NAIROBI, Kenya, Feb 10 – Machakos Senator Johnson Muthama has been named in secret documents published online alleging that banking giant HSBC helped wealthy customers dodge millions of dollars in taxes.
In the files – which has Kenya ranked 58th among nations with the highest dollar deposits in bank accounts in Switzerland with an amount totalling Sh51.18 billion – Muthama’s name was mentioned in connection with the account ‘Rockland96’ which was set up in 1996 and closed in 2000.
While confirming that the account was opened during that period, the Senator explained that it was a requirement because of his dealings with foreign business partners and once he completed his transactions, the account was closed.
“This was necessary because of my foreign directors/partners who were in the process of setting up the mining company; funds were needed. The account was therefore opened to facilitate remittance of funds into one central account for the sole purpose of purchasing mining equipment and spare parts. Once the mine was set up, the account was consequently closed,” he explained.
Bank files listed eight of his relatives also linked to the numbered account. The leaked files do not specify the exact role that he had in relation to the accounts.
The report indicated that Muthama is the executive chairman of Muthama Gemstones (Kenya), an international company that deals in mines and precious stones but does not however specify the exact role that he had in relation to the accounts.
It further pointed out that Kenyans had 463 client accounts opened between 1975 and 2006 and linked to 1,093 bank accounts.
It also revealed that of the 742 clients associated with Kenya, 32 percent have a Kenyan passport or nationality.
The account linked to Kenya with the highest amount of money deposited by an unnamed person had Sh3.27 billion.
A range of current and former politicians from Russia, India and various African countries, as well as Saudi, Bahraini, Jordanian and Moroccan royalty, and the late Australian press magnate Kerry Packer were named in the files.
There were calls for a Swiss probe against the bank, which is already facing prosecution in France and Belgium.
So far Switzerland has only launched an investigation against Herve Falciani, the HSBC employee-turned-whistleblower who stole the files.
The huge cache of files from Europe’s biggest bank was stolen by the IT worker in 2007 and passed to French authorities, but had not been previously made public.
The documents, published at the weekend, claim the London-based bank’s Swiss division helped clients in more than 200 countries evade taxes on accounts containing $119 billion.
British lawmakers announced they were launching an inquiry into HSBC’s activities.
The International Consortium of Investigative Journalists (ICIJ) obtained the files via French newspaper Le Monde and shared them with more than 45 other media organisations worldwide.
The documents show that HSBC opened Swiss accounts for international criminals, businessmen, politicians and celebrities, according to the ICIJ.
The revelations renewed calls for a crackdown on sophisticated tax avoidance by the wealthy and multinational companies. Tax avoidance is legal, but tax evasion is not.
HSBC’s reputation has been tarnished in recent years by a string of high-profile controversies, including oversight failures which meant Mexican drug traffickers could launder money through its accounts.
Shares in the bank were down 1.64 percent at the close of trading in London.