Detectives search for Keroche bosses over tax evasion claims

Ms Tabitha Karanja, CEO of Keroche Industries Ltd, and her husband Joseph Karanja, the chairman of Keroche, in a past photo. Wednesday evening, detectives went to the factory in Naivasha and their home in Nairobi to search for them following arrest orders by the DPP. FILE PHOTO | NATION MEDIA GROUP

What you need to know:

  • Mr Haji has ordered the two to be presented in court to answer to 10 counts of tax fraud committed between January 2015 and June 2019.

  • By 7pm detectives were still waiting to enter the brewery’s gates in Naivasha which had been locked at the time they arrived.

Police were Wednesday evening looking for alcohol giant Keroche Industries Ltd owners Tabitha Karanja and her husband Joseph Karanja after Director of Public Prosecutions Noordin Haji ordered their arrest over tax evasion amounting to more than Sh14 billion.

By 7pm detectives were still waiting to enter the brewery’s gates in Naivasha which had been locked at the time they arrived. It was not immediately clear whether the alcohol industry tycoons were at the factory, as another set of detectives was dispatched to their house in Nairobi’s Runda estate.

TAX FRAUD

Mr Haji has ordered the two to be presented in court to answer to 10 counts of tax fraud committed between January 2015 and June 2019.

In a statement released last evening, The DPP said there is sufficient evidence to charge the suspects in court after reviewing an inquiry file presented to his office by the Commissioner-General of Kenya Revenue Authority.

“An audit by the authority established that Keroche Breweries Ltd had evaded the payment of tax totalling to Sh14,451,836,375. Having independently reviewed the file and applying the provisions of the National Prosecution Policy, I am satisfied that there is sufficient evidence and that it is in the public interest to charge the suspects with 10 counts of tax fraud, contrary to section 97 (a) of the Tax Procedures Act, 2015,” he said.

The amount is comprised of unpaid VAT and excise duty for Keroche’s Crescent Vodka, its Viena Ice vodka variants and the popular Summit beer.

The charges on Keroche proprietors come a week after the arrest and prosecution of billionaire Humphrey Kariuki and seven others over tax evasion charges at the Thika-based Africa Spirits Ltd and Wow Beverages Ltd.

Mr Kariuki, in a statement on Monday, claimed that his battles with KRA are being fuelled by jealous people who are hell bent on tarnishing his character and reputation through offences that are strange to him.

“I affirm that I have no outstanding tax dispute with KRA and that I do not manage any company that has a tax dispute with the authority. Therefore, any allegation linking me to tax evasion is false and is made in bad faith,” said the tycoon, who was rearrested by Flying Squad officers after appearing in court to face tax evasion charges.

Founded in 2009 and wholly owned by the Karanja family, Keroche started by making spirits and wines before diversifying into beer. It was the first ever Kenyan-owned company to brew beer which for a long time was the preserve of East African Breweries Limited (EABL).

As a result, Keroche’s Summit Lager and Summit Malt beers have for the past few years competed with products by Diageo’s East African Breweries, which enjoys a commanding lead with it popular Tusker brand.

The company has, however, in the past been engaged in long-running battles with KRA, over Sh1.3 billion backdated tax bills, which issued a shutdown order but the brewer obtained a court order stopping the closure.

In 2017, the Court of Appeal ruled, a decade-long Sh1.1 billion tax battle between the firm and KRA, in favour of the brewer.

The court ruled that the tax bill mainly related to most of the brewer’s products already in the market which Keroche had not factored in this development.

In 2015, when Keroche Breweries was shut down for days for alleged non-compliance on taxation, KRA demanded a backdated duty of about Sh1 billion for the ready to drink Vienna Ice vodka

The matter ended up in court.

Additional reporting by Maggie Wanjiru