Two arrested for allegedly defrauding TSS companies
Mombasa DCIO Jacob Kanake shows journalists some of the documents seized from the offices of the two directors of companies linked to a Sh10 billion fraud at the TSS business empire. Two suspects were arrested on February 8, 2017. PHOTO | LABAN WALLOGA | NATION MEDIA GROUP
What you need to know:
TSS Grain, Juja Coffee Exporters, TSS Investment, TSS Salt Manufactures and Mvita Bottlers affected by the fraud.
Mombasa DCI boss says the fraud started when the owner started getting ill two years ago.
Auctioneers had put up for sale a 6,178-acre property fronting the Indian Ocean in Lamu County,
Detectives in Mombasa are holding two suspects for allegedly defrauding the Twahir Sheikh Said (TSS) companies of Sh10 billion.
The two, who are directors of KAAB Investments, were arrested by CID officers at their offices on Wednesday and taken for interrogation at Urban Police headquarters.
Mombasa Urban Directorate of Criminal Investigations (DCI) boss Jacob Kanake said the two allegedly colluded to get bank loans using TSS companies using the companies’ documents in their possession.
“The directors of TSS group of companies decided to defraud the owner by taking loans and using the company as collateral without service endorsement and today our officers raided their (suspects’) offices and collected some of the documents belonging to TSS [from] their offices,” said Mr Kanake.
He said among the companies KAAB Investment had allegedly defrauded are TSS Grain, Juja Coffee Exporters, TSS Investment, TSS Salt Manufactures and Mvita Bottlers.
Mr Kanake said the suspects defrauded the TSS empire for the benefit of their company.
Bank fraud unit
“They defrauded one company of Sh1.5 billion. This is a case in which the family is the complainant. We are at the initial stage and we have called the bank fraud officers to assist us with investigations,” said Mr Kanake.
He said KCB Group, NIC Bank, Bank of Africa, National Bank and Imperial Bank are among the lenders who had disbursed loans to the various subsidiaries of the TSS empire, which subsequently failed to service the debts.
He added that the fraud started when the owner started getting ill two years ago.
Mr Kanake said the situation had left three TSS companies at the risk of being sold over non-payment of the loans.
Last week, three banks which are among the lenders put up more than 6,700 acres of TSS leasehold land and property on the Kenyan coast for sale.
Mr Said, who died in January, had defaulted on loans amounting to more than Sh3.5 billion that various entities in his vast business empire had borrowed from local banks but were unable to pay by early 2016.
The assets on sale represent properties that the TSS entities had pledged directly to the banks or through KAAB Investments, a company owned by the late businessman’s brother-in-law, Aweys Mohamed Ahmed.
The auctioneer had put up for sale a 6,178-acre property fronting the Indian Ocean in Lamu County, and which is currently used for salt production by TSS Salt Manufacturers Limited.
Some 466 acres in Kilifi, also owned by TSS Salt Manufacturers, are also on sale, targeting investors with an interest in salt production.
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