Sunday, May 26, 2024

Majority of Kenyan companies flagged for wash wash are in real estate sector

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A majority of Kenyan companies that have been reported for money laundering are in the real estate sector.

According to a report by the Business Registration Service (BRS) 64.57 per cent of the more than 10,000 registered private companies that were reported for money laundering in the year 2022 were all in the construction and real estate sector.

This report was dubbed as the National Risk Assessment On Money Laundering and Terrorism Financing of Legal Persons and Legal Arrangements – Kenya and it included 10,733 registered private firms that were cited for money laundering.

These claims have now enhanced fears and claims that have been circulating that Kenya’s real estate sector is the primary avenue for money launderers to wash dirty money.

I have a new Sh. 40,000 net job; should I build a house at my boyfriend’s family land?

Over the past few years, the sector has defied all business fundamentals to maintain a high growth rate, even when other critical sectors have slowed down or crumbled.

The report further noted that other private companies that were reported for wash wash were the sectors of finances, manufacturing and retail. These categories were made up of 7.17 per cent of companies in the manufacturing sector, and 5.83 per cent of companies in the money transfer service sector.

4.48 per cent of companies were in consultancy, 4.04 per cent of the companies were in textiles while 3.14 per cent of the companies were in retail.

“The legal structures that had been abused for money laundering purposes were mostly involved in construction, real estate, manufacturing and financial services,” says the report by the BRS stated.

“Review of the enforcement data shows that Private Limited Companies were the most frequently abused legal structure for money laundering purposes in Kenya in comparison to other legal structures.”

The report noted that the private sector had the highest rates of incidents of money laundering with more than 98 per cent of all reported cases.

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