Keroche blames rivals for its woes

Keroche Breweries Chief executive Ms. Tabitha Karanja has termed claims linking her company to a Sh14 billion tax fraud as mere witch-hunt by her competitors aimed at tainting the firm’s image.

In a telephone interview with a local TV station last night, Ms. Karanja said she had not been served with formal papers and had not been reached out to directly by investigators who on Wednesday, led by the Director of Public Prosecution Noordin Haji said had enough evidence linking her and her husband Joseph Karanja Muigai who are both directors of Keroche and the company itself to 10 counts of tax fraud contrary to section 97 (a) and (c) of the tax procedures act, 2015.

Mid this month, Kenya Revenue Authority disclosed that it is targeting 600 individuals this year in the war against tax evasion. The Authority revealed that it prosecuted 222 individuals last year but the figure will go up in 2019 in a step that is also targeting to help the taxman boost its revenue collection.

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.

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.

Source: Multiple Agencies