HIGHLIGHT: Liberia Has Chosen A ‘Corrupt’ Indian Company, Madras Security Printers, For Its Tax Stamp Program

By PATRICK JARAMOGI

MONROVIA, Liberia|SHIFTMEDIA| Liberia has entered the tax stamp world and will be introducing digital security labels to be placed on alcohol products, tobacco, and non-alcoholic beverages.

The purpose of the program is to protect the country’s revenue by reducing the proliferation of smuggled and counterfeit goods. The tax stamp itself is meant to be a security seal that criminals should not be able to duplicate and therefore defeat the program.

Uganda adopted a similar mechanism last year amidst protests and court battles, while Kenya instituted the safety measures some years back.

But why we dug deep into this matter is the fact that the Liberia Revenue Authority (LRA) has chosen an Indian company, Madras Security Printers, as the supplier of the tax stamps for this program. It is unclear how the LRA came to make this choice or what actual due diligence it undertook to ensure the protection of the Liberian people. Madras is known throughout the world as one of the most corrupt companies in the tax stamp sector, at least according documents that we have obtained.

In Kenya for instance, it emerged that the fake goods emerged in the market in 2018 after investigations proved that the counterfeits that had flooded the market was due to their fake quality stickers.

READ THIS- (https://theinvestigatornews.com/2018/12/fake-goods-in-kenyan-market-blamed-on-fake-mark-of-quality-stickers-supplied-by-indian-firm/)

Revenue authorities such as the LRA generally should undertake a deep compliance review to ensure there are no allegations or charges of criminal behaviour on the part of a supplier. If such a compliance check was done by the LRA, then the following publicly available information would surely have shown up immediately:

• Madras has been accused by the Government of Kenya in 2018 of participating in a scam with various co-conspirators to provide fake tax stamps into a program for which they were suppliers of the actual tax stamps. As a result, fake items such as fertilizer, sugar, and other products passed through into the hands of unsuspecting consumers affixed with the fake stamps, leading to illness and even death.
• The Director of Public Prosecutions in Kenya issued an arrest warrant against nine (9) directors of Madras Security Printers, charging them with collaborating and colluding with counterfeiters to create a parallel system of fake stamps that were applied on counterfeit products.
• The Madras directors have been charged with conspiracy to defraud, breach of trust, abuse of office and cheating. All directors have absconded and refused to appear to face the charges. The Kenyan government put out a press release that international warrants of arrest by way of Interpol Red Notices had to be issued.

Check links regarding the above here below:

Kenya

1. https://upesinews.co.ke/2018/06/22/9-directors-of-madras-security-printers-private-limited-to-be-arrested-over-sub-standard-kebs-mark/
2. https://www.kahawatungu.com/dpp-charge-kebs-officials-attempted-murder/
3. https://www.diplomaticourier.com/posts/kenyas-latest-scandal-reveals-the-bitter-taste-of-corruption

South Sudan

• In South Sudan, Madras Security Printers has been accused of corrupt and collusive behavior in 2020 with regard to their tax stamp program. The company is alleged to have pocketed millions of dollars in a scam that has bankrupted the program that was supported by a loan from the African Development Bank of East Africa.

1. https://www.sudanspost.com/how-south-sudan-awarded-lucrative-duty-paid-stamp-contract-to-corrupt-indian-company/-  Sudan Post (September 01, 2020).

How South Sudan awarded lucrative duty paid stamp contract to corrupt Indian company

• Madras Security Printers has been suspended and blacklisted in India, the very country where they are actually based out of, because of violations in relation to a national ID card program in which they were an early supplier. There are numerous public accounts of illegal conduct by the company in this program, including selling of personal data.

_India—MSP suspension notification (1)

• There have been a number of allegations in other countries, such as Bangladesh and Sri Lanka, where Madras has failed to live up to its contractual obligations or failed to provide the supplies of tax stamps, licenses, or other products that were agreed to.BRTA is going to select the most controversial Indian card company for driving license. BD Press Agency (July 08, 2020).
• https://bdpress.agency/brta-is-going-to-select-the-most-controversial-indian-card-company-for-driving-license/Mismanagement over smart driving licences. The New Nation (September 14, 2020).http://m.thedailynewnation.com/news/263048/mismanagement-over-smart-driving-licences
• Mauritius has withdrawn its accreditation of Madras as a supplier of secure technologies for its banks.
• The extremely poor public reputation of Madras has led a number of other countries, such as the Philippines, to openly question whether they should even be allowed to participate in a national tender.

https://www.gmanetwork.com/news/news/nation/759147/another-smartmatic-imee-questions-reputation-of-nat-l-id-supplier/story/

The widespread notoriety, graft, bribery, and outright corruption of Madras Security Printers are now known throughout the world. There is great concern in many quarters as to whether they should be allowed to provide security products for fiscally sensitive programs such as tax stamps. There is also a growing movement to blacklist this company from future consideration in any national tender until they have been cleared of all charges in Kenya and elsewhere. Government agencies in charge of such programs generally prefer to be careful at the outset rather than be sorry later.

Given the public reputation of Madras Security Printers, it is unclear how they passed even a most basic compliance check or why they were chosen for the Liberian program. In light of the careful way that other countries are conducting their tax stamp programs, the LRA may want to revisit their award decision to Madras and ensure that the people of Liberia are protected for this important program.

There are excellent digital tax stamp solutions that are now available specifically tailored to African markets that could be considered as a safe and secure alternative, and ensure that the trust, safety and finances of Liberian citizens are not placed in the hands of a corrupt foreign company.