Transsion Holdings, the Chinese-based smartphone manufacturer behind well-known brands like TECNO, Infinix, itel, and smart accessories brand Oraimo, is currently facing serious allegations in Kenya.
The company, which has established itself as a dominant force in Africa’s mobile phone market, has been accused of massive tax evasion, smuggling undocumented Chinese workers, and engaging in severe labor abuses.
Whistleblowers and investigative reports have accused Transsion of fleecing Kenya’s economy for over a decade, evading taxes to the tune of more than Sh400 billion.
These accusations include claims that the firm has been colluding with corrupt officials within the Kenya Revenue Authority (KRA) to facilitate these illegal practices.
Blogger Nyakundi, a vocal whistleblower, reported that Transsion’s affiliates, including TECNO, have been evading taxes on a large scale. He stated, “Insiders tell me we are talking about an excess of Ksh. 400 billion evaded. KRA staff collect what we call a private tax to enable the crimes.” He further alleged that KRA officials had meetings with TECNO’s country manager, Ray Fang, offering protection in exchange for bribes amid the tax evasion scandal.
This revelation has raised serious concerns about the integrity of Kenya’s tax collection system, prompting calls for investigations into the alleged corruption and malpractice.
Despite being a dominant player in Kenya’s mobile phone market, Transsion has notably avoided appearing among the country’s top taxpayers.
Yet, the company reportedly spends between Ksh 3 billion and Ksh 4 billion annually on marketing alone in Kenya.
Additionally, Transsion manufactures devices for local brands such as Safaricom and Jamii Telecommunications Limited (JTL), which raises further questions about its tax contributions given its extensive operations in the country.
There are also allegations that Transsion conducts salary and other financial payments in cash, potentially avoiding standard financial reporting requirements.
Market Dimensions Limited, a human resource services provider for Transsion, has been implicated in the alleged tax evasion scheme, serving as a conduit for these illicit financial activities.
A supplier to Transsion has accused the company of favoring Chinese suppliers over local ones, offering them upfront payments and more flexible timelines.
Kenyan suppliers are often forced to fund projects themselves and endure delays of up to 30 days before receiving payment.
Furthermore, the supplier claimed that TECNO managers frequently demand kickbacks, a practice that has frustrated local businesses and contributed to an environment of corruption within the company.
Labor issues have also plagued Transsion, with reports of significant pay disparities between Chinese and Kenyan employees.
Chinese workers allegedly receive higher wages and better working conditions, sparking accusations of discrimination and illegal labor importation.
Kenyan employees have expressed growing dissatisfaction with their working conditions, and tensions have escalated as harassment and low morale continue to affect the local workforce.
Recently, Kenyan staff sent an urgent email to management threatening industrial action if their demands for better pay and working conditions are not met.
In response to these mounting allegations, Transsion has reportedly taken measures to protect itself from being probed.
The company has increased security, restricted access to its Nairobi offices, and instructed staff to remove or conceal any documents that might be of interest to investigators.
Additionally, some Chinese employees who did not have proper work visas have been sent back to China in an effort to avoid legal trouble.
Despite these serious accusations, Transsion management has yet to issue an official statement addressing the claims.
The company continues to dominate Africa’s smartphone market, controlling 48.2% of the market share three times more than global leader Samsung, which holds just 16%.
These allegations come at a time when other Chinese firms, such as Xiaomi, Vivo, and Oppo, have faced similar accusations in other countries like India.
In a recent report by CNBC, the Indian Ministry of Finance accused these companies of evading tariffs and remitting billions of rupees illegally.
Such practices highlight a troubling pattern of tax evasion by Chinese firms operating internationally.
The spotlight remains on the company’s questionable practices in Kenya, and whether authorities will take decisive action to hold the firm accountable.
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