A white-collar crime haven
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By Pravin Bowry White-collar crimes in Kenya pay. The scourge will continue unless the matter is addressed at the highest level. The reason for this abyss is the existing legal machinery. For example, the full extent of the Sh7.6 billion scandal at Kenya Pipeline Company Limited, a private limited liability company in which the Government is the only shareholder, is still unknown despite the matter having surfaced months ago. The alleged architect is on the run and others appear to have gone scot-free. It is significant to note that the Attorney General, Treasury and Ministry of Energy are all represented in the Board. The then Managing Director reportedly informed the Minister for Energy Kiraitu Murungi in or around the second week of January that a large volume of petroleum products had been released to Triton illegally by certain employees. The minister suggested that KACC conducts investigations together with the CID and on January 8, wrote a letter to KACC and CID and copied the letter to the Prime Minister, Head of Civil Service Francis Muthaura, Energy PS Patrick Nyoike, Treasury PS Joseph Kinyua, the then Police Commissioner Hussein Ali and CID Director Karanja Gatiba among others. In the end, no arrests no prosecutions. In true Kenyan fashion, we will soon forget the matter and life will go on as usual. Investigators’ nightmare The legal dilemmas are manifold. If the Attorney General or his representative is on the Board, can he be said to be impartial and be the sole prosecutorial authority? Has the Minister of Energy by his letters and conduct exonerated himself and his officers? KACC cannot by law move an inch without the Attorney General’s mandate to prosecute. And remember the AG is on the Board of KPC. It must also be appreciated that recent changes in the law have made the life of investigators a nightmare. Days of long detentions and confessions are long gone. Only confessions before a magistrate are admissible. Beating the hell out of suspects and getting evidence is no longer advisable as it does not bear fruits. The result is the overworked investigators have to work real hard, dig into files, archives and records of recalcitrant accomplices without adequate financial and technical crime detection resources. KACC now has specialised lines of crime detection but by training and mentality, they remain police investigators with little scientific and forensic backup. In fact, CID has far superior scientific know-how. No records Another reason why Kenya is the haven of white-collar frauds is to be found at the Attorney General’s Chambers. One can register a limited liability company, undertake massive frauds in the name of the company and move on without any traceable history. Records for most fraudulent company deals are unavailable and untraceable at the Registrar of Companies. Most suspect land deals mentioned in the Ndung’u Report were never traceable, apparently because the company records were never available. The genesis of the Anglo Leasing scams arises from this corporate untraceability and total abuse of the Companies Act. The Act is so obsolete in the present context that it is a mockery of the corporate laws, viewed from other international company law developments. Most multi-million dollar crime investigations come to a dead end once they reach the Registrar of Companies office. Changes in the Company law, registry record keeping rules, filing of returns and relaxation of evidential rules on production of documents and possibly the rules on burden of proof may well be a way forward. The author is a lawyer in Nairobi {bowryco@iconnect.co.ke}