Foreign investors of the Tatu City have defrauded the taxman over Sh6.5 billion in unpaid taxes, former chairman of the company Nahashon Nyaga (pictured) claimed before a parliamentary committee yesterday.
Another minority shareholder, Stephen Mwagiru, produced documents that alleged majority shareholders were involved in tax evasion scheme amounting to Sh1.5 billion.
Nyaga now wants the Director of Criminal Investigations (DCI) to investigate the firm’s majority shareholders, Stephen Jennings, and directors of Kofinaf Company Ltd, over the unaccounted $13 million (Sh1.3 billion ) in respect to an excess amount paid to service a loan allegedly procured by Jennings.
In the second plea to the DCI, Nyaga wants Tatu City Ltd investigated on the whereabouts of $51 million (Sh5 billion).
Nyaga wants foreign directors stopped from selling off company land until after a thorough probe on tax evasion is heard and determined.
Asked what steps he had taken to address the matter, Nyaga who is a former Governor of Central Bank of Kenya, said he had filed a suit in the High Court against Jennings which he and other minority shareholders have pleaded that the foreign directors had breached their fiduciary duty as directors by misrepresenting status of loan accounts, thus acting fraudulently against Kenyan directors.
“On February 10th, 2017, we filed two complaints with the DCI about the extensive theft of company funds by Jennings and his group,” Nyaga told the lands committee.
Nyaga said if a forensic audit is conducted as ordered by the High Court, it will be the most efficacious solution as it will likely reveal tax leakages and financial mischief visited on the local shareholders by their foreign colleagues. The foreign directors have also been accused of failing to reveal to the taxman the real value of land sold to a university, documents provided to Parliament by a former director of the firm reveal.
The land was sold to Jomo Kenyatta University of Agriculture and Technology for Sh842.4 million but Tatu City’s foreign directors declared Sh235 million as its value, Mwagiru said.
He also said Tatu City and Kofinaf had been committing stamp duty fraud using a scheme that saw them form special purpose vehicles to which they transferred the land at highly discounted value without paying stamp duty.