Companies are collapsing because their top managers are looting and covering their plundering by cooking the books of account, Interior CS Fred Matiang'i has said.
Matiang'i on Thursday said it was unfortunate that corporate fraud had succeeded in killing otherwise thriving business enterprises that employed thousands and sustained hundreds of local suppliers.
“Well-known retail stores have collapsed, sometimes with huge debts owed to local business people and manufacturers for the supply of goods and services. When this happens, it greatly undermines private sector confidence,” Matiang'i said.
He was speaking during the launch of the Manufacturing Priority Agenda 2020 at the Intercontinental Hotel in Nairobi.
He said corporate chiefs were colluding with audit firms to cook their books to give a false financial picture to cover their tracks.
Matiang'i said the deaths of normally solvent enterprises were directly attributable to financial misconduct by some money-grabbing managers and employees.
The conduct by the well-linked top directors is aided by international money laundering, he said.
“It is disgraceful that a supermarket chain that has been operating in the country for years suddenly collapses because some people are moving money out of the country leaving local suppliers high and dry," Matiang'i said.
He said the government will continue deploying international asset recovery tools to trace and confiscate the proceeds of such crimes.
"We will invoke all international instruments available to us through Interpol and collaborative agencies from other governments in defence of the interests of our people.”
The event was organiSed by the Kenya Association of Manufacturers.
Matiang'i asked the manufacturers and the Kenya Private Sector Alliance to liaise with other stakeholders to aggressively combat criminal and unethical business conduct that he said was threatening the survival of the retail sector.
“It has always been a question of government policy, but now we have opened our thoughts in addressing these issues. As we do policing and enforcement, you must also do your part and engage in conversations amongst yourselves about responsible management of businesses in the best interest of our country," Matiang'i said.
edited by p. obuya