Bidco In Court Over Sh5b Tax Evasion As UN Probes Land Grabbing Allegations In Uganda.



Bidco Africa has been sued for colluding with KRA and the Attorney General to deny the exchequer Sh. 5.7 Billion in what is described as defeating public interest in recovering the money.

In an application filed before Justice Isaac Lenaola, activist Okiya Omtatah Okoiti said the taxman failed to collect money that would uplift living standards.

Omtatah has also accused Bidco Africa Chief Executive Officer Vimal Shah of ensuring that the company does not pay taxes over the years.

In the civil suit filed at the High Court in Nairobi, Trans Nzoia Senator Henry ole Ndiema is alleged to have broken the law when he exempted Bidco Africa from paying taxes when he served as a civil servant in the Ministry of Finance in the 1990s.

Omtatah is relying on a whistle-blower’s report that alleges Bidco has survived by not paying its rightful share of taxes since then. He is also depending on a High Court decision of 2012 that allowed KRA to collect tax arrears and other fees amounting to Sh1.3 billion from Bidco Africa.

“The overdue tax (from the High Court decision), plus the interest and penalties remains uncollected to date in circumstances that point to collusion to evade tax, involving Bidco Africa, Mr Vimal Shah and KRA,” says Mr Omtatah in his affidavit, referring to the 2012 decision by Justice David Majanja.

“The whistle blower’s report shows that as at December 31, 2015, Bidco Africa’s total tax exposure on the unpaid duty (including VAT) was some Sh4,394,779,047.00. In the circumstances, the tax owed is some Sh5.7 billion,” says Mr Omatatah.

According to the suit papers, the report shows that the company is accused of having made incorrect statements and falsified records of accounts, hence lowering its tax dues.

The petition states the firm avoided paying duty on imported high-density polyethylene, multiplier film for packaging, and refined, bleached and deodorised palm oil between 1992 and 1998.

Senator Ndiema is accused of having conspired with Mr Shah on September 26, 1995 to irregularly approve a customs exemption form for Bidco Africa after the Permanent Secretary Ministry of Finance had 14 days earlier declined to grant any duty remission to the company.

“He is sued herein pursuant to Article 226(5) of the Constitution and statutes which hold public officials personally liable for the loss of public assets,” Mr Omtatah added.

Vimal Shah is prominent in Kenya’s business circles. In June last year, President Uhuru Kenyatta appointed him to be Chancellor of Jaramogi Oginga Odinga University of Science and Technology for a period of five years.

Bidco Oil Refinery Ltd is one of the leading manufacturers and marketers of cooking oil, fats and soaps in Kenya. That puts it under scrutiny, especially by Kenya Revenue Authority (KRA).

Justice Isaac Lenaola directed the respondents to file their response before July 11 when the case will be mentioned for directions on submissions.

Meanwhile, The United Nation is this week expected to release a report of a probe into Bidco’s alleged business malpractices in Uganda.

The UN Development Programme (UNDP) last month started probing Bidco over allegations of land grabbing, environmental degradation, tax evasion and poor labour relations in Uganda. It promised to release a preliminary report in the week after June 18 as the Kenyan-based firm continues to defend its business practices.

Bidco is accused of destroying forests to make way for palm oil plantations, including 100 hectares of the protected Gala forest reserve in Bugala, Kalangala. Residents of Kalangala say they were not fairly compensated for loss of their livelihood after they ceded land for the Bidco palm oil project. Some farmers claim they were coerced into signing for the money.

The Uganda petition cites Bidco’s failure to comply with court orders to compensate farmers for their land.
The World Bank withdrew from the project following disputes and amid concerns it was not complying with the bank’s forestry policies. Bidco CEO Vimal Shah maintains the claims are a smear campaign by activists aimed at disrupting the business.

“To be clear, UNDP is not giving Bidco financial support, we are only investigating it because of its alliance in the Business call for Action project, which is headed by UNDP,” says Anne Perrault, a UN compliance official.
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