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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