Queries raised over foreign Asian apparel exhibitions in Nairobi

A multimillion clandestine business syndicate has emerged where garments traders and top level designers from India are flocking into Kenya to sell and dump untaxed apparels into the market.

The syndicate involves foreign merchants from India who frequently come in droves at short intervals, to sell expensive ready-made Asian garments, jewelry, shoes and other related apparels while disguising themselves as ‘promotion exhibitors’.
Investigations have revealed that in Nairobi alone, the clandestine promotion exhibitions are held in high end malls within Highridge, Parklands, Westlands and Gigiri leafy suburbs.

In some instances, they are organised as Asians traditional and cultural events purportedly to showcase Asian community fashion and lifestyle for various ceremonies such as weddings and religious events like Diwali.

The exhibitions are reportedly organised by crafty Kenyan Asians in cahoots with top notch designers of the said products and merchants, all from India. Kenyan merchants claimed immigration officials were concealing the syndicate by allowing in the foreign competitors on “false documentation”.

They have been going on for the last four years without necessary action by government authorities including Kenya Revenue Authority, Nairobi city county government and the Department of Immigration to stop the illegal trade.

In our investigations early this month, we found an exhibition that was held at a shopping mall in Highridge area. The three-day event dubbed Asia Wedding Lounge Nairobi – 2019 was held at the magnificent Diamond Plaza II between April 5-7 this year.
Unconfirmed reports indicate that foreign Asian merchants enter the country on permits granted to persons coming in to hold promotional exhibition of their products. Instead, they take advantage to sale and dump untaxed apparels in the Kenyan market, effectively killing businesses undertaken by local traders from the Asian community.

“The exhibitions have completely ruined our businesses. Most of us have opted to downsize our operations including reduction of employees just to survive. But some businesses are on the verge of collapsing and they will close down due to the unfair competition,” said one trader who sought anonymity.

Our findings reveal that local Asian merchants dealing in the community apparels now live in a desperate commercial environment where many could be driven out of business, also leading to unemployment.

Their efforts to reach out to relevant government authorities over the last three years have not yielded any fruits, while the growing frequency of foreign exhibitions continues to ravenously eat into their means of the livelihoods.

On January 29, this year, a group of 30 merchants trading in Asian apparels in Nairobi, through their lawyers EN Nderitu and Company Advocates, wrote to the Commissioner General of KRA, Director of Immigration, Nairobi city county government and the ministry of Industry, Trade and Co-operatives, to protest about a planned – Asia Wedding Lounge fashion extravaganza. A month later, however, the exhibition proceeded as earlier planned, without any action being taken to forestall illicit sales.

A spot check on the three-day event that was held on the 12th floor of Diamond Plaza II starting on April 5 confirmed the exhibitors selling their merchandise. It was evident that ETR sales receipts were not issued to the buyers, a clear confirmation of tax evasion by the foreign Indian merchants at the Asia Wedding Lounge exhibition.

Earlier, on 23 August, 2017, the local Asian business community, through their lawyers, Gaita and Company Advocates, wrote to the Office of the Commissioner General of KRA to blow a whistle about the illegal sale of untaxed goods by exhibitors from India.