Kenya: Kebs on the Spot Over Fake 'Quality' Stickers

11 December 2018

The proliferation of fake goods in the Kenyan market has been blamed on fake mark-of-quality stickers supplied by an Indian firm in collusion with senior Kenya Bureau of Standards (Kebs) officials.

The Director of Public Prosecutions (DPP) says investigations have established that the directors of Madras Security Printers Private Ltd conspired with Kebs officials to defeat the intent of the contract for the supply of Impact Standardisation Mark (ISM) stamps for Sh882 million.

"Investigations have established that the award of the contract to Madras Security Printers Private Ltd was marred with irregularities and illegalities," the DPP says in court papers.

A probe by the Directorate of Criminal Investigations (DCI) found that the Kebs ISM stickers supplied by the Indian firm did not have a traceability system.

They are also not tamper-proof as required by the contract -- they are made using ordinary adhesive papers.

COUNTERFEITS

The stickers can easily be duplicated by the owners of counterfeit products, thus creating a loophole to saturate the market with substandard goods.

"Due to failure to comply with the terms of the contract, sub-standard goods have been recovered from the market and individuals subsequently charged with possession of counterfeit Kebs ISM stickers," says the DPP.

The new stamps were supposed to fully contain entry of counterfeit and illicit goods that have caused the country to lose an estimated Sh100 billion annually.

It was intended that they would be traceable to Kebs, with the number of stamps issued strictly controlled by the standards body.

Further, the stamps were to be printed to certain international approved security specifications -- be tamper-proof and not be duplicatable or easily photocopied. They were equally supposed to be easily distinguishable by the general public by use of the Kebs ISM scanner, a mobile phone application.

PHOTOCOPIED

While the scanner could easily read the details of a product, the importer, the Certificate of Conformity (COC) number, the country of origin and other relevant information, that data was not expected to be read from a duplicate, a photocopy or a counterfeit of the ISM stamp.

However, the stamps supplied were substandard and could easily be duplicated, photocopied and still retain the security features on the copy that were readable by Kebs scanners.

The DPP has filed the response in an application filed by Madras directors. They are seeking to stop their prosecution in a magistrate's court, where they are facing charges of conspiracy to defraud and cheating.

Through their lawyer, they are arguing that the contract that forms the basis of the criminal charges has never been set aside or challenged in any way by any of the contracting parties.

PROSECUTE

"It is thus a valid contract whose legality or validity has not been contested in any court of law," the directors say in court papers.

The firm's directors include Prathap Singh, Arul Prathan Singh, Sam Prasad, Asir Prathan Singh, Suseela Rajah, Ponmani Prasad, Ramachadran Nataarajan and Rajah Sunder Singh.

The DPP has, however, maintained that the decision to prosecute them "was based on the fact that there was sufficient evidence," adding the criminal case should be allowed to proceed "to its logical conclusion".

The DPP is urging the court not to grant the directors a hearing until they fly back to Kenya and submit themselves to the court's jurisdiction.

Some 17 people are supposed to face charges, including Kebs officials and Madras directors. Former Kebs MD Charles Ongwae and others have already been charged.

SPECIFICATIONS

Former Kebs chairman Milton Mugambi Imanyara said the Kenyan public on whose behalf the ISM stamps were procured had a legitimate expectation that the stamps would meet contract specifications.

"It is against this expectation that a sum of Sh882 million was paid by Kebs to Madras Security Printers Private Ltd. Kenyans are entitled to justice in this matter, and it is only fair and just that the firm's directors be tried as charged. There is no allegation that the trial court will not be objective," Mr Imanyara says in court papers.

He served in that capacity between January and July 2018. The case will be heard on December 14.

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