CID director to submit report on gold export firms
Members of the National Assembly’s Energy and Natural Resources Committee chaired by nominated MP Amina Abdalla at a meeting in Nairobi on Monday. Photo/Stephen Mudiari
A parliamentary committee is set to hear updates of an ongoing investigation into money laundering allegations against two gold exporting firms.
The Criminal Investigations Department (CID) director Ndegwa Muhoro is on Thursday scheduled to appear before the Environment and Natural Resources Committee, which is holding an inquiry on gold sales by Skyhawk International and Ushindi Exports.
In a letter to the committee chaired by Amina Abdalla, the Treasury said it had asked the CID to investigate the two companies to establish the source of their reported monthly proceeds of Sh87 million ($1 million) from gold exports.
“We want to know if there is an element of money laundering in this whole gold business. We have received allegations from a civil society group claiming that MPs were planning to cover up the matter,” said committee member Opiyo Wandai, also MP for Awendo.
The committee launched investigations into the issue after Fafi MP Barre Shill sought a ministerial statement two months ago regarding the proceeds of gold exports by two companies.
The Treasury had indicated in the letter to the committee that the law does not require gold exporters to pay export tax because they pay corporation tax.
Mining ministry officials had also appeared before it to defend the gold exports.
Ms Abdalla, however, said their explanations had raised suspicion with regard to the amount of gold exported from Kenya.
“The ministry says all this gold is produce at the artisanal mines here in Kenya. But the amounts that are coming in, that is between $400 million to $1 million is suspicious and raises alot of question. The gold produced locally can’t be of that amount,” she said in Monday’s meeting.
Mr Shill has since indicated to the committee that he was no longer interested in pursuing the matter. However the committee says it will get to the bottom of the issue because the transaction was fishy.
“This matter has the potential of tarnishing the reputation of this committee and that of Finance Trade and Planning which was mandated by the speaker to investigate Mr Shill’s claims. We will summon the concerned civil society group which claims it had written to Parliament and the directors of the two export firms to shed more light,” said Opiyo Wandai, the MP for Awendo.
Mr Shill had sought a statement claiming that the two private companies are exporting 1,200 kilograms of gold a month when the national production is less than 50 Kg annually.
He said Skyhawk and Ushindi were purporting to export gold to the United Arab Emirates and alleged that up to $40 million transits the Jomo Kenyatta International Airport (JKIA) without any serious scrutiny.
The MP argued that the proceeds from the mines in Kenya-Karebe Gold Mining Limited in Nyatike and Kilimapesa Gold Limited in Lolgorien- only produce 50 kgs annually.
He demanded to know the amount of duty and tax that the two companies pay Kenya Revenue Authority had collected from 2005 to date, the documentary proof that the companies were actually selling gold to UAE and the reasons why proceeds are brought in cash.
The committee on Monday revealed that the mining ministry had indicated that the gold traders were bringing in the money in cash because they wanted to avoid commissions charged in forex exchange.
“They have claimed that the companies wanted to avoid the issue commissions charged. But it will be in their interest to have the money wired directly to their accounts rather than ferry cash,” said Abdalla.
The committee is also planning to tour gold mines in Kenya, Tanzania, Australia and China as part of preparations to deliberate on the mining Bill currently at the Attorney General’s office.
