The Directorate of Criminal Investigations has launched a hunt for one of the country’s most reclusive tycoons on suspicion of evading taxes.
A raid on Mr Humphrey Kariuki’s Thika-based Africa Spirits Ltd plant by Flying Squad officers Friday found smuggled ethanol, 312,000 litres of illicit liquor and 21 million fake Kenya Revenue Authority stamps.
Some of the popular brands produced by the plant include Bluemoon vodka, Legend brandy and Glen Rock whisky.
Through its subsidiary — Wines of the World Beverages — the firm also imports and distributes leading brands of wines and premium whisky from North America and Europe.
The brands include Zappa, Bacardi and Southern Comfort.
Kenya Revenue Authority commissioner of intelligence and strategic operations Githii Mburu, who was part of a high-powered government team that raided the factory, said the plant has not been remitting Sh3 billion in taxes every month.
Those in the team included Inspector-General of Police Joseph Boinnet and DCI head George Kinoti.
“We found about 21 million counterfeit stamps at the factory. That means the commission would have lost Sh1.2 billion. In one production shift, the amount of tax lost is about Sh93 million,” Mr Githii told reporters.
The government gets about Sh200 in tax from a litre of ethanol, the main ingredient of alcoholic beverages.
Mr Githii added that for every 20,000 litres of smuggled ethanol, the government loses about Sh4 million.
Mr Kinoti ordered investigations into how the businessman has been smuggling ethanol from neighbouring Tanzania.
He also ordered a chemical analysis along the chain, right from the source.
That, the DCI boss added, would establish what kind of alcohol the company has been selling to consumers.
“We want to establish the exact components used in making the concentrates, their sources as well as quantities,” Mr Kinoti said.
“A report on how the plant has been supervised by relevant agencies for all those years must also be prepared. State officials found to have taken part in this scheme will face many charges, possibly even murder.”
KRA officials said the plant initially operated on Mombasa Road, Nairobi before being moved to Thika in Kiambu County where it began large scale production began in 2014.
Mr Kinoti said the charges that await the billionaire would serve as an example to businesses using unorthodox means to operate and make profits.
Mr Boinnet said Mr Kariuki’s is a case of massive tax evasion.
“The plant made fake products that may have destroyed the health of thousands of Kenyans,” the police boss added.
Last year, the government scuttled Wine of the World Beverages bid to exclusively import and distribute exotic wine and spirit brands from seven international suppliers to avert a monopoly.
In a statement, the Competition Authority of Kenya said the company’s exclusive distributorship agreements with the distributors would have seen it dominate the market and lock out rivals at the expense of consumers.
It is not the first time the businessman finds himself on the wrong side of the law.
He was linked to money laundering claims at Charter House Bank.