, NAIROBI, Kenya, Mar 8 – Billionaire business tycoon Humphrey Kariuki cannot access his 11 bank accounts operating under three companies, after the High Court extended a preservation order.
Justice John Onyiego of the Anti-Corruption Division said until a case filed by the Kenya Revenue Authority (KRA) is heard, Kariuki will have no access to his bank accounts.
The judge told parties that matter before him is best suited to be heard in the Commercial Division of the High Court.
The application filed by KRA seeks to assess tax withheld by the businessman.
The judge consequently ordered the file be placed before the presiding judge in the Commercial Division on March 12 for directions.
Kariuki has since filed an application to set aside the orders obtained by KRA.
KRA obtained preservation orders restraining and prohibiting the transfer of funds in the eleven bank accounts under African Spirits Limited (ASL) which is one of the largest alcohol manufacturing plants in East Africa.
ASL produces Glen Rock, Legend Black, Blue Moon, and Legend brandy among others.
The court has also preserved the funds of Vow Beverages Limited, pending the hearing and determination of the application.
The court preserved the monies which are held at National Bank of Kenya, Family Bank Limited, Equity Bank Limited, Credit Bank Limited, and KCB Bank Limited.
According to documents filed in court, the companies have been supplying excisable goods with counterfeit excise stamps hence evading payments of taxes.
The taxman said that the companies have been carrying out business fraudulently denying the agency collection of colossal amounts of taxes.
They claim that preliminary investigations conducted so far indicate Kariuki through his companies has evaded tax of up to Sh3 billion and investigations are still ongoing.
“If the funds in the accounts of the respondents are not preserved then its highly likely that the respondents (Wow Beverages Limited and Wines of the World Limited) may frustrate the recovery of the taxes demanded by the Commissioner of Tax by withdrawing the money, transferring or putting it out of reach by KRA,” the agency said.
While seeking the orders the court was informed that that on February 11, 2019 KRA gave a notice of preservation of funds into several of the respondent’s bankers in accordance with section 43 of the Tax Procedures Act which notices expired on February 22, 2019 hence the need to approach the court under urgency to issue a fresh preservation order.
“From my analysis and initial investigations undertaken, it is estimated that the respondents have evaded taxes of up to Sh3 billion which amount the applicant intends to demand,” said the commission.
The agency told the court that Kariuki’s companies Wow Beverages Limited and Wines of the World Limited have engaged on the manufacture and supply of the alcoholic beverages in a way in which it has failed to account for the manufacture of its excisable product for purposes of excise duty and to further evade payments of taxes.
“KRA has discovered that the respondents have been making supplies of alcoholic beverages affixed with counterfeit excise stamps hence denying the agency colossal amounts of revenues,” read the court papers.
“KRA has credible information that the companies have huge deposits in bank accounts and is fearful that the companies will dissipate the funds if orders for preservation are not granted by withdrawing the money, transferring or put it out of reach of the agency,” KRA said in the documents.
The tax agency said the companies have receipt of income in respect of which no taxes have been charged and the agency intends to assess the income and issue tax assessment.
KRA informed the court that other than the interests in several companies, there are no known assets in the name of respondents (Kariuki and his companies) which may be used to recover the taxes once the assessments have been finalized.
The tax man says that Investigations revealed that the two companies have not been paying taxes as required taking into account the level of production of ethyl alcoholic spirits and counterfeit excuse stamps.
The agency said they have for many years been experiencing challenges in effectively assessing, collecting and accounting for all tax revenues due to various acts of omission and vices perpetrated by some taxpayers which result in incorrect and lower tax declarations with resultant loss of substantial government revenue.