The Kenyan government has shut operations of leading alcohol manufacturer and importer- Africa Spirit Limited, over tax evasion and smuggling of ethanol from Tanzania.
This comes as a team of investigators from the Kenya Revenue Authority (KRA) and the Directorate of Criminal Investigations (DCI) continue with investigations into the activities of the Thika based firm, after large consignments of counterfeit excise stamps and suspected illicit ethanol were found within their premises.
On the night of January 31, 2019, an estimated 21 million counterfeit excise stamps and 312,000 litres of illicit products valued at Ksh1.2 billion (US$11.9 million)in estimated tax were seized.
The firm’s factory has been sealed to enable in-depth investigations into the racket, KRA has said.
Africa Spirits is a licensed manufacturer of portable spirits including Glen Rock, Legend Black, Blue Moon, Legend Brandy, Gypsy King and Furaha.
Through its subsidiary Wines of the World Beverages (WOW Beverages), the firm also imports and distributes global brands of wines and premium whisky from the US and Europe.
WOW Beverages is a leading beverages marketing company in East Africa. It represents two major International Spirits companies. Additionally, it carries wines from eight wine producing countries as well as specialist beers and fine dining waters.
Some of the international spirits in its portfolio include Famous Grouse, Bacardi and Martini among many others. Wines Malbec from Argentina, Waterford from South Africa, Gato Negro from Chile and Tommasi from Italy.
“A Production Manager at the factory was arraigned in court and detained for seven days to facilitate further investigation. The Directors of the Company and other senior management are being sought,” KRA said in a statement.
“This operation is part of the Government ongoing campaign against illicit trade aimed at ensuring compliance with tax and consumer protection laws,” the taxman affirmed.
According to KRA commissioner of intelligence and strategic operations Githii Mburu, the company has been evading monthly tax remittances of Sh3 billion (US$ 29 million).
The firm is also linked to smuggling of ethanol, the main ingredient in alcohol making, where the government loses about Ksh4 million (US$ 39,879) for every 20,000 litres smuggled into the market.
The firm, associated with Kenyan tycoon Humphrey Kariuki is said to have been smuggling ethanol from neighbouring Tanzania.
The Kenya government is investigating the ethanol import market where it will be conducting a chemical analysis along the chain.
This is expected to further unravel possible quality breaches which could have had a negative impact on consumers.
The company’s operations were previously based along Mombasa Road in Nairobi before they moved to neighbouring industrial town of Thika, about 50 kilometres from the capital.
The move was to increase the manufacturing capacity as the firm ventured into large scale production 2014.
Police are also after the billionaire who could be arraigned in court for offences linked to his company, mainly massive tax evasion.
The Inspector General of Police Joseph Boinnet says the plant could have been making fake products, which may have affected the health of thousands in the country.