Govt Bans Japanese Company Over Vehicle Inspection Fraud

Cars at a yard awaiting auction.
An image of imported cars in a yard.

The government has banned a Japanese company, Auto Terminal Japan Limited, which plays a central role in the inspection of motor vehicles for export to Kenya.

Through a Gazette Notice dated Friday, July 1, the Japanese company has been debarred from participating in procurement activities in the country for the next three years.

The exclusion order signed by National Treasury Cabinet Secretary, Ukur Yatani, will run until 2025 when the ban will be reviewed by the government.

Former Treasury Cabinet Secretary Ukur Yatani poses for a photo with the famous budget briefcase outside parliament buildings on Thursday, April 7,2022.
Former Treasury Cabinet Secretary Ukur Yatani poses for a photo with the famous budget briefcase outside parliament buildings on Thursday, April 7,2022.
National Treasury

"It is notified for the general information of the public that in pursuant to the powers conferred on the Cabinet Secretary under regulation 22 (5) (/c) of the Public Procurement and Asset Disposal Regulations, 2020, that—  Auto Terminal Japan Limited has been debarred by the Public Procurement Regulatory Authority from participating in public procurement and asset disposal proceedings on the grounds specified in section 41 of the Public Procurement and Asset Disposal Act, 2015, for a period of three (3) years, with effect from June 2, 2022," Kenya Gazette read in part.

Section 41 of the Public Procurement and Disposal Act states that a firm shall be debarred if it fails to meet certain criteria or contravenes the law. 

The Japanese firm had been blacklisted by Kenya's Public Procurement Regulatory Authority (PPRA) for allegedly giving false information on the units it had inspected. The agency flagged the company for allegedly using forged documents to bid for motor vehicles and spare parts inspection tender.

Kenya Bureau of Standards (KEBS) in 2021 asked the PPRA to start the process of debarment of the company over fraud, with the company moving to court to seek redress with the hope of stopping the order.

The Directorate of Criminal Investigation (DCI) was also roped into the battle after being tasked to get at the bottom of fraud allegations by the company in a bid to win a Ksh1.5 billion tender.

DCI recommended that the officials of the Japanese company be charged in court with forgery.

In 2021, the Tanzanian government terminated the company's contract, opting to inspect used vehicles and spare parts at the port of entry rather than using private firms.

Auto Terminal Japan Limited was registered and established on March 10, 1997. 

"We have been accredited with the Export Vehicle Inspection - Type A Inspection Body approval for pre-shipping inspections of used motor vehicles. We have fine tuned our internal Quality Systems and business functionality to meet the requirements of ISO 17020:2012 General criteria for the operation of various types of bodies performing inspection," the company states on its website.

It offers complete owner operated pre-shipping inspection services for both exporters and importers of used or pre-owned vehicles.

Personal Cars on a haulier truck
Personal Cars on a hauler truck.