KRA demands Sh3billion from Kiwipay, a firm implicated in card scam syndicate saga

The Kenya Revenue Authority (KRA) is demanding Sh3billion from Kiwipay Kenya Limited, a payment solution firm whose funds were frozen last year over claims of card fraud syndicate and money laundering claims.

The company says in documents filed in court that the taxman is demanding the principal amount plus penalties adding that Kiwipay Kenya Ltd was sinking into debt yet it cannot access its funds, which remained frozen by court orders obtained by various parties.

In a new suit, a foreign investor who claims to be the main shareholder and Director of Kiwipay Kenya Ltd, claims the company continues to go deeper into debt as several suits regarding the firm await determination.

The $19.4 million (about Sh2.6billion) was frozen last year over suspicion that the firm was involved in an international card fraud syndicate, the Assets Recovery Agency (ARA) then withdrew the case against the firm but several parties obtained court orders for the money to remain frozen.

Monthida Rashi from Laos, a South east Asian country, is fighting to control the cash and company against three Kenyans who also lay claim to the said billions held at Eco Bank.

Rashi claims that the three Kenyans; Maina Njenga, Felix Rekishe and Solomon Maina resigned and therefore, could not purport to act for the company.

An order freezing the money was lifted last September after the Assets Recovery Agency (ARA) withdrew the application seeking to forfeit the money to the government.

Court last month ordered the company to pay Rene & Hans Advocates LLP Sh337 million for acting on behalf of the three Kenyans, who had challenged their alleged removal as the firm’s shareholders and directors.

“That Ecobank has whilst the orders are subsisting paid money to other parties and consequently some of the liabilities that have accrued as debts to the applicant, including statutory outgoings and taxes which have fallen due and attract penalties.” Kiwipay Kenya Ltd firm said in documents filed in court.

Rashi, a shareholder and director of the firm claims that Kiwipay Kenya Ltd cannot meet its financial obligations because of freezing orders.

“That as the suit herein continues to await determination, the company continues to go deeper into debt.” Rashi said in a sworn statement.

The firm says it offers digital payment services such as QR Code solutions for retail shops, hotels and restaurants by enabling foreign e-wallet solutions.

Several people including Rashi, three Kenyans and Gregory Schmidt from Singapore have been fighting for the control of $19.4 million since the assets recovery agency withdrew a petition for the funds to be forfeited to the government.

Rashi says Kiwipay PTE Ltd, which belongs to Schmidt and claims to own majority shares in the Kenyan subsidiary, is a foreign firm that cannot offer the operations of the local firm.

Rashi accused several law firms of exaggerated and fabricated claims on legal fees and other consultancy fees amounting Sh500 million

Rashi, through lawyer Wilfred Mati, claims she has been frustrated by various court orders as an investor and several law firms have obtained the orders for exorbitant payments.

She wants the court to direct Ecobank to release the money and more than Sh500million paid to several law firms, using court orders, refunded.

“That it is important that all these matters are consolidated and heard by the same court as all transactions sanctioned by lawyers are suspended so as to protect the applicant (Kiwipay Kenya) and its directors from being defrauded.” Rashi said.

In March this year, Rene & Hans Advocates received Sh340 million from Kiwipay’s accounts at Ecobank. The money was paid into the law firm’s I&M Bank account.

Rene & Hans Advocates in its declaration papers with I&M provided a court order allowing it to receive $2.5 million.

Despite the court order stating the figure in dollars, the funds were paid into Rene & Hans Advocates’ shilling account.

On the same day that the money hit Rene & Hans Advocates LLP’s accounts, one of its officials made 13 transfers to individuals and law firms.

Former Kiambu governor William Kabogo received Sh130million, while his real estate company Arcoverde (K) Ltd received Sh50million.

Other people who received money were Rene & Hans Advocates official Isaac Rene (Sh33 million), Kenneth Odhiambo Ojwang (Sh25million), Sharon Mirella Wakho (Sh10million), Joel Gichiu Ngari (Sh5million) and Simon Munene Mwendia (Sh5million).

Firms that received funds were Ivio Advocates LLP (Sh20 million), J. W. Weke & Company Advocates (Sh10 million), Squire Afrilaw Consult Ltd (Sh7million) and MMA Advocates LLP (Sh5 million).

Three days after the transactions, a Kiwipay director, not named in court papers, visited I&M Bank in the company of former Nairobi governor Mike Sonko in protest.

Sonko demanded that the bank release to him and the Kiwipay director information regarding the money trail.

“Company stalled its operation in November, 2022 as its funds in the account were frozen and debts including taxes have accumulated and their debts now stand at Sh67 million,” she said in court documents.

It is her case that the said lawyers represent the interests of parties other than Kiwipay Kenya Limited where she is a director and shareholder.

She wants the court to order the law firms to refund the Sh500 million paid to them and the consent orders reinstating the three Kenyans as directors be suspended pending hearing of the suit.

She also wants the 10 suits filed relating to the company be consolidated and heard by one judge.

Justice Josephine Mongare of the Commercial Division directed the files be placed before Justice Alfred Mabeya for directions