Tuesday, August 13, 2013

Kenya: Illegal Gold Exports Linked to JKIA Blaze

The Star

Kenya: Illegal Gold Exports Linked to JKIA Blaze

Illegal gold trade involving billions of shillings between business men in Kenya, United Arab Emirates, Italy, and South Africa has been linked to last week's fire at the Jomo Kenyatta International Airport (JKIA).
Documents in possession of the Star, including a report prepared by the Criminal Investigations Department (CID) prior to the fire incident point to a major collusion between immigration officials, custom officials and police at JKIA in the illegal gold trade and money laundering.
The Flying Squad in a confidential report has revealed that Sh3.4 billion has been transiting through JKIA every month in cash without any scrutiny and without the involvement of any bank or financial institution.
On the spot are companies which Flying Squad says have been exporting gold and "transact in cash without involving banks or foreign exchange dealers."
The Flying Squad has unearthed that the gold exporters on the spot have not been using official monetary instruments declaration form at JKIA "but rather counterfeit forms which are not in quadruplicate as required by law"under the guise that the genuine and official forms are out of stock.
Flying Squad has also said that from February 2013 to May 2013, passenger manifests obtained from Emirates Airline indicate the different names of people suspected to be couriers of the cash which are also reflected in the currency declaration forms.
The squad has said there in need for an "explanation for cash amounting to US$40 million (Sh 3.4 billion) per month transiting through JKIA without any scrutiny and these large sums of cash not being banked."
The report by CID was finalized a few days before last week's inferno at JKIA that destroyed the international arrivals terminal at Kenya's largest airport. The Wednesday's fire destroyed Customs area, immigration area and airport police.
In essence, the fire destroyed all records at the immigration area, those of the custom department as well as vital information held by the police.
There is a possibility that the subject of this investigation started on May 22, 2013 by officers from the Flying Squad Unit led by the unit's head Munga Nyale, will be of interest to those looking in who may have started the fire.

Vital documents related to the 17 shipments of gold valued at Sh 6.2 billion which was exported in 2010 by eight companies to the UAE, Canada, Italy and South Africa are believed to be among those destroyed during the fire.
In 2011, the same companies exported gold worth Sh5.7 billion and a further Sh4.5 billion last year.
Highly placed sources with the police and those familiar with the gold sector claim that unscrupulous gold traders working in cahoots with custom officials, police and immigration officials to facilitate the business have been shipping off gold smuggled from neighbouring countries such as Democratic Republic of Congo under the guise that it was all from Kenyan mines. "The gold is exported as originating from Kenya. It is usually transported at night to JKIA where unscrupulous immigration officials, custom officials and police collude to ensure that the cargo leaves the country without proper documentation or scrutiny."
The sources said that once the shipment arrives at its destination, payment is made in cash--usually in dollars. The cash is then brought into the country by couriers who are met at the airport by customs and immigration officers who facilitate their entry without proper documentation.
The law requires that residents and non-residents bringing in cash equivalent to USD 5,000 (approximately Sh 500,000) and more need to hold documents indicating the source and the purpose of the amount.
In its report, the Flying Squad has warned that there is possibility of the large amounts of cash illegally entering though JKIA "being used for funding terrorism, purchasing or smuggling of arms or money laundering."

team over duty free shops demolitions at Jomo Kenyatta International Airport

Updated Tuesday, August 13th 2013 at 00:23 GMT +3

From left: Transport Secretary Michael Kamau, KAA Managing Director Stephine Gichuki and KAA lawyer Fred Ngatia when they appeared before Parliamentry Committee on Transport at Parliament Buildings yesterday.


By Isaiah Lucheli
Nairobi, Kenya: MPs clashed over the circumstances surrounding the demolition of Diplomatic Duty Free Shops at the Jomo Kenyatta International Airport (JKIA) during a stormy parliamentary committee session.

During the heated session, the over 20 MPs, who are members of the Parliamentary Committee on Transport, differed over whether the Kenya Airports Authority ( KAA) had breached the law.
But authorities told the MPs the genesis of the contract that saw a foreigner secure exclusive rights to operate the duty free shops was the “greatest fraud”.
The session almost degenerated into a shouting match when Embakasi South MP Irshad Sumra accused KAA Managing Director Stephen Gichuki and the head of security of being economical with the truth on the events surrounding the demolition of the shops.
Attempts by his colleagues to cool him down fell on deaf ears as Mr Sumra claimed that the airport’s CCTV cameras had been switched off during the demolition and the youths who undertook the exercise were not screened. He termed it a “serious security breach”.
Mr Sumra also sensationally claimed that KAA had left electric wires exposed, which he said caused the fire at JKIA, but Head of Airport Police Eric Kiraithe clarified that the electrical installations were handled by electricians in the operation.
KAA was hard pressed to explain how the 350 youths had accessed the airport and Sumra sought to have the head of security produce their names and national identification card numbers.
Nairobi Women Representative Rachael Shebesh also sought to have lawyer Fred Ngatia, representing KAA, disqualify himself over conflict of interest, claiming he had at some pointed acted as businessman Kamlesh Pattni’s lawyer.
Mr Pattni is linked to the duty free shops.
Tabled Documents
A heated debate ensued, with Ms Shebesh tabling documents to prove her claims, but the lawyer denied having acted for Pattni and insisted that he had represented another party in a suit involving World Duty Free shops.

