Deputy Chief Justice Kalpana Rawal has been linked to a string of shell companies registered in a notorious Caribbean tax haven popular with tax dodgers, dictators and drug dealers.
She was a director or shareholder of four companies and was actively involved in two of them after she was appointed High Court judge.
Her husband, Mr Hasmukhrai Rawal, was a director or shareholder of seven other companies. Three were used to buy and sell property worth millions of shillings in the United Kingdom.
While it is not impossible for honest people to conduct business in secretive offshore jurisdictions, the British Virgin Islands, along with other tax havens, help individuals to conceal their wealth and either evade tax or launder the proceeds of illegal activities.
Justice Rawal argues that registering and operating businesses in tax havens is a “perfectly legal and legitimate corporate practice in the UK”, where her family is in the real estate business.
Documents showing her business interests are part of papers provided by the International Consortium of Investigative Journalists (ICIJ) that detail how prominent people from all over the world used a Panama-based firm, Mossack Fonseca, to open and operate firms and accounts in tax havens.
South African based media outfit, African Network of Centers for Investigative Reporting, also supported the investigation by giving legal and editorial support.
According to the records, Mr Rawal was the sole director and shareholder of Montague Real Estate, which bought an apartment in London for Sh114 million in 2004. The flat was later sold in 2006.
Mr Rawal was also the sole director and shareholder of Arklyn International Ltd.
The company bought two London apartments, including one for Sh169 million in 2005, which was sold for Sh237 million in 2011.
The same company also bought another flat in London for Sh160 million in 2005 and sold it for Sh218 million in 2012.
Mr Rawal resigned as a director and shareholder in 2011 and all his shares were transferred to Buchanan Ltd.
Innovate Global Ltd, another company controlled by Mr Rawal, bought a house in Surrey, England, for Sh278 million and an apartment in London for Sh98 million.
The London apartment was sold for Sh118 million in 2013. The shares at Innovate Global were split between Rawal, two unnamed bearers and Buchanan Ltd.
Other companies under the control of Mr Rawal but for which no financial activity could be detected include Quintessa Quella Holdings, where Mr Rawal was a shareholder alongside a Mr Vinayak Kantilal Radia, and Windsor Land Investments Ltd, where Mr Rawal was the sole shareholder and director. Others include Windsor Real Estate Partners SA and Actara Investments Ltd.
Justice Rawal’s personal involvement was in four companies.
She and her husband were listed as directors at Forrell Real Estate Inc from 2001 to 2007 and Rocklane Properties Ltd from 2001 to 2003, which were notably active after her appointment to the Judiciary in 2000.
She was also a director and shareholder at Ubique Services Ltd in 1994 and shareholder at Highworth Management Services in 1995.
All four firms were registered in the British Virgin Islands (BVI), a notorious tax haven.
According to registration documents, the companies were used for a slew of real estate functions, including buying, selling and leasing of property.
Rocklane was opened in 2001, a year after Mrs Rawal was sworn in as a High Court judge.
All Rocklane shares (1,000) were held by an unnamed bearer, suggesting that the company might have wanted to keep the owner of the shares secret.
Justice Rawal, together with her husband, resigned as directors of Rocklane in 2003. Neither gave a reason for their resignation.
The same pattern was observed with Forell Real Estate, where both Justice Rawal and her husband were directors from 2001.
Mr Rawal, however, held all the shares in the company. They both resigned as directors in 2007 and were replaced by others.
TRUST BANK LINKS
Highworth Management Services, where Justice Rawal and her husband were directors and shareholders, also had businessman Ajay Shah, a former director of Trust Bank, as a member of the board and shareholder.
Trust Bank collapsed in 2001. Mr Ajay Shah and a Mr Pratful Shah were held responsible for the collapse, and the Central Bank of Kenya in 2014 ordered that their assets be auctioned to recover Sh1.5 billion to pay off depositors. The two were, however, reported to have gone into hiding and the assets are yet to be recovered.
At Ubique Services Ltd, the Rawals were directors and shareholders alongside Rajesh Kumar Rawal, possibly a close relative.
While it is not explicitly wrong that these companies were registered outside Kenya, it is suspicious that the Rawals would choose to have them in the BVI, an archipelago of islands that has long been known and investigated for its opaque business practices that provide the perfect hideaway for individuals with secrets about financial transactions to hide.
Justice Rawal, who is fighting to keep her seat in the Supreme Court after reaching the retirement age of 70 this year, has denied any wrongdoing.
Through her lawyer, Mr Kioko Kilukumi, she said the firms had been part of the family’s real estate business since the 1990s and her involvement either as a shareholder or a director was above board.
“The real estate business, primarily run by her sons in the UK, has been and remains compliant with British and international law. The use of BVI companies is a perfectly legal and legitimate corporate practice in the UK,” said her official statement.
The statement added that the “DCJ has never at any one time been a beneficiary of any monies from any of the said companies”.
And although two companies where she was named as director were in operation after she was appointed to the Judiciary, the embattled judge, in her statement, said that she never participated in the affairs of the companies since joining public service.
This is, however, disputable since records show that she personally signed correspondence regarding Rocklane Properties Ltd in 2003, when she resigned as director.
In addition, she is mentioned as being present in a board meeting held about Forrell Real Estate in 2004 confirming herself as a director of the company.
She did not clarify whether she declared any of the companies to the Judicial Service Commission during her appointment as a High Court judge.
The Kenyan Constitution makes it illegal for judges, being state officers, to open and operate offshore bank accounts. Chapter Six, Article 76 (2) (a) states: “A State officer shall not maintain a bank account outside Kenya except in accordance with an Act of Parliament”.
Former Law Society of Kenya chairman Eric Mutua said offshore accounts are associated with people looking to avoid paying taxes or to hide money from the government.
“It is highly unethical for a judge to engage in such practices,” he said.
His sentiments are echoed by international tax expert John Christensen, who says the practice of opening offshore accounts and companies is not illegal by itself, but that these companies and accounts are used for highly secretive transactions.