A Kenya Revenue Authority manager and his wife were in July 2020 charged in court for evading taxes worth Sh. 38.6 million.
The manager, Joseph Chege Gikonyo, and his wife Lucy Kangai Stephen, hit the headlines after revelations that despite earning a monthly salary of Sh. 119, 000, he had wealth estimated to be more than Sh. 615 million.
Joseph Chege Gikonyo’s millionaire lifestyle, which was at odds with his salary, spooked the Ethics and Anti-Corruption Commission (EACC) into a suit.
The EACC argued that Gikonyo had no other known sources of income to explain the massive fortune. Gikonyo had declared he had assets estimated at only Sh. 61 million.
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Gikonyo’s questionable wealth included immovable property spread across Nairobi, Mombasa, Kilifi and Kwale counties valued at Sh. 355 million, and cash deposits in various banks totaling Sh. 399 million.
Justice Hedwig Ong’udi issued an order in favour of EACC stopping Gikonyo, his wife Lucy Kangai and their company Giche Ltd from disposing any of their listed assets and property until the source of their wealth was determined.
Among the property listed were two plots in Nyali, Mombasa County, valued at Sh. 125 million, two parcels of land in Shanzu, also in Mombasa, valued at Sh. 26 million and a posh farm house in Kilifi town valued at Sh. 27 million.
Other property at the Coast included a Sh. 40 million house in Mombasa town, land in Kwale valued at Sh. 2.5 million and another plot in Mtwapa valued at Sh. 2 million.
Gikonyo’s listed property in Nairobi included 13 plots in Sosian estate valued at Sh. 75 million, several flats in Umoja estate valued at Sh. 33.5 million, a house at Greenspan estate valued at Sh. 12 million and a Sh. 9 million house in Vescon estate.
The KRA Couple had six bank accounts that EACC wanted frozen are at Barclays Bank and National Bank of Kenya.
Gikonyo had been an employee of Kenya Revenue Authority (KRA) since 1998, when he started off as a junior tax collector at Oloitokitok earning a basic salary of Sh. 24,369. He was the suspended KRA manager in Eldoret with a net pay of Sh. 119,617 at the time he was busted.
Through suit papers filed in court, EACC claimed it was impossible for a civil servant of Gikonyo’s status to acquire such massive wealth in a span of 18 years without any other known source of income apart from his salary and the bonus he receives from tea farming in Murang’a County.
The EACC attached all his payslips from 1998 and statements of proceeds from tea farming, which show he has earned a total of Sh. 45 million in the last 20 years.
“During the period under investigation, the defendant’s known sources of income were cumulative salaries totaling Sh. 14 million, proceeds from sale of tea totaling Sh. 4 million, profit from sale of property of Sh. 21 million and cumulative sacco loans of Sh. 5 million,” said EACC.
James Kariuki, the commission’s forensic investigator, swore an affidavit to support the application. “Investigations revealed that at some point, they were making huge cash deposits into their account in tranches of Sh. 200,000 almost daily.
They could not explain the source of such deposits, which made us believe the amounts were proceeds of crime,” said Kariuki.
He claimed that an analysis of Gikonyo’s mobile phone number revealed that he has received a total of Sh. 43, 913,116 through mobile money transfers sent to him by directors and managers of clearing and forwarding companies.
According to EACC investigator, Gikonyo had taken out insurance policies for his family totaling Sh. 3.7 million and bought shares in Safaricom Ltd, Equity Ltd, Kenya-Re and KenGen.
“We were not satisfied with the explanation he gave about the disproportion of his wealth and what was declared in his income, assets and liabilities records.
He must be compelled to return to the public Sh. 615, 457,059 being the difference of his unexplained wealth and known income,” said Kariuki.
Gikonyo had apparently told the investigators that the massive wealth came from his businesses – transportation, dairy and fish farming as well as selling spare parts, building materials and horticulture products.
But Kariuki stated that when asked for evidence of the other businesses, the tax collector could not produce any material or books of accounts to prove that he was involved in those businesses.
He added that EACC’s investigations further revealed that Gikonyo, his wife and their company were involved in tax evasion that had denied KRA millions of shillings.
“The assessment report revealed that they owed taxes totaling Sh. 38.6 million. They are involved in corruption offences of dishonesty and tax evasion and must be made to surrender to the Government whatever they have illegally acquired,” said Kariuki.
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