Billionaire Kariuki Blocked From Making Bank Transactions

by Mahakamani News

Billionaire Humphrey Kariuki’s troubles seemed to deepen after the High Court issued preservation orders restraining him from withdrawing or transferring monies held in his 11 banks accounts under three companies.

Justice John Onyiego issued orders after Kenya Revenue Authority(KRA) filed an application seeking orders to preserve funds in the bank accounts under the names of Vow Beverages Limited, Wines of The World Limited and African Spirits Limited as they complete investigations over the alleged Sh 3 billion tax evasion.

“An order is hereby issued preserving funds and prohibiting the transfer, withdrawal or disposal of or other dealing involving the funds pending hearing and determination,” ordered the judge.

KRA obtained preservation orders restraining and prohibiting the transfer of funds in the seven bank accounts including The world and 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.

Other companies which the court has preserved its funds are Vow Beverages Limited, Wines 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 exercise stamps hence evading payments of taxes.

The Taxman said that the companies have in the cause of carrying out its business fraudulently denied the the agency collection of colossal amounts of taxes which they intends to demand.

They claim that preliminary investigations conducted so far indicate Kariuki and through Companies has evaded tax of up to Sh 3 billion and investigation 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,” 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 preservation order.

“From my analysis and initial investigations undertaken, it is estimated that the respondents has evaded taxes of up to Sh 3 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 has been making supplies of alcoholic beverages affixed with counterfeit excise stamps hence denying the agency colossal amounts of revenues,” reads the court papers.

The Tax man further claims that the companies has been using uncustomed ethanol in its manufacturing ethyl spirits hence failing to accounts to the commissioner on the correct amount of ethanol used in its production thus leading to an under estimation of excise payable to the agency.

The court was informed that KRA intends to carry out further investigations into the companies tax evasion scheme, demand total taxes payable and if the respondents are liable to possible prosecution for it said acts.

” KRA has credible information that the companies have huge deposits in its 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)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 results in incorrect and lower tax declarations with resultant loss of substantial government revenue.

KRA say that they are still investigating the companies as they believe their affairs are still ongoing in which they could unearthed more information with regard to evasion of taxes by Kariuki.

According to the supporting affidavit by Dominic Keng’ara, the agency said that Africa Spirits Limited has accumulated substantial deposits in its bank accounts at National Bank of Kenya, Family Bank Limited, Equity Bank, Credit Bank and Kenya Commercial Bank.

According to a letter dated February 11, 2019 by Dominic Kenga’ra for commissioner investigation and enforcement addressed to the head of legal Family Bank , KRA gave notice to the bank to preserve the funds in the Africa Spirits Limited bank accounts.

“You are hereby given notice to preserve funds of the following accounts for ten working days from the time of receipt of this notice,” stated the letter.

The letter further state that, “Africa Spirits Limited account number …. and all other fixed , current, saving , call and loan accounts held in the name of or linked to the above named person or entity,”.

The agency also sent a similar letter to the head of legal at Kenya Commercial Bank directing him or her to preserve funds in the Vow Beverages Limited, Africa Spirits Limited and Wines of the World Limited accounts.

KRA said on January 31 a muilti-Agency team lead by Director of Criminal Investigation George Kinoti visited the company premises in Thika town and unearthed alcoholic drinks which has been affixed with exercise stamps which could not be verified as having been issued by the agency.

A cache of counterfeit excise stamps were discovered at the premises.

Court directed Kenya Revenue Authority to serve Africa Spirits Limited, Vow Beverages Limited and Wines of the World Limited.

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