BUSINESS

London Distillers Battles Ksh2 Billion Tax Evasion Case

Share
Some of the well-known alcohol brands by London Distillers Kenya (LDK). [Photo/ LDK Ltd]
Some of the well-known alcohol brands by London Distillers Kenya (LDK). [Photo/ LDK Ltd]
Share

London Distillers Kenya (LDK) Ltd. Director Mohan Galot appeared before a Nairobi court on Wednesday, July 21 for a case in which he is accused of orchestrating a tax evasion scheme that saw over Ksh2 billion go unpaid in taxes including excise duty, VAT and corporate tax.

London Distillers is behind popular alcohol brands including Kenya King, Top Secret Whisky, Safari Cane, Old Monk Rum and Napoleon Gold Brandy.

Galot denied a total of 18 counts of omitting key information from tax returns including production volumes and sales amounts, and failure to pay Ksh1.4 billion in taxes.

He was ordered to deposit cash bail of Ksh1 million to secure his release.

According to the prosecution, London Distillers was involved in tax evasion by means of gross underreporting – purchasing 272,989,752 bottles with the finished product volumes produced and omitted using the purchased bottles some 7,941,539 litres, attracting excise duty of Sh1.4 billion. Returns for the years 2016 and 2017 for litres of the locally manufactured spirits are said to have been omitted.

READ>>>>>Liquor Store Crackdowns: KRA Seizes Counterfeit Alcohol Worth Ksh1.4 Million

The distiller was accused of activating 1,610,150 stamps in the EGMS system between January 2018 and December 2018, representing a production equivalent of 527,250 litres, but only declaring and paying taxes on 359,162 litres.

LDK was alleged to have failed to pay taxes totaling to Ksh226 million in 2017, and Ksh814 million in 2018.

The court heard that the accused failed to declare VAT sales worth Ksh3,528,392,928 with a VAT tax implication of Ksh563,542,869 for the years 2015, 2016, 2017 and 2019.

LDK’s head offices are in Nairobi, with its distillery spread over 350 acres of land in Athi River.

It began operations in Kenya in 1985 with Napoleon Gold Brandy as its first brand, and has since expanded its product line to over 25 brands of whisky, brandy, gin, vodka and rum.

READ>>>>>Kenya’s Strongest Beer: Keroche’s 10% Alcohol Lager to Compete With Faxe, Atlas

 

 

Written by
MARTIN SIELE -

Martin K.N Siele is the Content Lead at Business Today. He is also a Quartz contributor and a 2021 Baraza Media Lab-Fringe Graph Data Storytelling Fellow. Passionate about digital media, sports and entertainment, Siele also founded Loud.co.ke

Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Follow Us

Related Articles
Standard Chartered Kenya Airways
BUSINESS

Standard Chartered, Kenya Airways Partner to Enhance Travel for the Rich

Standard Chartered and Kenya Airways (KQ) have signed a strategic partnership designed...

Shri Krishana Overseas Ltd
BUSINESS

Packaging Firm SKL Inches Closer to Listing on NSE

Family businesses have been encouraged to list on the Nairobi Securities Exchange...

Air India KQ-Codeshare (1) (1)
BUSINESS

Kenya Airways, Air India Enter Codeshare Partnership

Kenya Airways, a leading African carrier, and Air India, India’s leading global...

EABL 2025 HALF YEAR FINANCIAL RESULTS
BUSINESS

Strong Shilling Lifts East African Breweries into High Spirits

East African Breweries Plc (EABL) has released its unaudited half-year financial results...