French tycoon faces tax fraud charges linked to Kenya’s Ol Jogi ranch resortTuesday January 05 2016
A lavish holiday ranch located in Kenya’s Laikipia plains is at the heart of a multi-million euro tax evasion battle whose hearing began on Monday in a Paris court.
French authorities accuse owners of Ol Jogi Ranch – the setting for award-winning film Out of Africa – of hatching a tax fraud scheme that has cost the European nation millions of euros in uncollected taxes.
French prosecutors say the wealthy art-collecting Wildenstein family, which also owns the holiday ranch, has been running the fraudulent scheme for years and are seeking to recover millions of euros through the suit.
Guy Wildenstein, who inherited his father’s vast estate and a close associate of former French president Nicholas Sarkozy, was on Monday arraigned on multiple charges of tax fraud and money laundering that carry a 10-year jail term if found guilty.
French authorities are demanding €550 million (Sh60.9 billion) in unpaid taxes from Mr Wildenstein, who is accused of hiding the Ol Jogi Ranch, rare art collections, prime properties, and pedigree racehorses from the taxman and laundering huge sums of cash.
“It also included a vast real estate portfolio, with the jewel in the crown a luxury Kenyan ranch,” reported French news agency AFP. “Such assets were in the main registered in tax havens in a series of trusts,” the AFP said.
Daniel Wildenstein (deceased), a world renowned art collector, acquired the wildlife sanctuary which sits on the Laikipia plateau in 1977.
Court documents filed in Paris say Guy had in 2012 declared the family’s vast estate to be worth €40.9 million (Sh4.5 billion) but French authorities estimate that the estate could be worth as much as €4 billion (Sh443 billion).
The Wildenstein family is further accused of hiding its assets, including Ol Jogi Ranch, in shell companies and trusts registered in tax havens such as Switzerland, Bahamas and Cayman Islands.
One of the trusts named ‘Delta’ is said to hold rare paintings worth an estimated $1 billion, according to the Internal Revenue Service, the US tax agency.
The French tax evasion case involving Ol Jogi Ranch once again shines the spotlight on Kenya’s real estate industry, which experts have argued is largely fuelled by illicit cash, money laundering, proceeds of corruption and international crime such as piracy.
Saudi-born arms dealer Adnan Khashoggi in 1978 bought the lush Ol Pejeta Ranch, a 90,000-acre wildlife conservancy in the same location.
Property prices in Kenya hit the roof at the height of Somali piracy along the Indian Ocean coast and most of the ransom cash is suspected to have been invested in Nairobi’s booming real estate market.
Kenyan businessmen were among a list of persons holding secret bank accounts in Switzerland and suspected of crimes such as drug-running, corruption and money laundering, according to leaked files belonging to high-street lender HSBC made public in February 2015.
Machakos Senator Johnstone Muthama and Deepak Kamani, a key suspect in the Anglo Leasing scandal, were named among the 238 Kenyans holding Sh51.1 billion in HSBC’s Swiss accounts.
READ: Kenyans on list of those with cash in Swiss banks
Ol Jogi Ranch - straddling 58,000 acres of pristine Kenyan plain lands teeming with wildlife – comprises seven villages each consisting multiple Maasai thatched cottages that can accommodate up to 14 guests.
“We here at Ol Jogi do not offer one night’s stay or per room / per bed stay,” the ranch said in response to a query from the Business Daily. It costs $210,000 (Sh21 million) per week to take up an entire village (maximum of 14 guests) to holiday at the exquisite Ol Jogi Ranch, and the cost includes outdoor activities, meals, drinks, massage and spa.
A 45-minute private flight from Nairobi’s Wilson Airport connects high-end holidaymakers to Ol Jogi, saving guests the hustle of a bumpy road travel.
The tax evasion schemes were first revealed in a bruising inheritance battle following the death in 2001 of Daniel Wildenstein, the family patriarch.
His two sons – Guy and Alec – took over the family business, with the latter inheriting the horse breeding business.
It was Alec’s 1998 messy divorce from his wife -- the Swiss socialite Jocelyne Perisse renowned for undertaking multiple plastic surgery procedures – which first lifted the lid on the Wildensteins’ business dealings.
Alec died in 2008 and Guy took charge of the entire family wealth.
However, the second wives and widows of Daniel and Alec rose up against the family over their slice of the inheritance, accusing Guy of hiding much of the fortune using a complex web of opaque trusts in tax havens.
Sylvia, second wife to Daniel, moved to court in 2005 claiming that she was entitled to half of her husband’s fortune, and was awarded €20 million (Sh2.2 billion).