Kenya: Pandora Papers – Pressure on President Kenyatta to transfer billions of dollars abroad

The revelation that President Uhuru Kenyatta’s family own billions of shillings in property and liquid assets hidden abroad has sparked new calls for the repatriation of wealth held by foreigners to help grow the struggling Kenyan economy.

The first family, in a global talk dubbed Pandora Papers, were among the powerful global figures with multi-million dollar properties in foreign countries as well as 3.3 billion shillings of stocks and bonds, which the reviews, should be liquidated and dismissed. to revive the struggling economy.

President Kenyatta, in a statement released on Monday, did not deny ownership of the offshore accounts, but said that “the Pandora papers and subsequent follow-up audits will lift the veil of secrecy and obscurity for those who cannot. not explain their assets or their wealth “.

The statement contained in 12 million files leaked to the International Consortium of Investigative Journalists (ICIJ) did not accuse the First Family of involvement in illegalities, but the president’s political opponents still argue that the colossal sum should be repatriated and invested locally to create jobs for thousands of unemployed youth.

Kikuyu MP Kimani Ichung’wa, a staunch critic of the president, said the wealth held by the president’s family in foreign countries does not inspire confidence in the stability of Kenya’s economy and political system.

He argued that assets held in offshore accounts could help spur growth in an economy that was limping under the weight of debt estimated at 9 trillion shillings.

“If only we had confidence in ourselves and invested in ourselves, millions of people would not languish in poverty. We can pay off our tax debt all at once if the funds are repatriated to the country,” Ichung said. ‘wa. .

Offshore properties

While admitting that it is not illegal to operate offshore properties under Kenyan law, Uasin Gishu MP Gladys Shollei said it was immoral for the president, by virtue of his office, d ” have a bank account abroad.

“It may be legal, but it is immoral. You cannot run a country that suffers economically when you yourself take the wealth out of the country, especially when much of the wealth has been created in it. country, ”she said.

President Kenyatta’s Jubilee government has, for the past five years, been at the forefront of calling on Kenyans to repatriate money held abroad to help grow the local economy.

Over 1,000 billion shillings, the equivalent of over a third of Kenya’s annual budget, were returned to the country in the three years leading up to 2019, from offshore accounts, taking advantage of an offered tax amnesty. by the Treasury.

Read: Wealthy Kenyans Return Sh118bn Hidden Abroad

The Kenya Revenue Authority (KRA) said the amount was repatriated by some 16,000 claimants who took advantage of the amnesty window during which they were not required to declare the source of their wealth or even account for tax arrears from previous years.

In addition to the Pandora Papers, the ICIJ has over the past five years released other documents dubbed the Panama Papers, Paradise Papers and Mauritius Leaks, all of which have involved Kenyan businessmen, politicians and bureaucrats in the use of offshore companies to avoid tax or concealment. illicit funds.

Another study – Elite Capture of Foreign Aid: Evidence from Offshore Bank Accounts – found that Kenya’s political elite from the Moi and Kibaki regimes hid more than 327.89 billion shillings in offshore bank accounts in two decades.

The report provided details of how Kenya’s ruling political elite enriched themselves with either foreign cash aid or bribes from state agencies that received funds from donors. The report, supported by the World Bank, was released last year.

The Pandora Papers have so far not disclosed the identity of other Kenyans, in addition to the president’s family, who hold offshore assets.

Source of funds

Director of Public Prosecutions (DPP) Noordin Haji, in an interview yesterday, said his office would investigate those mentioned in the Pandora Papers if the documents helped uncover the crime as a source of funds.

Mr Haji, however, said it was too early to give a conclusive answer on whether the leaked documents would lead to investigations.

“I can only comment on legal documents. If the documents are officially given to me by a competent authority of a competent person, then I can do something. Some of these dates given (in media reports on the Pandora Papers) predates him. (Mr. Kenyatta) become president. Nothing prevents anyone, in their private capacity, from holding offshore accounts. Only public officials are prohibited, “Haji said.

Activist Okiya Omtatah said the Pandora Papers “will join the archives full of unsuccessful leads.”

“We have no rule of law. The police are captured by the same people accused of corruption, so I see no way out,” Omtatah said.

The ICIJ’s investigation linked the first family to 13 offshore companies. There is nothing illegal about opening offshore companies. But these shell companies are gaining more and more global attention because they have been used to clean up dirty money or hide stolen wealth from poor countries.

The latest revelations from the Finance Uncovered briefing show that family members of President Uhuru Kenyatta have used offshore companies to own three properties in the UK.

One of them, an apartment near Westminster in London, valued at an estimated £ 1million, was until this summer rented to a UK Member of Parliament, although she does not know to whom it belonged.

Other world leaders found in the files include the King of Jordan, the Prime Minister of the Czech Republic Andrej Babiš and Gabonese President Ali Bongo Ondimba.

The Pandora Papers also show that Muhoho Kenyatta, the president’s younger brother who runs large sections of the family’s businesses, owned an offshore company with a portfolio of cash, stocks and bonds worth $ 31, $ 6 million in 2016.

Other documents from the leak show a foundation established in Panama in 2003 for the president’s mother, now 88, “Mama” Ngina Kenyatta. All assets held in the foundation were to bequeath to his son, Uhuru, in the event of his death.

The Pandora Papers contain only a handful of clues as to the purpose of the Kenyatta’s offshore interests or the funds and assets they may have placed in these secret entities.

According to Finance Uncovered, a document simply states that a business in the British Virgin Islands (BVI) was started by members of the Kenyatta family with “the savings of their family and their businesses.”

They reveal that the First Family’s offshore investments, including a company with stocks and bonds worth 3.3 billion shillings ($ 30 million), were found among hundreds of thousands of pages of administrative documents from the archives of 14 law firms and service providers in Panama and the British Virgin Islands (BVI) and other tax havens.

UBP’s private wealth advisers also helped Mr. Kenyatta’s brother, Muhoho Kenyatta, set up an entity in Panama called the Criselle Foundation in 2003.

The foundation was registered at Alcogal’s offices in Panama City and was nominally run by members of the board of directors of the Panamanian law firm.

It was created for the benefit of Muhoho Kenyatta, with his son Jomo Kamau Muhoho, as successor.

A search of the public records of BVI and Panama revealed that most businesses linked to the Kenyattas are now inactive, some of them due to non-payment of regulatory fees.

President Kenyatta in Monday’s statement said he would respond to the leak comprehensively after returning from his state visit to the Americas.

Proceeds of Crime

“The movement of illicit funds, proceeds of crime and corruption thrives in an environment of secrecy and obscurity. The Pandora Papers and subsequent follow-up audits will lift this veil of secrecy and obscurity for those who cannot explain their assets or wealth, ”the President said.

Wealthy Kenyans have traditionally hidden wealth abroad either to escape tax control or to spread their risk by investing in the most politically and economically stable Western democracies.

A report by a US think tank, the National Bureau of Economic Research (NBER), revealed last year that Kenya’s super-rich held more than 500 billion shillings in offshore tax havens around the world.

Another international report published in 2007 detailed how a corrupt Moi administration network looted at least 130 billion shillings and hid it abroad, notably in the UK and South Africa.

The report by risk advisers Kroll and Associates was commissioned by the administration of then-president Mwai Kibaki.

The 110-page report published online details how people close to Mr. Moi set up shell companies, fronts and secret trusts to siphon off Kenyan taxpayer money, which they stashed in banks, real estate and companies in approximately 30 countries around the world.

By Ibrahim Oruko, Paul Wafula, Brian Wasuna, [email protected]

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