A case of tax evasion of 41 billion shillings unveils the secret professional life of a city billionaire

The fortunes of billionaire Reclusive Humphrey Kariuki were never supposed to flow this way, but they do, or rather they will.

With Mr. George Kinoti, the director of criminal investigations abrasive – and an international arrest warrant that holds him as the sword of Damocles, Mr. Kariuki is certainly going through a difficult period after the Director of Public Prosecutions, Mr. Noordin Haji, ordered his arrest.

His alleged crime alongside eight others: tax fraud and fraud of more than 41 billion shillings by Africa Spirits and WoW Beverages in Thika.

Close badociates said the tycoon – who also has a Cypriot pbadport number K0627485 – is out of the country; which means that if he does not return voluntarily, he may have to live like a fugitive.

When the police raided the Thika-based African spirits – which they have since acquired as the scene of the crime – on the evening of January 31, 2019, they came across a finding that surprised them. There were 21 million counterfeit excise stamps from the Kenya Revenue Authority that were disguised as water labels and which, according to KRA officials, would represent a loss of 6 billion shillings. they were on the market.

When the problem appeared, London-based Kariuki's lawyers said the tycoon was not involved in the day-to-day management of the brewery, but was a "venture capital investor" who did not occupy the property. director or management.

This never ended the problem. It all began in January 2019 when the police followed a truck carrying illegal ethanol to the city of Thika in the hope of seeing the final destination. The police learned that the ethanol barrels were hidden under bags of maize, which had hidden the cargo as it pbaded through the Ugandan border.

During a search conducted by Mr. Kinoti, the police not only discovered fake KRA stamps in the factory, but also a set of pipes, an amazing technical feat that bypbaded KRA-set flowmeters to determine the amount of alcohol produced and for tax purposes. . This meant that KRA had no way of knowing how much alcohol was being produced in the company – since the company also had fake stamps in its custody. But to maintain the lie, they usually ordered genuine KRA stamps and allowed a flow to the KRA meters. And for this, the owners of Africa Spirits will have to fight a legal battle to recover the factory, which will amount to billions of shillings, and it will be a difficult task. The Excise Tax Act of 2015, which was amended last year, now allows the KRA to seize the factory and property found in premises where a tax offense was committed .

When I met Mr. Kinoti at one point, he said: "The factory is a crime scene and it will be seized by the state." And before becoming KRA Commissioner General, Mr. James Mburu, one of the highest officials of the KRA involved in the raid also said that "the law is very clear. If you are caught with fake stamps and that once we have legally verified that a law has been violated, Article 31 of the 2018 Finance Act gives us the power to seize the law. 39, factory and goods. "

And this is where this "capital investor" put his money and his spirit. Prior to its closure, African Spirits was one of the largest alcohol manufacturing plants in East Africa and, ironically, one of the most virulent in the fight against counterfeits and illicit alcoholic beverages. And with that, there was no better camouflage.

For six months, detectives had been flipping through the records to determine how much Africa Spirits and WoW Beverages had apparently cheated the tax collector.

The other mystery is how KRA stamps that were not captured in the institution's tracking and tracing system – Excise Goods Management System (EGMS) – were sent to the factory Thika. KRA has always thought that it has a secure system, that it can determine the number of stamps in stock and track their use at the touch of a button. After the raid Thika, they discovered that it was not the truth of the gospel.

Kariuki, a former employee of the Central Bank of Kenya and one of the richest men in the country, found himself in trouble – detectives stuck him to explain why a company around him was involved in the illegal trade.

It was during the interrogation that they discovered that Mr. Kariuki – who is also the owner of Karen Hub and Mt Kenya Safari Club, originally a retreat for famous stars such as William Holden – also had Cypriot citizenship.

Fearing that the DCI would not nail him down, Mr. Kariuki's lawyers went to court and challenged the section of the law that provides for a penalty for non-disclosure of dual nationality. He was fortunate after Judge James Makau temporarily suspended this section of the law after Mr. Kariuki had pleaded with him that he was likely to be arrested at one of the airports for a crime under the law on citizenship and immigration in Kenya.

Rather than making a favorable decision to Mr. Kariuki alone, the judge stated that the order also applied to any Kenyan citizen of his country or diaspora having acquired dual nationality. In rushing to court, Mr. Kariuki confirmed that he had broken the law by not informing the government of his dual nationality, as required by the Citizenship and Citizenship Act. immigration to Kenya.

According to the law, one must declare and register one's acquired citizenship in the prescribed manner within three months of dual nationality.

The law also states that anyone who fails to disclose dual nationality "commits an offense and is liable on conviction to a maximum fine of 5 million shillings or a maximum prison term of three years or both".

Although Africa Spirits is one of the companies in which Mr. Kariuki has invested his money, he also runs other companies worth several billion shillings under the name Janus Continental Group. But Africa Spirits is not part of the Janus Continental Group, which embraces transparency and philanthropy.

In this way, Mr. Kariuki has two empires – remarkably distinct ways. It may be for this reason that he called his Janus group, which means "the beginning and the origin of things".

In the story, Janus is an ancient two-sided Roman god who protected the beginnings and ends of "doors, doors, pbadages and ends."

But Mr. Kariuki may have to ask the two-faced god to escape the current difficult situation.

If he did, it would not be the first lucky escape.

Born 61 years ago in Nyeri in a family of 10, Mr. Kariuki studied at schools in Nairobi and Kagumo High School before joining the Central Bank of Kenya while he was only 19 years old. years as a clerk.

"I was at the bottom of the ladder. I always tell people that in life, you have to start from the bottom; The only place you start up is when you dig a well. So I started as a clerk and then worked in various departments of the bank, "he said. Forbes magazine in 2017.

He had told the magazine that he had received a "decent income" from the Central Bank before starting to import cars, set up the Green Corner restaurant behind Kencom House in Nairobi, and became a billionaire. So true? We do not know.

In addition to Green Corner, Mr. Kariuki also had another restaurant that he named Twigs, serving the most demanding customers.

For some strange reason, Green Corner was better known than Twigs Restaurant.

In the Tumaini House parking garage, Mr. Kariuki's car business has taken off. You will discover the latest models of ultramodern European motor vehicles, such as BMW, VW, Mercedes and Range Rover. Having worked in the CBK Foreign Exchange Department, which approved currencies for businessmen wishing to import goods, Mr. Kariuki was able to easily use his contacts and knowledge.

Mr. Kariuki, then still in his twenties, has started in the distribution of wines and spirits through Wines of the World Limited, as a distributor of Jack Daniels, Bacardi and the Edrington Group, high-end brands include The Macallan, The Famous Grouse and Brugal Rum.

But it only came to public attention in 2001, after the Federal Bureau of Investigations warned the police that 2 billion shillings had been transferred to Crashial Properties Ltd.'s Kariuki company, Charterhouse Bank.

CBK intervened and froze Crucial Properties' account, and Kariuki insisted that the unusually large transfers were legitimate and part of a $ 150 million package (11 billion shillings) that the company had negotiated with international lenders to invest in Kenya.

Later, Judge Samuel Oguk lifted the order and the billion shillings disappeared before Attorney General Amos Wako could request a stay.

With money – and a big break in the oil and horticulture – Mr. Kariuki has invested his money in real estate and in the brewing industry. And so, Africa Spirits Limited – the company that was attacked by detectives – was born. And as a troubled child, Mr. Kariuki was left to hold the baby.