Shady gold export trade that rivals Kenya's Goldenberg scam

Saturday, June 8th 2013, By Ben AginaNAIROBI, KENYA: In what reads like a sequel to the 1990s Goldenberg scandal, another high-level conspiracy between senior Customs officials, local and international wheeler-dealers are scheming to defraud the Government.

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And now two private companies are at the centre of a storm following allegations that they are exporting 1,200kg of gold monthly when the national production is less than 50kg a year. Fafi MP Barre Shill sensationally named Skyhawk International Ltd and Ushindi Exports, accusing them of purporting to export gold to the United Arab Emirates.

The two firms are reportedly associated with businessman Nagin Pattni. However, a search at the Registrar of Companies show Franck Ng’ang’a Gikonyo and Dhanek Vishal Rasikhlala as the directors of Skyhawk International Limited with Arvindkumar Pattni and Rameshkumar Vithaldas Gagada as directors of Ushindi Exports Limited.
When we contacted Nagin Pattni on the telephone he said: “My lawyers will be contacting you tomorrow (Wednesday last week)”. A day later, lawyer Cliff Ombeta called this reporter and promised to respond to the allegations. He did not.
We followed up with a text message to Mr Pattni, which again was not responded to. But moments later the same day, Mr Ombeta sent a text: “Please stop communicating directly to my client. We spoke. Deal directly with me. Ombeta.”
Meanwhile, in Parliament while requesting a statement from Finance, Planning and Trade and Natural Resources committees, Shill further claimed up to $40 million transit through JKIA without any scrutiny.
He said there were two gold mines with gold: Karebe Gold Mining Limited in Nyatike and Kilimapesa Gold Limited in Lolgorien, which, combined, produce 50kg a year.
The MP is seeking to be told where the two companies have been sourcing the gold since 2005 to present with the receipts of where they were bought and sold.
He is also seeking to know the companies Skyhawk International Ltd and Ushindi Exports trade with in the UAE.
Cash transationcs
“I also want to know the amount of duty and tax being paid by the two companies to Kenya Revenue Authority from 2005 to date, including the date of last returns made by both companies as required by law,” he stated.
He also wanted to know the reason the two companies transact in cash instead of transferring funds through banks, as is the norm for any export business.
The MP claimed the two companies are not using the official monetary instrument declaration form at JKIA but instead are using counterfeit forms, which are not in quadruplicate as required by law.

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He accused the two companies of making transactions through cash payment and evading paying tax.

Speaker Justin Muturi ordered the two committees to issue the statement on Thursday next week.
Terming the whole business as Goldenberg II, the MP also wants the committees to reveal the identity of all companies in the Emirates the two companies do business with.
He wants the amount of duty paid by the two companies to the Kenya Revenue Authority since 2005 to date, including the dates of the last returns made by both companies as required.
“The committee must explain the reason for the two companies exporting gold and transacting in cash instead of transferring funds through the banks,” he reiterated.
Investigations by the Standard on Sunday reveal the two private companies have been exporting huge amounts of gold per month when the national production is less than 50kg per year.
Notwithstanding the low gold production, information from sources show that 300kg per week are exported from Kenya to international destination fetching an amount of $10 million per week or $40 million per month in cash.
The two companies are accused of using cash to trade and nothing goes through the firm’s banks, as is the norm for exports.
Documents in our possession show that although the value of the gold exported every year as shown in Kenya shillings, Ushindi Exports Limited continue to use old Currency Declaration forms (which are declarations in the importation of $5,000) instead of the legal Monetary Instruments Declaration Form.
The legal Monetary Instrument Declaration Form is far more detailed than the Currency Declaration Form (CDF), which Ushindi and Skyhawk have been using.
Documents in our possession show how on April 8 this year, Customs Service Department using official stamps confirmed receiving $430,000 Ushindi being payment of gold sold in Dubai.
No paper trail

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The entry number of the consignment was 1816286 and was loaded through Emirates Flight EK 721. 

On the same day, using the same flight, the same entry number but by different declarants (recipients), Ushindi Exports declared a similar amount of $430,000.
The question is how possible it is to export gold the same time and receive the proceeds in cash without any paper trail.
Our investigations also show how Ushindi exported gold to Dubai to a Director of a sister company (Skyhawk International Limited) Vishal Rasiklal
Another interesting observation is that signature of the declarant have remained constant in all the Currency Declaration Forms processed. What has been changing in the full glare of the Kenya Revenue Authority officials are the names of declarants (Sunil and Manoj Sagoo respectively).
The Goldenberg scam cost Kenya an estimated $600 million in just less than three years. Some computations indicate as much as $1 billion could directly and indirectly been siphoned through Goldenberg networks.
The scam tore through Kenya’s political, economic and social fabric not just during the years when the actual transactions took place but also long afterwards.
The recorded transactions associated with Goldenberg were mainly between 1990 and 1993 but the spill-over effects continued to be felt for more than a decade thereafter, even until President Kibaki’s election, under the National Rainbow Coalition (NARC) party, in December 2002.