Firm seeks to join Kingsway, KRA case

An auctioneer contracted by the Kenya Revenue Authority to seize Kingsway Tyres and Automart’s assets in a bid to recover a Sh2.4 billion tax claim in 2004 wants to be enjoined in a suit the tyre manufacturer has lodged against the taxman.

Speedman Commercial Agencies has filed an application in the High Court seeking to be enjoined as an interested party, arguing that it wishes to produce crucial evidence that might determine the outcome of the suit.

The auctioneer has said in its application that the outcome of Kingsway’s suit against KRA may directly affect the outcome of another suit it also lodged against the taxman in 2005 seeking agent fees to the tune of Sh67 million.

Speedman MD Philip Wishaminya has said in the court papers that the Kingsway’s suit, his firm’s suit and another by activist Okiya Omtatah against all three of them raise similar issues, and the evidence would be helpful in determination of the case.

“The application has a direct bearing on my civil application of 2005. It is therefore in the interest of justice that I be enjoined to shed light on issues raised in the aforesaid application,” said Mr Wishaminya.

Kingsway has in its suit accused KRA of using non-existent informers to falsify the whopping Sh2.4 billion tax claim. The conspiracy, Kingsway says, was orchestrated by KRA officers aimed to defraud the firm of money.

READ: KRA used fake informer in Sh2bn Kingsway tax claim

Kingsway boss Nitn Shah has said that the claim is too colossal to demand from a company trading in tyres.

The demand was first made in 2002 after a raid on the tyre dealer’s offices following a whistleblower’s tip claiming the firm had evaded tax between 1992 and 2005.

Reports in 2011 claimed that the taxman had requested to pay the amount in installments of Sh1.5 million each week as soon as the claim was made, but went on to lodge a suit against the taxman.

Mr Omtatah’s suit has accused the three firms of colluding to ensure that the tax claim against Kingsway was not effected. Speedman had in its 2005 suit claimed that it seized and sold some of Kingsway’s property to recover the Sh2.4 billion, but that the taxman had failed to pay it agency fees.

KRA denied the claims, arguing that it had not collected the money from Kingsway. KRA had in 2008 made a fresh claim for the money, but was informed that the firm had closed shop in 2004, shortly after the claim was made.

Mr Omtatah in his suit accused the firm of changing its name from Kingsway Tyres and Automart to Kingsway Tyres Limited as a ploy to evade the demand. He wants the parties compelled to ensure the claim is effected.

The court file went missing in November last year shortly before a judgment was delivered.

Justice George Odunga on Friday directed that parties file their written arguments regarding Speedman’s application within 21 days, and return to Court on December 8.