Iran slams Kenya over stalled KSh2.6 billion tea fraud probe

Iran has sharply criticised Kenya for failing to hold accountable the officials and traders it says are responsible for a fraudulent tea export deal worth KSh2.6 billion (USD 20 million), warning that Nairobi inaction is the principal obstacle to restoring a trade relationship that once supplied Iran with millions of kilograms of Kenyan tea annually.

In an interview with the Nairobi-based Nation newspaper, Iran Ambassador to Kenya Ali Gholampour said Tehran had already prosecuted and punished those on its side implicated in the scandal — including sitting ministers and a company president who received decades-long prison sentences — and urged Nairobi to demonstrate comparable resolve.

“In Iran, those involved in the fraudulent scheme have already been tried and punished by the courts, with senior officials and the mastermind receiving lengthy prison sentences and orders to repay billions of dollars to the State. Among them are ministers, CEOs, and private individuals.”
— Ambassador Ali Gholampour, Iranian Embassy, Nairobi

The dispute traces back to 2023, when an Iranian trade ban on Kenyan tea imports abruptly closed one of East Africa most significant agricultural export markets. The ban came after Iranian authorities uncovered a scheme in which Kenyan exporter Cup of Joe and Iranian firm Debsh supplied low-grade tea to Iran while representing it as premium-quality Kenyan leaf.

A scandal built on systematic deception

The case centres on Cup of Joe, a Kenyan tea exporter, which secured a USD 20 million contract with Iranian firm Debsh for the supply of premium Kenyan tea. Iranian prosecutors later found that the consignment consisted of low-grade tea imported into Kenya from elsewhere, blended domestically, and re-exported to Iran under a premium label.

The scale of the alleged financial misconduct dwarfed the initial contract value. Iranian prosecutors found that Debsh had drawn USD 3.37 billion (KSh434.7 billion) from state foreign exchange reserves at subsidised rates — ostensibly to import tea and industrial machinery — but instead diverted the funds, purchased cheaper low-quality Kenyan tea, and imported no equipment at all.

Court records in Tehran described the operation as involving “systematic deception, currency manipulation, and smuggling,” leading to what Iranian officials called one of the country most significant trade fraud prosecutions in recent memory.

Former Trade Minister Reza Fatemi-Amin was sentenced to one year in prison. Former Agriculture Minister Javad Sadatinejad received a two-year term. Debsh president Akbar Rahimi-Darabad received the heaviest punishment: a 66-year sentence and an order to repay USD 2.38 billion (KSh307 billion) to the Iranian state.

Kenya response: licences revoked, but no prosecutions yet

Kenya regulatory response has been more administrative than judicial. The Tea Board of Kenya deregistered Cup of Joe, and government authorities revoked the company operating licence. While Kenya Directorate of Criminal Investigations completed a probe into the matter, its findings have not been made public, and no individuals have been charged.

Cup of Joe director Kamau Kiminda has consistently denied wrongdoing. In a previous interview with Nation, he said his company fulfilled its contractual obligations by supplying the tea quantities agreed upon with Debsh, and argued it bore no responsibility for what the Iranian firm subsequently did with the shipment.

“We were contracted by Debsh to source tea, which we did in line with our clients’ instructions. What Debsh did with the consignment after delivery could not be attributed to Cup of Joe.”
— Kamau Kiminda, Director, Cup of Joe

Ambassador Gholampour acknowledged the denial but stressed that Kenya cooperation in advancing the investigation is now essential — not just for justice, but for the commercial interests of both countries.

Farmers pay the price while diplomats negotiate

While governments exchange diplomatic notes, the consequences of the trade ban have fallen most heavily on Kenya tea farming communities. Iran had ranked among Kenya top 10 tea export destinations, purchasing 13 million kilograms worth KSh4.26 billion in 2024 alone, according to data from the Tea Board of Kenya.

The sudden closure of that market has reverberated across 19 tea-growing counties, where more than 750,000 smallholder farmers depend on the crop for their income. The sector supports the livelihoods of approximately 6.5 million people when processing workers, transporters, and support industries are included.

Despite the ban, Ambassador Gholampour was at pains to emphasise that Iranian consumer demand for Kenyan tea has not diminished. He described a resumption of trade as a “win-win” outcome, saying Iran regains access to the high-quality tea its consumers prefer, while Kenya re-enters a lucrative and culturally significant market.

“The quality is exceptional, demand remains strong, and Iranians love Kenyan tea. But accountability must come first.”
— Ambassador Ali Gholampour

A bilateral committee established in August 2024 during the seventh session of the Kenya-Iran Joint Commission for Cooperation has been tasked with developing a roadmap for resuming tea exports. Negotiations are described by both sides as ongoing.

Broader bilateral ambitions hinge on resolving the impasse

The tea dispute is unfolding against the backdrop of what both governments describe as an ambitious agenda to expand bilateral ties significantly. Bilateral trade has grown from approximately USD 50 million to roughly USD 200 million in recent years, with Kenya running a surplus driven largely by agricultural exports, particularly tea. The two nations have set a target of USD 1 billion in annual trade within the next decade.

Ambassador Gholampour said the two countries are exploring cooperation across sectors including agriculture, industrial machinery, fertiliser, health, energy, and logistics. He also cited plans for university-level academic exchanges, including reciprocal professorships and student scholarships.

“We want to see practical academic exchanges, including Kenyan professors coming to Iran and Iranian professors coming to Nairobi, alongside student exchanges and scholarships, so that cooperation goes beyond trade and builds lasting institutional links.”
— Ambassador Ali Gholampour

The most recent meeting of the Joint Cooperation Commission, held in Nairobi in August 2025, produced nine memoranda of understanding and a cooperation roadmap covering agriculture, industry, health, and energy.

Structural obstacles remain. International sanctions on Iran, restricted banking access, and the absence of direct flights between Nairobi and Tehran continue to add friction and cost to commercial exchanges between the two countries.

Kenya views Iran as a vast consumer market with a deep-rooted tea-drinking culture, while Tehran sees Kenya as a strategic entry point into East Africa and a partner for regional trade corridors. Ambassador Gholampour said the immediate test of that relationship is whether both governments can generate enough political will to resolve the fraud dispute and move forward.