Individuals and institutions that intend to make quick money through the infamous pyramid schemes have been put on notice.
A proposed law tabled in Parliament proposes stiffer penalties for anybody or institution that engages in the business.
The Bill slaps a Sh10 million fine or a ten-year jail term or both on individuals who engage in the business.
Sponsored by Ikolomani MP Boni Khalwale, the Prohibition of Pyramid Schemes Bill 2012, also suggests compensation for the victims of the scheme. Hundreds of Kenyans lost billions of shillings to such schemes years ago.
A report that inquired into the loss of Sh8.2 billion was tabled in Parliament in 2010. It detailed how about 148,784 investors lost Sh8.2 billion in two years to the profiteers, some of whom were claimed to be prominent individuals in society.
The ten pyramid schemes took away Sh7.3 billion, according to the Task Force report then presented to the House by Co-operatives Minister Joseph Nyagah. The Bill states that a person commits an offence if he or she knowingly promotes a pyramid scheme.
It is also an offence to participate in a pyramid scheme or induce another person to participate in it knowing that any benefit gained is entirely or substantially derived from the introduction to the scheme of new participants.
Pay compensation
In the proposed law directors and partners of illegal firms fleecing Kenyans will also have no excuse that they were in the dark about the activities.
The Bill provides for the liability of a relevant person of a corporate body or unincorporated body the firm or a person as a member of the unincorporated body commits an offence.
The proposed law proposes that perpetrators of the schemes pay compensation, which is recoverable as a civil debt.
However, the Bill will not interfere with pending claims filed by victims against owners of pyramid schemes that have since collapsed.
The Bill has been committed to Parliamentary Committee on Agriculture for scrutiny before Parliament debates it.
– Stories by Peter Opiyo and Steve Mkawale
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