Companies

KRA slaps Ambassadeur owners with Sh150m bill demand

amb

Ambassadeur Hotel in Nairobi’s central business district. PHOTO | FILE

The Kenya Revenue Authority (KRA) is demanding Sh150 million from the owners of Nairobi’s Ambassadeur Hotel, who are embroiled in a battle for control of their late father’s vast estate.

The taxman has already recovered Sh114 million in corporation tax after attaching two bank accounts held at NIC and Co-operative banks.

Ambassadeur Investments has, however, obtained a court order barring any further withdrawals by the taxman.

Details of the KRA’s move have been revealed in a suit filed by Ambassadeur Investments, owned by the seven sons of deceased tycoon Samuel Maina, opposing the taxman’s demand.

Justice Roselyn Aburili has ordered for the temporary unfreezing of the two accounts and stopped the taxman from collecting money from them until she has determined the suit filed by Ambassadeur Investments.

The KRA is yet to respond to the suit, but Lady Justice Aburili has directed it to file a replying affidavit before February 28 when she will hear the matter and give further directions.

“On December 6, 2016 we received a letter sent by the KRA in which they acknowledged that they had received Sh114 million from our bank and they demanded for payment of the balance. The sum being demanded is exorbitant and illegal.

“As opposed to rushing to order our accounts be frozen, the KRA ought to have undertaken an assessment as provided for by the Tax Procedures Act, 2015. All the rental income realized from the assets of Ambassadeur Investments has always been held at the two accounts,” says James Kihara Maina, one of the Ambassadeur directors.

READ: Tycoon’s sons in vicious fight for control of Nairobi Ambassadeur hotel

Ambassadeur says that since the KRA froze its accounts in November, its tenants have been unable to remit rent for spaces let in its various properties in Nairobi, Athi River and Murang’a.

“Since Lloyd Masika was mandated by the court to be collecting rent on behalf of Ambassadeur Investments, none of the shareholders has ever withdrawn money from the two accounts.

Ambassadeur Investments wants the judge to order the KRA to refund the Sh114 million collected from its bank accounts and to carry out an assessment of the firm’s books to determine how much is due in corporation tax.

The seven brothers are in a separate suit fighting over control and management of family assets.

Francis Chege, Joseph Macharia, James Kihara and Dedan Muthaiga have sued their brothers John Kaguma, Stanley Kariuki and Charles Kanyunga to stop them from collecting rent until the suit has been determined by the High Court.

Mr Chege, Mr Macharia, Mr Kihara and Mr Muthaiga claim in the suit that their brothers appointed Paragon Property Consultants to collect rent from family-owned properties without consulting other siblings.