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Nail Mumias, tax men in Sh577m fraud, DCI told

Mumias Sugar Company
Workers arrange bags of sugar at Mumias Sugar Company. FILE PHOTO | NMG 

A National Assembly committee wants Mumias Sugar Company #ticker:MSC and the Kenya Revenue Authority (KRA) held responsible for abetting loss of tax.

The National Assembly’s Agriculture, Livestock and Cooperatives Committee in March 2015 recommended the KRA officials be held responsible for the loss of Value Added Tax amounting to Sh577 million for fictitious exports.

The loss was occasioned in a scheme where Mumias officials are said to have colluded with KRA to facilitate the entry of fictitious sugar exports amounting to Sh3 billion.

Now in a new status report dated June 2019 approved for tabling before the National Assembly, the committee on implementation wants the matter concluded speedily by Director of Criminal Investigations and the Ethics and Anti-Corruption Commission to enable the recovery of the lost public funds.

The committee raises the red flag over the slow implementation of the probe.

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“The Directorate of Criminal Investigations (DCI) in their letter Ref no CID/SEC/OPS/2/6/13/8/196 dated 28 November 2018 reported that substantial ground had been covered in terms of trailing of cash in different bank accounts within and outside the country,” says the status report.

The committee notes that the DCI has cited several hitches in its probe that delayed the process.

“During investigations it came to light that some substantial amount of money was transferred to foreign accounts that are not in their jurisdiction and they therefore require Interpol’s assistance to acquire information,” says the Committee. “This is because the origin of the sugar was from outside Kenya which requires Interpol protocol to accomplish the investigations.”

This, DCI said, has occasioned the delay in completing investigations.

“The DCI in their letter requested for one month to complete the investigations and forward a letter to the Committee. However, at the time of compiling the report the status of the matter had not been communicated,” notes the committee.

“EACC in a letter dated Ref. No. EACC.6/4/1 Vol IV (21) dated 29 November 2018 reported that investigations commenced, documents were collected, analysed and statements recorded,” notes the Committee.

Mumias Sugar avoided paying taxes by claiming that it had exported the sugar, the Committee noted.

“Appropriate action should be taken against those found culpable. The proceedings should be undertaken with a view to recovering lost public funds.”

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