Mwingi Central MP Joe Mutambo also produced a letter dated August 6, which he claimed had sought to have Mr Ngatia disqualify himself from the session for being an interested party.
However, Mutambo’s Runyenje’s counterpart Cecily Mbarire asked the committee chairman not to admit the letter as it did not bear any signature or stamp while Ngatia said he was not aware of such a letter.
Ngati had earlier told the committee that the contract that led to the establishment of the duty free shops was an illegality and termed it fraud.
This led to the MPs tasking the KAA MD to explain why the authority had been renewing the contract of the duty free shops if the contract was illegal.
The MD explained that the authority had been dogged by irregularities for the past 25 years, but explained that the recent demolitions were part of efforts to streamline the authority’s operations.
Security Risk
During the session, Transport Cabinet Secretary Michael Kamau said the shops had posed a serious security risk and had also hampered the completion of Unit 4.
Ngatia explained that the duty free shops’ ownership had been wrestled from the initial owner, Nasir Ibrahim, by Pattni when Nasir was expelled from the country.
Ngatia told the committee that senior government officials had been involved in the scam.
He pointed out that Nasir had revealed in a suit he filed in Washington seeking compensation after his expulsion that he had paid a $2 million bribe to get the contract signed in 1989.
Three senior government officials at that time, namely Charles Mbindyo (Permanent Secretary, Treasury), Hezekiah Oyugi (Internal Security) and Secretary to the Cabinet Philip Mbithi failed to act on letters that were issued over the scam.

Sabahi (Washington, DC)

Kenya: U.S. Experts Assist Nairobi Airport Fire Probe

Two American military fire experts have arrived in Nairobi to assist in the investigation of Wednesday's fire at Jomo Kenyatta International Airport, Kenya's Daily Nation reported Friday (August 9th).
The United States is providing immigration equipment to help the airport return to normal service, and personnel from US Federal Bureau of Investigations (FBI) and the US embassy are helping Kenyan authorities.
Detectives have not yet established the cause of the fire, but they looking into whether it was accidental or set intentionally.
"There are different agencies even from out of the country involved in the probe and they are working tirelessly to come to the root cause of the fire," Secretary of Transport and Infrastructure Michael Kamau said.
The fire has provoked international interest since it fell on the 15th anniversary of co-ordinated terrorist attacks on the American embassies in Nairobi and Dar es Salaam in 1998.
The news of the involvement of foreign experts came as Kenyan President Uhuru Kenyatta chaired a meeting of security officials to discuss the airport fire, according to Kenya's The Standard.

Kenya: Seven GSU Held for JKIA Looting

Photo: Mike Kariuki/ Capital FM
Kenya police, fire fighters and Airport workers held over JKIA looting.
SEVEN GSU officers and three fire fighters have been arrested for looting money and alcohol following Wednesday's at the JKIA. The seven were found with notes that were partially scorched and have been detained at the GSU training school for processing before they are charged in court next week.
The seven were among the first officers on the scene and instead of containing the fire or securing the scene, they started looting cash from the ATMS.
Firemen who arrived at the scene were also reported to have engaged in the looting of cash from the forex bureaux situated in the terminal as well as mobile phones, cameras and other items from the shops. The looters targeted the National Bank, ECO Bank and Pesa Point ATMs. Equity and KCB ATMs which are also on the ground floor were not looted as they are located on the outer side of the building.
The seven were arrested after they started bragging how it had been difficult to break into the ATMs. Unknown to them, some of the people they were talking to were plainclothes CID, military and national intelligence officers and even Kenya Airports Authority personal who were able to identify them.
Head of security at the airport Erick Kiraithe said there was nothing his men could do to stop individual tenants from accessing their offices to salvage what they could from the debris.
The Chief Fireman Brian Chunguli denied his officers had acted in an unprofessional manner. "It is the work of the police to secure scenes. Our work as firefighters is always to contain and put out the fire. That is our key mandate," said Chunguli.
In his second visit to the airport since the inferno, President Uhuru Kenyatta allayed fears that the fire was an act of terrorism or sabotage and said preliminary investigations indicated that it was a mere fire incident that got out of control due to incompetence,negligence and poor disaster response.
Asking Kenyans to avoid speculation until the technical expected completed their investigations in a few weeks time' President Uhuru ordered the reorganization of all security agencies which will now be placed under one command.
He also ordered the complete overhaul of all disaster management organizations which will now operate under one co-ordinating agency.
Three years ago, Paul Kanyi Muthee published his thesis on Stakeholders assessment of Airport disaster preparedness and mitigation: a case study of Jomo Kenyatta International Airport (JKIA) for his Masters degree in Sociology (Disaster Management) and made similar recommendations.
Muthee, who has trained flight attendants and pilots for Kenya Airways, Aircraft Leasing Services (ALS), Ghana Airways, Air Kenya, Delta Connection, Air Uganda, Fly 540, Rwandair, African Express, Jetlink Express, among others recommended the synchronization of a comprehensive and exhaustive training curriculum with the acquisition of modern disaster preparedness equipment to cater for all facets of disaster at the airport. He also recommended that "a well spelt-out coordination mechanism' be established 'to avoid the current situation where each agency responds according to its own assessment of the situation."
Yesterday, President Uhuru said while the cost of the damage to the terminal was yet to be determined, a full refurbishment of the three terminals at the airport would be done to ensure they reflected the face of Nairobi as the regional hub in aviation.
He said a temporary terminal with the capacity to handle 2.5 million passengers was under construction and will be ready in the "coming few weeks".
The government is also working in fast tracking the completion of construction works at the new Terminal Four to help deal with the crisis. The terminal was expected to be ready by March next year but its completion date may be expedited.

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