More banks sucked into probe on imports duty evasion scam
Times Towers, Kenya Revenue Authority headquarters. PHOTO | FILE
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KRA said apart from Equity Bank, National Bank of Kenya, Commercial Bank of Africa and Cooperative Bank of Kenya were also under investigation over suspected manipulation of customs entries by their employees.
More commercial banks have been roped into an ongoing investigation into a scam where traders forged payment slips to evade duty on imported goods.
The Kenya Revenue Authority (KRA) said apart from Equity Bank, National Bank of Kenya, Commercial Bank of Africa and Cooperative Bank of Kenya were also under investigation over suspected manipulation of customs entries by their employees.
“Plans are also underway to expand the investigation scope to cover several other banks,” said spokesperson Grace Wandera.
A joint inquiry between Equity and KRA unearthed a syndicate in which traders at the Namanga border post were aided to import goods without paying duty, denying the taxman more than Sh120 million in revenue.
Investigations revealed that a total of 2,926 transactions worth Sh123.58 million and involving 916 taxpayers were initiated in the online clearance portal, Simba 2005, without corresponding dealings in the bank’s system to confirm actual payment.
Mr Douglas Wachira Gikunju, a cash officer at the Equity Bank, Namanga branch appeared before a Nairobi court over the matter but denied the charges and was released on a Sh1 million cash bond.
Milimani chief magistrate Charles Ogembo issued a warrant of arrest for the Equity Bank Namanga branch operations manager Benson Rwara Kabuu, after he failed to appear in court to answer to charges of conspiring to evade payment of duty and interfering with information stored in customs computerised systems.
The audit showed that the traders used fake bank slips to guarantee passage of their cargo even though no money was deposited into the Equity Bank account.
The fraud was unearthed on December 2 after KRA wrote to Equity Bank questioning why some four transactions had been registered in the Simba system but without corresponding actual payments.
The KRA further raised concern about general cases of irregular transactions in its different accounts held at Equity. The taxman singled out a registrar of motor vehicles account and income tax collection account.
Ms Wandera said investigations are underway into the role KRA staff may have played in the fraud with a view of having those found culpable charged in court.
Recently, a National Bank of Kenya staff, Kennedy Otieno Juma, was charged in court for allegedly tampering with data on KRA’s Customs system. The matter will come for hearing on April 7 at the Milimani Law Courts.
In another incident, two employees of Cooperative Bank of Kenya, Leviscus G. Njeru and Ian Martin Ochieng were charged alongside three employees of clearing and forwarding firms for facilitating fraudulent transactions.
The bank officials were charged with tax evasion related charges and conspiracy to defraud KRA by interfering with information stored in the Simba Systems Customs. The matter is scheduled for hearing on May 3 at the Mombasa Law courts.
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