The Daily Nation newspaper said Kenyan police believed the gang were "preparing to raid the country's communication systems" and that they possessed equipment capable of infiltrating bank accounts, Kenya's M-Pesa mobile banking system and ATM machines.
It said 77 Chinese nationals have been charged in connection with the illegal activities. The raids were sparked after police began investigating a house fire that left one person dead.
According to the Standard newspaper, the Chinese nationals were living in "military-style dormitories", and that China's ambassador to Kenya has been summoned to "explain if his government was aware of the group's activities".
The Standard newspaper said preliminary investigations have shown the group were making microchips for ATM cards, and that they also "ran a command centre whose activities are yet to be established".
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