The Directorate of Criminal Investigations (DCI) officers from the banking fraud unit have arrested Yogesh Pattni the CEO of Victoria Commercial Bank over what multiple sources attribute to money laundering allegations.
The arrest of Pattni comes just a day after Sugar Baron Jaswant Rai was abducted and released by unknown men in the Kilimani area of Nairobi.
At the same time, DCI Detectives are investigating claims of how Harveen Gadhoke who is said to be a signatory to a Dubai based Company Vartox Resources Inc which illegally bought Mumias Sugar Company Ethanol and Co-generation Plants was appointed as the new Administrator of the struggling Mumias Sugar Company.
Victoria Bank which is alledgedly owned by Jaswant Rai’s Cousin sold the two Assets to Vartox after mysteriously acquiring them from Eco Bank and Proparco where they were being held as surity for loans acquired by MSC.
Recently, DCI arrested Rai at the JKIA upon arrival from Uganda where he was detained for hours before being driven to the DCI Headquarters along Kiambu Road for grilling.
He is being investigated for his involvement in the illegal and mysterious sale of the two MSC Assets including Money laundering.
Victoria Commercial Bank was alleged to have been involved in money laundering in the Mumias Sugar saga.
Mumias was placed under receivership by the Kenya Commercial Bank (KCB) in 2019 to protect its assets and maintain operations.
The miller owed KCB and several other creditors over Ksh29 billion.
KCB placed the miller under the hands of Ponangipalli Ramana Rao in a resuscitation plan.
Some of the Mumias assets that had secured loans from Eco Bank and French Development Agency Proparco moved between the two banks to Victoria Commercial Bank in a suspicious transaction.
The two assets, co-generation plant and Ethanol valued at Ksh1.9 billion and Ksh4 billion respectively, later ended up with Dubai-based firm Vartox Resources Inc.
In transferring the assets, the parties ignored an inter-lenders agreement signed on September 27, 2010.
The deal detailed exclusion of the two syndicated assets from the existing lender security.
The agreement required each lender to notify other parties of ‘any modification, termination, amendment and transfer of any security.’
Other lenders in the deal included Barclays Bank and Stanbic Bank.
“If any lender wished to discharge its security it will notify the other lenders prior to affecting the discharge…Consultation notice to be issued to all lenders for a period of 10 working days,” the agreement read.
Contrary to the agreement, however, Proparco and Ecobank went ahead to assign their right to Victoria Commercial Bank on October 4, 2021, without notice to KCB, Barclays Bank or Stanbic.
Interestingly, the transactions happened when the receiver-manager was engaged in the leasing process for the survival of the sugar firm.
Pattni’s alleged arrest comes days after Kabras Sugar owner Jaswant Rai was apparently taken hostage on Friday evening.
Rai was freed on Sunday by his alleged captors.
President William Ruto in an attack on the billionaire said his government was working towards reviving the sugar industry but its efforts were being thwarted by cartels.
“Do not be worried, I am alert to make sure everything will be okay. There is no one who will meddle. Do not be worried about someone coming to talk to us. Someone was telling me Rai. Who is Rai? No, that is not possible,” said the head of state.
Ruto wondered why privately owned sugar companies were generating more profit than their public competitors despite the government pumping a lot of money into the latter.
He said the government will deviate from solely running the public sugar mills in the region as the strategy had failed in the past.
Rai and Pattni have now both been questioned by the DCI on money laundering-related issues.
The heart of this investigation revolves around a sophisticated method of transferring substantial sums of money through VCB.
The Central Bank of Kenya is also conducting a parallel investigation into this matter.
The modus operandi is as follows: significant amounts of money are siphoned from VCB bank accounts and routed to distant offshore destinations such as Dubai and Mauritius.
Once there, these funds are employed to facilitate illicit activities, including arms trade, narcotics distribution, and even bolstering political campaigns.
The primary focus is on Rai, who is suspected of exploiting VCB as a conduit for disguising the origins of funds generated from his sugar business and other business ventures.
He further faces allegations of evading taxes and engaging in bribery to secure preferential treatment in contractual matters.
