Futuristic Tatu City Probed Over Money Laundering

The Ethics and Anti-Corruption Commission (EACC) has been granted permission by the High Court to investigate the multibillion-shilling Tatu City real estate project in Kiambu over allegations of tax evasion and money laundering.

The case was heard by Justice Esther Maina of the High Court, who granted the permission stating that the anti-graft agency has the authority to investigate the offenses.

“It is my finding that in this case the matters being investigated transcend the dispute between the individual shareholders and the petitioners as they revolve around the commission of the offenses of tax evasion and money laundering,” the judge said.

According to the EACC, Tatu City was engaging in a type of money laundering known as a loan back scheme.

It also claimed that tax evasion and money laundering are carried out through paper transactions involving a web of interlocking companies, nominee shareholders, and purported loans and financing structures.

Kofinaf, a sister company, incorporates special purpose vehicles such as Purple Saturn Properties, with shareholding and directorships held by its nominees specifically to hold parcels of land.

In 2019, Tatu City and Kofinaf Company filed a lawsuit seeking to overturn letters sent to the Lands PS requesting that the State place a caveat or purchase warning on 33 parcels of land.

The EACC also requested documents from the government, such as survey plans, maps, valuation reports and official searches.

However, Tatu stated that the EACC lacks the authority to order the issuance of caveats in tax disputes or to investigate money laundering claims. The companies argued that tax evasion claims are civil in nature and do not fall under the mandate of the EACC.

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