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.
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.