By The Weekly Vision Team
Detectives from the Directorate of Criminal Investigations (DCI) have launched investigations at the Business Registration Service (BRS) following reports of individuals losing their directorship and shareholding in companies through document forgery. According to sources within the DCI, the multimillion-shilling fraud is being carried out by outsiders with the help of corrupt employees within the BRS.
Last month, DCI detectives were forced to obtain an arrest warrant for BRS Director General Kenneth Gathuma to compel him to release documents tied to the fraudulent activities. These activities have resulted in business owners losing shares worth hundreds of millions of shillings in various companies. In some cases, after falsifying documents at the BRS, the fraudsters changed company ownership and sold off properties worth millions.
A senior detective from the DCI’s Serious Crime Unit stated, “We decided to intervene after receiving numerous complaints from business owners regarding the ongoing fraud at the BRS, where we suspect several employees are involved.”
One such case occurred last year when Josiah Nicholas Mbathi Mwangi, a city businessman, was charged in court for forging documents to oust his co-directors from Nimba Technologies, a company specializing in the importation of surveillance and security products. Appearing before Senior Principal Magistrate Bernard Ochoi at the Milimani Law Courts, Mwangi faced five forgery charges, including falsifying an affidavit and company minutes, purporting them to be genuine and signed by his co-director, Njeri Kinuthia. Mwangi was also accused of forging a company share transfer deed and a resignation form, both of which he claimed were legitimate and signed by Njeri.
Investigators believe that individuals like Mwangi submit these forged documents to accomplices at the BRS, where the changes in directorship and shareholding are swiftly processed. The fraudsters are so meticulous in their approach that they have been able to file annual returns at the BRS for years without the defrauded parties noticing.
While acknowledging that DCI detectives have been stationed at their headquarters, the BRS has distanced itself from the fraudulent activities. BRS Director General Kenneth Gathuma stated that his team has always worked closely with state agencies, including law enforcement, providing them with necessary evidence and information to assist in investigations and court proceedings.
Regarding the warrant of arrest issued on August 27, 2024, Gathuma mentioned that the BRS immediately engaged with DCI investigators to address the matter. He clarified that the Registrar of Companies acts based on information filed online at the BRS by authorized company representatives during any changes in shareholding or directorship.
While Gathuma denied allegations that BRS officials collude with criminals, he admitted that many fraudulent transactions originate from “dishonest individuals” who have gained access to the system using their credentials. “In all these cases, it is the individuals accessing the system through their user accounts who are responsible for the fraudulent actions,” he explained.
Gathuma also revealed that the BRS has handled numerous cases of alleged fraudulent changes in company ownership and has taken corrective measures upon receiving valid complaints. He emphasized that no BRS officer has been convicted of involvement in the fraud since the automation of their business processes in 2016. However, a disciplinary process is ongoing involving the loss of credentials by one officer to an external fraudster.
