Blow to KRA in tycoon Humphrey Kariuki’s Sh41bn tax evasion case

Humphrey Kariuki

Businessman Humphrey Kariuki at the Milimani Law Courts in Nairobi on October 25, 2021.

Photo credit: Dennis Onsongo | Nation Media Group

The Kenya Revenue Authority (KRA) has suffered a major blow after the High Court in Milimani, Nairobi, quashed and prohibited it from prosecuting tycoon Humphrey Kariuki in the Sh41 billion tax evasion case.

In a landmark judgment delivered by Justice Antony Mrima, the court said the prosecution of the tycoon and his colleagues was unlawful since it was being handled by prosecutors drawn from the KRA instead of the Office of Director of Public Prosecutions.

Further, the decision to charge Mr Kariuki was made by the National Police Service, which was the investigator of the alleged tax crimes, instead of the DPP.

“It is apparent that the criminal case lacks any legal leg to stand on since the decision to charge was made by the National Police Service who was the investigator. Further, the charges were also drafted by the same investigator and that the prosecution was undertaken by the complainant (KRA),” said the judge.

Africa Spirits Limited

 Mr Kariuki together with Mr Geoffrey Kaaria Kinoti, Simon Maundu, Kepha Githu Gakure, Robert Murithi, Peter Njenga Kuria, Africa Spirits Limited and Wow Beverages Limited faced 11 criminal charges related to tax evasion. They were arraigned in 2019.

Dissatisfied with the entirety of their prosecution, their lawyers led by Mr Cecil Miller, Paul Muite and Kioko Kilukumi filed a petition at the High Court contending that the prosecution was unlawful.

The lawyers argued that the criminal charge sheets instituting the criminal charges emanated from the Director of Criminal Investigations (DCI) whereas the Constitution requires all criminal prosecutions to originate from the Director of Public Prosecutions.

While ruling on the petition, Justice Mrima said the National Police Service did not have the power and authority to make any decision to prefer and institute the charges.

The court added that Mr Kariuki’s case was bad because KRA cannot be a complainant and be the prosecutor of the same case. 

He also quashed a gazette notice in which the DPP had appointed three officers of KRA - Sheila Sanga, Peter Mwende Nturibi and Irene Muthee- to be prosecutors for purposes of prosecuting several criminal cases under the tax laws.

Prosecutorial mandate

Justice Mrima found that the DPP had vide the said notice willingly and unconstitutionally acquiesced its prosecutorial mandate to KRA which entity is the complainant in the criminal matters leveled against Mr Kariuki.

“Whereas KRA can investigate any offences relating to tax laws, it cannot prosecute such offences in court. Therefore, to the extent that the disputed provision (Section 107 of the Tax Procedures Act, 2015) allows KRA to usurp the prosecutorial powers of the DPP, the provision cannot stand in the face of the Constitution. The provision is, hence, constitutionally infirm,” said the judge.

In Mr Kariuki’s case, investigations were conducted by the National Police Service while KRA was the complainant.

“Since the KRA was the complainant in the criminal case and that the investigations leading to the institution of the said criminal case were conducted by the National Police Service through the Director of Criminal Investigations, then no officers of KRA or the National Police Service could undertake the prosecution of the said criminal case whether as Special or Private Prosecutors or at all,” said the judge.

Lawful prosecutors

He declared that no court in Kenya shall forthwith accept, register and in any manner whatsoever deal with any charge sheets not prepared and signed by any of the lawful prosecutors.

“For avoidance of doubt, given the constitutional and legislative mandates in carrying out investigations, the National Police Service, the Ethics and Anti-Corruption Commission, the Kenya National Commission on Human Rights, the Commission on Administration of Justice, the Kenya Revenue Authority, the Anti-Counterfeit Agency or any other Government entity mandated with criminal investigation role under any written law, cannot draft, sign and/or present any charge sheets in any criminal prosecution,” he stated.

Given the potential effect of the judgment in the criminal justice system in Kenya, Justice Mrima said the declarations will not apply to previously instituted criminal proceedings.

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