Search for billionaire Kariuki over Sh41bn tax evasion scheme

Police were until Thursday evening hunting for reclusive billionaire Humphrey Kariuki after the Director of Public Prosecutions Noordin Haji ordered his arrest over Sh41 billion tax evasion scheme.

The DPP said there was adequate evidence to charge the businessman and other suspects for being in possession of unaccustomed goods, counterfeit excise stamps, tax evasion and fraud, all amounting to over Sh41 billion at his alcohol plant in Thika.

Police were yet to arrest him by the time of going to press at 8pm in a hunt that followed a February raid at the tycoon’s Africa Spirits Limited led by Inspector-General of Police Joseph Boinnet and senior Kenya Revenue Authority officials.

An estimated 21 million counterfeit excise stamps and 312,000 litres of illicit products — all worth billions of shillings in taxes—were discovered at the Thika plant. The DPP further ordered the DCI to investigate the tycoon for money laundering, a blot to Mr Kariuki, 61, who has built a multibillion empire including the five-star luxurious Mt Kenya Safari Club.

“I am satisfied there is sufficient evidence to charge the suspects for the offences of being in possession of unaccustomed goods, counterfeit excise stamps and aiding in the commission of tax. Consequently, I have today directed the DCI to cause the arrest and immediate arraignment of the suspects in court,” said Mr Haji in his statement.

His co-accused persons are Wow Beverages directors, Stuart Gerald Herd and Robert Thinji Muriithi, and Africa Spirits Directors Peter Njenga Kuria and Geoffrey Kaaria Kinoti Mbombua.

The items were confiscated at the factory earlier this year following a raid that was conducted by a multiagency team.

Sethu Prabhu, an assistant production manager at Africa spirits, Eric Mulwa, a driver, Simon, a shift manager at the company and Kepha Githu Gakure a tax manager will also face charges for aiding in commission of tax offences.

The order of the tycoon’s arrest followed a raid conducted at the factory earlier this year through which 880 reels of counterfeit exercise stamps each containing 24,000 pieces and over a million assorted alcoholic drinks affixed with counterfeit stamps were nabbed.

80 drums of suspected unaccustomed ethanol were also found at the factory.

Some of the firm's popular brands are Blue Moon Vodka, Glenrock whiskey, Furaha Gin and Legend Brandy.

Mr Haji noted that some of the parties were unsuccessfully offered an opportunity to settle the matter with KRA.

The raid exposed one of the country’s largest tax evasion scams that saw DCI George Kinoti and the then police Inspector General Joseph Boinnet visit the factory and order its closure pending the conclusion of investigations.

The factory that was then cordoned off as a crime scene has been shut to date. It is not clear how much the billionaire has lost from the months he has been out of business.

Mr Kariuki has however been questioned alongside some of his senior employees by detectives at the DCI headquarters. Part of the probe centered on his then undeclared dual citizenship which made him move to court to challenge the law that specifies a punishment for failure to disclose dual citizenship.

In his submissions, the tycoon claimed that he was not aware that he ought to have disclosed his other citizenship earlier, he further termed the law discriminatory as it does not target foreigners living in the country.