cargo declarations, alter documentation and evade taxes worth hundreds of millions of shillings.

The current probe appears to fit that pattern.

Investigators say the alleged fraud did not depend on crude document forgery. Instead, it exploited weaknesses within existing electronic systems and internal controls, making detection more difficult and potentially allowing the operation to continue for months before authorities uncovered the scheme.

As investigators continue tracing the movement of hundreds of containers and following money trails linked to freight firms operating within and around the port, pressure is mounting on authorities to determine whether the scandal was the work of a few rogue officials or evidence of a far larger cartel embedded within Kenya’s maritime logistics sector.

For Samuel Kairu Njonde, a businessman whose name has repeatedly surfaced in court battles and transport-sector disputes over the past decade, the investigation represents the most serious scrutiny yet of a business empire that has long operated at the centre of East Africa’s lucrative cargo movement industry.

Whether investigators ultimately establish direct criminal culpability or merely business association remains a matter for the ongoing inquiry. What is already clear, however, is that the unfolding scandal has once again exposed the immense financial risks posed by corruption and systemic weaknesses at one of Africa’s busiest ports.