The High Court has granted the anti-graft body, the Ethics and Anti-Corruption Commission (Eacc) green to investigate the multibillion- shilling Tatu City real estate project in Kiambu over claims of tax evasion and money laundering.
Justice Esther Maina granted the go-ahead saying the anti-graft agency has the powers to investigate the offences.
“It is my finding that in this case the matters being investigated transcend the dispute between the individual shareholders and the petitioners as they revolve around the commission of the offences of tax evasion and money laundering,” the judge said.
According to EACC, Tatu City is said to have been practicing tax evasion and money laundering which are effected through paper transactions involving a chain of interlocking companies, nominee shareholders and purported loans and financing structures.
A sister company- Kofinaf- incorporates special purpose vehicles such as Purple Saturn Properties, with shareholding and directorships held by its nominees specifically to hold parcels of land.
It then enters into sell agreement with SPVs and purports to advance them loans- in effect Kofinaf finances its SPVs to finance its own properties.
Tatu City and Kofinaf Company filed the suit in 2019, seeking to quash letters sent to the Lands PS seeking the State to place caveat or purchase warning on 36 pieces of land.
EACC also sought from the government documents including survey plans, maps, valuation reports and official searches.
The anti-graft agency intends to scrutinise all documents related to registration and ownership of the plots after the High Court allowed it to unmask closely guarded secrets of controversial dealings by the officials of multi-billion real estate firm, Tatu City.
EACC wants the Director of Survey to provide it with original Registry Index Maps, survey plans, maps, computation files and deed plans for the affected parcels of land.
They are LR.Nos.11287, 11294, 11288, 10083, 10083/2, 10877, 11285, 11289, 11294, 11428, 11486, 117; and 247/1, 248/5, 111/1, 110/2, 113/1, 113/2, 7192, 7386, 8182, 28867, 91, 11538/2, 11536/8(104), 6906, 7787, 295/15, 5815, 248/1, 1337, 1842, 8810 and 8321.
A Nairobi Anti-Corruption Court dismissed a petition by the developers challenging the investigative mandate and powers of EACC to obtain information relating to their operations effectively granting unfettered probe into the controversial venture bearing all the hallmarks of an international economic hit-men racket.
Justice Maina ruled that the anti-graft body has powers to investigate matters intertwined with corruption, including tax evasion and money laundering.
EACC accuses the directors, who include Stephen Jennings, the chief executive officer and founder of Rendeavour, the majority shareholder of Tatu City and Chris Barron, the country head, who has previously held the positions of chief operations officer, head of sales and operations manager, of transacting multi-billion relating to the sale of thousands of acres of land by Tatu City in Ruiru, Kiambu county without payment of taxes to the Kenya Revenue Authority (KRA).
Investigations by The Informer established that according to the account statement dated January 1, 2010 to March 20, 2013, Stephen Jennings through Renaissance Partners Investment Limited as a facility agent is said to have borrowed a tranche D loan of a total of USD5,800,000 on behave of Tatu City without the knowledge of Local partners and submitted USD5,500,000 of the money to a hidden foreign account in Cyprus.
Further, in a separate suit where allegations of money laundering have flown, former Governor William Kabogo is in court in a matter where Jennings, the majority shareholder in the Tatu City projects has accused him on blackmailing them to surrender to him a five percent stake in a section of the multibillion-shilling project in May 2016 during his turner as the county chief.
While Kabogo claims to have acquired the land and paid Sh348 million to Rendeavour Services, a Tatu City shareholder at partial payment for the 100 acres, Jennings has challenged him to provide any agreement or evidence of payment, saying if at all he paid, the money, “is proceeds of crime and money laundering as it must have been acquired as a result of corrupt dealings during his tenure as governor of Kiambu County”.
The probe by EACC had gathered steam, with EACC, writing three letters on September 30, 2018, September 24, 2018 and November 2, 2018 to the ministry of lands requesting it be furnished with crucial information and documents regarding their transactions.
The letters, which were never executed due to the court orders, touch on various land parcels which form Tatu City but the offices, however, argued that the implementation of the request would have a ramification on the ownership, transactions and use of the said land parcels.
In its letter of September 30, 2018, EACC requested the Principal Secretary, Ministry of Lands to place government caveats on 33 parcels of land and on September 24, 2018, EACC requested for original documents, relating to 28 parcels of land or reasons that it was carrying out investigation of allegations of tax-evasion and money laundering.