Tycoon’s cash network sparks war with police

Banking fraud investigators have uncovered a network of individuals based in the US, Nigeria and South Africa believed to be helping Nairobi tycoon Samuel James Kinyanjui move large sums of money around the world as part of a money laundering scheme.

Mr Kinyanjui has been transmitting large sums of money to Standard Charted Bank accounts in New York, Lagos and South Africa, which investigators believe are proceeds of crime.

The Banking Fraud Investigation Department (BFID) says in court filings that Mr Kinyanjui has mostly been sending large sums of money to an individual identified as Nathan Yobana -- a West African whose nationality is not known.

The BFID made the revelations in response to Mr Kinyanjui’s application seeking to have his Diamond Trust Bank (DTB) account, which was blocked as part of the investigations, opened. 

“The BFID was seized of this matter through an anonymous letter which explicitly detailed fears of money laundering by Mr Kinyanjui. The letter detailed dealings between Mr Kinyanjui and parties in Nigeria and South Africa to whom he was transmitting huge sums of money from his local account to Standard Chartered Bank Lagos and New York and mostly to one Nathan Yobana,” the BFID says.

The businessman claims that he entered the business scene with a multi-billion shilling deal that saw him supply oil mining equipment to the Nigerian government.

Mr Kinyanjui bagged the deal with the Nigeria National Petroleum Corporation in 1991, according to documents attached in the case file, but received payment in instalments over several years.

While he does not verify the total value of the deal, Mr Kinyanjui says he received $20 million (Sh2 billion) from the Nigerian government in 1999 as the final payment.

The tycoon claims that the BFID’s investigation has been fuelled by malice as he was not given an opportunity to oppose the decision to restrict his bank transactions.

He adds that he has other legitimate business interests in South Africa, Tanzania, Uganda and the Democratic Republic of Congo.

BFID detectives, however, reckon that an analysis of information collected so far does not show any legitimate business transactions between Mr Kinyanjui and Mr Yobana to validate the large sums of money sent to the West African national.

READ: Tycoon fights freeze of accounts in money laundering probe

Mr Kinyanjui transferred over Sh150 million to Mr Yobana between April and September 2015, but sent the funds in small instalments, which the investigators believe was meant to avoid raising suspicion.

“Nothing suggests any lawful business transaction between Mr Kinyanjui and the said remittance destinations warranting such colossal transmission in frequent intervals with a majority of them structured below legal threshold ostensibly to defeat easy detection and statutory mandatory reporting to both the Central Bank of Kenya and the Financial Reporting Centre,” the BFID adds.

Mr Kinyanjui does not disclose how much money is in the DTB accounts, but says he has a massive business empire built over 50 years including the Sh2 billion Edenville Estate in Kiambu and flower firm Torito Roses.

Phase One of Mr Kinyanjui’s Edenville Estate consists of 345 housing units, most of them villas priced at between Sh14.5 million and Sh18.5 million each. A Hass Consult report indicates they were sold out in a record 10 months.

Phase Two of the project comprises 454 maisonette units and was constructed at a total cost of about Sh2 billion. Plans have been in place to build a third phase of housing units on a 36.5-acre piece land.

Mr Kinyanjui is also accused of stalling investigations and refusing to appear before the BFID for interrogation.

Detectives say the businessman has twice appeared with his lawyer, but declined to be interrogated. He instead demanded the list of accusations against him and insisted that he would respond in writing.

While filing the suit, Mr Kinyanjui had stated that he is a co-owner of Geminia Insurance Company but last week asked the court to delete any mention of the firm in his petition.

He argued that he is no longer a shareholder or director at the insurance company.

Geminia Insurance, which was seeking to join the suit, agreed to drop its bid on condition that the businessman ceases mentioning it in the suit.

Geminia had sought to join the suit to distance itself from Mr Kinyanjui following queries from the Insurance Regulatory Authority (IRA) and brokers regarding their connection with the businessman.

“Mr Kinyanjui hereby for the record clarifies that he is currently neither a shareholder nor a director of Geminia Insurance Company. Any reference to Geminia should therefore be expunged from the court record. In view of the above orders, Geminia ceases to participate in these proceedings,” the consent between Mr Kinyanjui and the insurance company reads.

BFID lawyer Fredrick Ashimosi told Justice Isaac Lenaola that investigations had been slowed down by attempts to make co-operation with foreign investigators official.

He said plans were under way to compel Mr Kinyanjui to appear before the BFID for interrogation.

“In the intervening period, other aspects of investigation have been ongoing such as engaging in international police co-operation aspect through Interpol, engaging in other police-to-police contacts and other key anti-money laundering stakeholders,” Mr Ashimosi said.

Justice Lenaola has ordered the BFID, the Attorney-General and the Director of Public Prosecutions, who are all listed as defendants, to file their written arguments and appear before him on February 2 for a hearing.

Mr Kinyanjui reckons that he has been unable to meet the financial obligations of his other business interests in the manufacturing, pharmaceuticals, transport and air freight industries and that he could face lawsuits from suppliers and creditors.

He wants the High Court to rule that he is entitled to damages for harassment by investigators, but has left it to Justice Lenaola to determine how much he should be awarded.