Sh17 billion tax claim on business tycoon halted

Businessman Humphrey Kariuki/ NMG

The High Court has acquitted alcohol tycoon Humphrey Kariuki and four others from criminal charges of tax evasion and being in possession of un-customed Sh7.4 million ethanol.

The decision was made after the police drafted a charge sheet against the five which is contrary to their mandate as investigators. 

Justice Anthony Mrima said although the police, the Ethics and Anti-Corruption Commission (EACC), and Kenya Revenue Authority have the mandate to investigate crimes, the agencies cannot draft, sign or present any charge sheets in any criminal prosecution.

Kariuki had been charged together with directors of Wines of the World (WOW) and African Spirits, including Peter Njenga, Robert Thinji Mureithi, Eric Mulwa Nzomba and Kefa Gakure. 

The five businessmen faced a charge of being in possession of uncustomed goods- 80 drums of 250 litres each of ethanol valued at Sh7,402,958- without paying tax. 

They were also charged with omitting from the VAT returns of Africa Spirits Sh2.1 billion and Sh5.9 billion from the excise returns.

Humphrey Kariuki and his partners were as a result charged with Sh17 billion tax evasion. 

Through his lawyer, Cecil Miller, Kariuki and his co-accused argued that the case seeking to recover Sh17 billion from them was malicious, unconstitutional and without any legal backing because the tax assessment issued to the African Spirits after a comprehensive audit was Sh1 billion.

They argued that their right to privacy was violated when the police and officers from a multi-agency team raided his premises in Thika without search warrants.

Miller further argued that a charge sheet originating from the police instead of the DPP was illegal. In the matter, the charge sheet was signed by the officer in charge of Muthaiga Police Station.

Additionally, justice Mrima further quashed a gazette notice by the Director of Public Prosecutions, Noordin Haji, appointing prosecutors from the KRA to handle the case.

“Drawing the above finding to the impugned provision, it means that whereas KRA can investigate any offences relating to tax laws, it cannot prosecute such offences in court,” the judge said.

The judge said the decision to abdicate the powers to prosecute to the KRA amounted to usurping the role of the DPP and was therefore illegal.

He said the DPP willingly and unconstitutionally abrogated his mandate by appointing three KRA officers to handle the case.

The DPP defended his decision to prefer charges, stating that the charge sheet was taken to him by the police upon multi-agency investigations, which he reviewed.

Justice Mrima said in the decision that investigations and prosecutions cannot be conducted by the same entity.

“It goes without saying, therefore, that the National Police Service cannot come up with the final charges which a suspect is to answer to before court. That is within the purview of the prosecutor. As such, the National Police Service can neither draft any charge sheet nor sign any such charge sheet,” the judge said.

Justice Mrima ruled that the case ‘lacks any legal leg to stand on’ since the decision to charge was made by the police, who was the investigator.

In February 2019, KRA and officials from the Directorate of Criminal Investigations (DCI) raided Kariuki’s factory in Thika, shut it down and obtained court orders that froze the firm’s bank accounts over tax evasion claims.

This was after the taxman obtained orders freezing 11 accounts associated with Kariuki over alleged tax evasion. 

Over the past few years Kariuki’s alcohol manufacturer Africa Spirits Limited (ASL), has been embattled in continuous legal discourse with the state over suspected illicit cash flows, and tax evasion among other charges. 

ASL has listed the companies whose accounts are being pursued by the Directorate of Criminal Investigations as Wow Beverages, Dalbit Petroleum Limited, Rhine Hart Limited, Section Investments Limited, Janus Continental Group Limited, Belgravia Construction Limited, Azalea Holdings Limited, Kisima Management Company Limited.

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on whatsapp
WhatsApp
Share on telegram
Telegram
Share on email
Email

YOU MAY LIKE THESE POSTS

How economic life is set to change.

Latest Jobs and Events

Kituo cha Sheria is Hiring a Legal Officer
Insurance Law: The Regulator, The Players & The Assured Persons: A Melting Pot?

Social Plugin

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on whatsapp
WhatsApp
Share on telegram
Telegram
Share on email
Email

Popular Features

Subscribe

Sh17 billion tax claim on business tycoon halted

Share Article :

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
Share on whatsapp

COLUMNISTS

Nasra Nanda

Nasra Nanda

Nasra Nanda is a Senior Associate in Dentons Hamilton Harrison and Matthews, a leading law firm in Kenya.

Gregor Pannike

Gregor Pannike

Gregor Pannike is the founder and managing director of Agema Analysts.

Liz Lenjo

Liz Lenjo

Liz Lenjo is the Founder and Managing Consultant of MyIP Legal Studio.

Angela Kioi

Angela Kioi

Angela Kioi is a legal compliance expert, negotiator and ADR practitioner.

MOST VIEWED

SUBSCRIBE TO CORPORATE JUROR

Get all latest content delivered to your email a few times a month.