Keroche Breweries owners charged with tax evasion
Owners of Keroche Breweries Tabitha Karanja and her husband Joseph Karanja have been arraigned Friday morning to answer to up to 10 charges related to tax evasion.
Mrs Karanja spent the night at the Muthaiga Police Station but her husband was released late on Thursday night on the intervention of his doctors.
Karen Hospital asked the Directorate of Criminal Investigations (DCI) to release Mr Karanja citing a serious medical condition they said would worsen if the tycoon spent the night in police custody.
“This is to satisfy that Mr Karanja is in our medical care. He has recently undergone lifesaving surgery,” said the hospital in a statement.
“Keeping him in police custody will greatly endanger his life,” the hospital explained.
Director of Public Prosecutions Noordin Haji on Wednesday ordered their arrest and arraignment to answer to charges of tax fraud committed between January 2015 and June 2019.
Keroche CEO Mrs Karanja has accused the taxman of selective and unfair targeting, arguing that she has always followed the law and was shocked to be accused of tax evasion when the matters were still under a tax tribunal.
“There is nowhere in the world where you can build a business having complied all through and still be subjected to such embarrassment and intimidation,” Mrs Karanja said, protesting her arrest and that of her husband Joseph.
“We are deeply shocked by both the allegations and the manner in which the matter has been handled. My shock is how a local investor can be humiliated, embarrassed and denied well-deserved respect,” said Mrs Karanja.
The duo denied the tax evasion charges in court on Thursday.
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.