The future of Keroche Breweries Ltd, Kenya’s second-largest brewer by market share, hangs in the balance as the court-ordered reopening of its Naivasha plant opens a new battlefront with the Kenya Revenue Authority (KRA).
The High court in the last week ordered the reopening of the company pending the hearing and determination of a case filed by the brewer. Keroche founder Tabitha Karanja had earlier announced that at least 400 employees would be sent on indefinite leave with the plant closed.
The company stated that it feared losing 87,500 litres of beer filtered and ready for packaging, 1.2 million litres in six tanks of beer ready for filtration and packaging, and loss of Ksh350 million if the beer is destroyed. It stated that it would also lose market share, Ksh35 million in monthly salaries and operational costs in addition to accruing interests for loans taken from banks including Absa, Equity, and Family.
However, the Kenya Revenue Authority (KRA) has since moved to the High Court to have the decision by Justice Alfred Mabeya reversed. It had shut down the KRA plant for the second time this year in May, accusing the brewer of failing to honor a tax payment plan signed by the company in March.
“It is the respondent’s view that the case and the Orders sought go contrary to previous orders issued by the same Court and the consent agreements arrived at and signed by the two parties,” KRA argued.
Karanja, however, claims was the agreement was signed under duress. KRA has been locked in a tax row with Keroche for over a decade, and is claiming over Ksh22 billion in unpaid taxes.
Mabeya had also ordered Keroche to, within seven days, pay KRA Ksh8 million as first instalment of tax arrears and thereafter pay a similar amount on the 30th day after such payment until the hearing date. The court further directed KRA to reactivate the exercisable goods management systems (EGMS) and allow the company to carry on with its business.
“The honourable court be pleased to, and hereby, issue orders restraining the respondent (KRA), its officers, associates, partners and those acting through it from closing, interfering with, disrupting the business of the applicant pending the hearing and determination of the application of the inter parties,” read the court order.