Kenya’s second-hand clothing (mitumba) sector is facing renewed scrutiny following allegations that foreign-controlled entities are using Kenyan-registered companies as fronts to illegally repatriate profits abroad, potentially violating trade, tax, and ownership regulations while exposing local directors to significant financial and legal risk.
Operating under the guise of “Beauty Mitumba”—a banner that evokes images of legitimate, homegrown enterprise—profits generated by companies ostensibly owned by Kenyans are reportedly being transferred abroad to firms controlled by Chinese national Ruiying Wang, according to sources familiar with the operations.
The mitumba trade, a cornerstone of Kenya’s informal economy, employs millions and generates billions in revenue. Reserved by policy for local entrepreneurs, the sector is intended to empower small traders and protect against foreign dominance.
However, this investigation reveals how a network of seemingly Kenyan-owned companies may be serving as conduits for illicit financial flows, leaving local directors exposed while the alleged true controllers reap the rewards offshore.
The Facade of Local Ownership
At first glance, companies such as Beauty Mitumba appear to exemplify Kenyan entrepreneurship. Run by locals with familiar faces, they import bales of used clothing, distribute them through bustling markets in Nairobi and other major towns, and generate profits on thin margins. However, insiders allege that these entities are merely fronts, with strategic decision-making and financial control exercised by foreign interests.
“Beauty Mitumba” is reportedly not just a brand but a stylised operating banner under which the businesses function, masking the true flow of funds. Sources claim that while the companies are legally registered under Kenyan nationals—often low-level employees or proxies with limited authority—profits are systematically diverted.
Through bank transfers, intermediaries, and complex accounting structures, earnings are allegedly channelled to overseas accounts linked to Wang’s network.
The Profit Pipeline Abroad
The alleged financial transfers are described as discreet yet effective. Revenue from high-volume sales in markets such as Gikomba is collected through both cash and digital payment systems. Instead of being reinvested locally or distributed to Kenyan stakeholders, a portion of the funds is reportedly siphoned abroad.
Methods cited include over-invoicing imports from Chinese suppliers, under-declaring sales to the Kenya Revenue Authority (KRA), and using personal or third-party accounts to obscure transaction trails. Industry observers estimate that tens of millions of shillings—potentially escalating to billions across the network—could be moved out of Kenya annually.
The funds are alleged to end up in companies linked to Ruiying Wang, who is associated with several import-export firms in China and other jurisdictions. These entities reportedly supply the mitumba bales, creating a closed-loop system in which profits generated in Kenya subsidise foreign expansion.
“Why list Kenyans as owners if not to circumvent restrictions?” asked one trader in the sector who requested anonymity. “The profits should remain in Kenya to build our economy, not disappear into foreign accounts.”
Exploitation of Locals and Regulatory Gaps
The human cost of the alleged scheme is significant. Kenyan directors, often enticed with promises of steady income or small ownership stakes, reportedly find themselves legally liable when compliance failures emerge. As scrutiny from the KRA increases—particularly over missing electronic tax registers or undeclared income—some companies are allegedly abandoned, leaving local directors facing frozen assets, tax arrears, and damaged credit profiles.
Compounding these challenges, the company is reportedly facing multiple legal disputes, including allegations of underpaying local workers, harassment of employees, and violations of labour laws. One individual, who declined to be named, is said to have suffered an accident during working hours and was subsequently discarded by the operation, despite being listed as a company director.
According to sources, the individual has received several demand letters related to tax and compliance obligations, while the alleged beneficial owners have refused to compensate her for the use of her name and company as a front. She has reportedly faced continued harassment and intimidation despite repeated requests from her representatives for the conduct to cease.
Sector-Wide Implications
Economic analysts warn that such practices, if proven, undermine regulatory frameworks designed to protect local enterprise and exacerbate Kenya’s capital flight problem. Illicit outflows deprive the country of critical resources needed for development, deepen inequality, and suppress local business growth.
The Mitumba Consortium Association of Kenya (MCAK) has repeatedly called for stricter enforcement to safeguard the trade for local participants. “Foreign infiltration through proxies defeats the purpose of existing policies,” said an MCAK representative who requested anonymity.
“Transparency in ownership and financial flows is essential to protect Kenyan traders.
In a recent statement, the association indicated it plans to petition the government to deport any foreign nationals found to be conducting mitumba business illegally. MCAK Chairperson Teresia Wairimu Njenga has emphasised the need to enforce existing laws to protect Kenyan livelihoods.
Silence from the Accused
Attempts by this publication to reach Ruiying Wang and representatives of the implicated companies for comment were unsuccessful. Requests for clarification regarding ownership structures, financial records, and cross-border transfers went unanswered.
As Kenya continues to balance foreign investment with local economic empowerment, the allegations surrounding Beauty Mitumba highlight critical vulnerabilities within the system.
Authorities, including the KRA and the Ministry of Trade, have been urged to investigate the claims to safeguard the mitumba sector—a lifeline for millions—and ensure that profits generated in Kenya benefit the economy and communities on the ground.