Similarly, Pattni, occupying a high-ranking position within VCB, is suspected of playing a pivotal role in facilitating the mechanics of the money laundering operation through his influential position.
There are allegations that he has utilized VCB’s funds to acquire real estate assets both domestically and internationally.
The DCI has seized pertinent documents from Rai’s premises and VCB’s offices, a move aimed at aiding their meticulous investigation into this intricate scheme.
To ensure a halt in the progress of potentially unlawful activities, the DCI is considering taking the step of freezing numerous bank accounts associated with Rai, Pattni, and even Nurdin Akasha, along with their associates.
This decisive action underscores the seriousness of the investigation as authorities work assiduously to unearth the covert maneuvers that may be transpiring behind the scenes.
When Jaswant Singh Rai and Yogesh Pattni were both recently held for hours by the Directorate of Criminal Investigations (DCI) at a Nairobi airport on money laundering-related issues, Rai was asked about his links to Muhoho Kenyatta, the brother of former president Uhuru Kenyatta, and his alleged financing of opposition figures, including Raila Odinga’s presidential bid in the 2022 general elections.
Rai is said to have used his influence with Muhoho Kenyatta to secure lucrative deals and contracts from the government during Uhuru Kenyatta’s regime.
He is also said to have benefited from protection and immunity from prosecution for his illegal activities.
Rai has a history of controversies and scandals involving his sugar business.
He owns several sugar companies in Kenya and Uganda, including West Kenya Sugar Company, Sukari Industries, Menengai Oil Refineries, Kinyara Sugar Works in Uganda, and Rai Paper Mills.
During the tenure of former President Uhuru Kenyatta, Rai faced allegations of importing mercury-poisoned sugar from Brazil and Dubai.
The imported sugar was discovered to contain elevated levels of mercury, copper, lead, arsenic, and other harmful substances that pose significant health risks to consumers.
Rai was accused of collaborating with government officials and agencies to bypass inspection and clearance protocols at the port of entry.
He was charged with repackaging and relabeling the sugar as domestically produced, deceiving unsuspecting customers.
Rai’s business practices have also been marred by accusations of exploiting farmers and manipulating sugar prices.
These allegations encompass delaying payments to farmers, inadequate compensation, unjust deductions, and fees.
He has often been accused of stockpiling sugar to create artificial shortages and inflate prices.
Rai’s operations have encountered resistance from industry players like the state-owned Kenya Sugar Board (KSB) and the Kenya Sugar Research Foundation (KESREF).
Illegal sugar imports from neighboring countries, such as Uganda and Tanzania, have negatively impacted Rai’s business.
He once faced accusations of involvement in smuggling and the dumping of sugar in the Kenyan market, resulting in unfair competition and harm to local producers.
Environmental degradation and human rights violations have also been linked to Rai’s sugar business.
Accusations include polluting water sources, deforestation, displacing communities, and mistreating workers in his sugar plantations and factories.
The Rai-Pattni-Akasha nexus is a complex web of money laundering, political manipulation, and corruption that involves some of the most powerful and influential figures in Kenya.
The arrest of Yogesh Pattni, the CEO of Victoria Commercial Bank, has exposed the illicit business dealings between him, Jaswant Singh Rai, the owner of a sugar empire, and Nurdin Akasha, a notorious member of the Akasha crime family.
The saga also reveals how Mumias Sugar, once Kenya’s largest sugar producer, was brought to its knees by the machinations of these individuals and their associates.
The investigation by DCI is still ongoing, and more revelations are expected to emerge in the coming days.
The fate of Yogesh Pattni, Jaswant Singh Rai, Nurdin Akasha, and others involved in this scandal hangs in the balance, as they face possible charges of money laundering, arms dealing, fraud, tax evasion, and other crimes.
The case has also raised questions about the role of banks, regulators, and law enforcement agencies in curbing financial crimes and ensuring accountability in Kenya.
Ultimately, the Rai-Pattni-Akasha nexus is a story that exposes the dark underbelly of Kenya’s political and economic system