Nakuru County slaps Keroche Breweries with Sh9.3m bill for adverts

Woes facing the Naivasha-based alcoholic beverages manufacturer Keroche Breweries have deepened.
Months after a former manager Sam Shollei sued the firm seeking Sh45 million, over unfair dismissal, the Nakuru County government has written to the firm, owned by Senator Tabitha Karanja, demanding Sh9.3 million, arrears for advertisement, liquor licence for the years 2021, 2022 and 2023.

"Reference is hereby made to an earlier correspondence dated October 23, 2023, from Collection Africa Limited, a debt collection agent authorised by the County Government of Nakuru, seeking payment of outstanding arrears of Sh9.3million," reads part of the letter seen by the Nation, signed by Charles Lwanga, the County Receiver of Revenue.

"This is, therefore, a formal demand for payment of the Sh9.3 million arrears, for advertisement, liquor license for years 2021,2022,2023 in Nakuru County," further reads the correspondence.
The arrears, according to the letter are for liquor, food hygiene, single business permit, advertisement, fire inspection and penalties that have accumulated for three years.

Read: Court orders arrest of Keroche founder in Sh14bn tax evasion case
The firm is required to pay the amount within 14 days.
This now adds to the woes that have been facing the firm in the recent past.
The company has been fighting against the auctioning of its property, over the Sh45 million debt and winding up orders instituted by a law firm demanding millions of shillings of unpaid legal fees.

In October last year, Mr Shollei confiscated several items including vehicles and machinery belonging to the Keroche Breweries, which he wanted auctioned on October 31, in line with a judgement he obtained from the Employment and Labour Relations Court.

Mr Shollei won a case against Keroche for unfair dismissal in 2022, where the brewing firm was ordered to pay him Sh45.5 million.

"Under instructions received from the Employment and Labour Relations Court at Nakuru, we shall sell the under-mentioned goods, vehicles, plant, machinery and accessories by public auction," an advert on the local dairies on October 27, 2023, read in part.

Planned auction

The items seized by Okuku Agencies Auctioneer included chairs, desks, drawers, computers, printers, office cabinets, plant machinery and accessories, motor vehicles registration numbers KBS 030K Lorry/Truck, KBN 129A Lorry Truck, KBY 272R Van/ Pick up, KAN 601R Lorry and KCD 860E Pick Up.

The conditions of the sale were through Cash/Bankers Cheque and Electronic Funds Transfer at the fall of the hammer.

Bidders were asked to make a refundable deposit of Sh1,000,000.

However, the firm moved to court and stopped the planned auction.

In a ruling delivered in October 2022, Employment and Labour Relations judge Hellen Wasilwa termed Mr Shollei’s sacking in November 2018, as unlawful because the former MD was not given notice or reasons for his sacking.

 Mr Shollei was fired hardly one year after he reported to work at the Naivasha-based brewery.
The former MD was headhunted based on his employment record.
His sacking stemmed from an email he sent to the top management and which was deemed as demeaning.

Read: Tabitha Karanja: I do not own Keroche, I am just an employee
 He was also accused of poor performance after the company’s sales dropped.
The court directed Keroche to pay him six months’ salary for failure to give him notice as stated in the contract.

He should additionally get 10 months' salary as compensation for unfair termination, which amounts to Sh25 million and a gratuity of Sh5.5 million. He is also supposed to be paid leave pay of Sh4.5 million.

Mr Shollei was given a total of Sh52.5 million minus the Sh7 million he was paid when he was fired on November 23, 2018.

For a firm that has been fighting a bid by the KRA to shut down its factory, over a tax dispute, Keroche’s latest legal woes have compounded the situation. Keroche is also fighting a bid to stop its winding up.

A law firm that has been defending the Naivasha-based alcohol manufacturer in cases against the Kenya Revenue Authority (KRA) in May last year petitioned the High Court to wind up the troubled brewer over a debt of Sh233.7 million.

Tough legal battle

According to a gazette notice published on May 26, 2023, the law firm -Hamilton Harrison & Mathews (HHM) Advocates sought to liquidate the Naivasha-based brewer over failure to clear the legal fees.

In the tough legal battle, the law firm wants the brewer liquidated under the Insolvency Act and an official receiver appointed as the provisional liquidator.

The top corporate law firm says Keroche has been unable to settle the legal dues that arose in the firm’s long-running fight with KRA which is still pending in court.
The wars between Keroche and KRA in 2022 saw the taxman shut down the brewer over a more than Sh14 billion unpaid tax.

 “In the circumstances, it is just and equitable that the company be liquidated,” the law firm says in the petition.

In the case filed by HHM, the law firm says Keroche’s debt stood at Sh233.7 million as at July 2022, for four different cases and continues to attract interest.

Keroche had sought to delay the demand of the payments or quash the amount but the plea was rejected by the High Court in March 2021.

The law firm says the unpaid fees stem from legal services that it rendered to the company while fighting against KRA before the tax appeals tribunal.
According to the law firm, it served the company demanding payment in March 2022, through email and registered post, but Keroche has refused to pay, leaving them with no option but to file the insolvency case.

Last year, High Court judge John Mativo dismissed Keroche’s bid to quash the legal fees arguing that it was excessive.

Keroche argued that the taxing master was wrong for basing the instruction fees against an erroneous assessment of tax demand. The brewer also said the instruction fees were excessive.

Keroche previously linked its woes to a Sh14.1 billion demand, but the KRA sought to paint the brewer as a tax cheat who owes the State unpaid taxes.

The tax battle has been charged with political undertones, after Tabitha Karanja, opted to join politics.
Ms Karanja won the race for the Nakuru Senatorial seat in the August 9, 2022 General Election.

The KRA has been demanding more than Sh14.1 billion in excise duty on the firm’s fortified wines and Viena Ice ready-to-drink vodka.

Ms Karanja has in the past claimed that Keroche suffered a loss of Sh20 billion in the closures in a period of three years due to Covid-19 and KRA.

Keroche has been eyeing more than 20 per cent of the market share with a production plant that can produce 30 different brands.

Read: Keroche boss, staff celebrate as court orders reopening
The Naivasha-based company has enjoyed steady growth since its inception 18 years ago.
But it has been in the crosshairs of the taxman in recent years, fighting tax evasion accusations.
In 2022, Ms Karanja announced a plan to lay off 400 workers, after the row led to the closure of the factory for months.

However, they later reached an agreement with KRA and the firm was reopened.
But amid the woes, recently, it sought to expand its wings in the South Rift region, after it opened a depot in Narok town.

 The brewery’s Rift Valley Regional Sales Manager Mr Francis Tallam disclosed that Keroche has so far opened depots in all the counties in the region and they were ready to venture into the market full-swing.

"We have been literally out of the market for the last one year, but we are now back. We are now visible across the country," said Mr Tallam.

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