Choppies planned exit spurs Sh173m row with taxman

The planned closure and exit from Kenya of troubled Botswana retailer Choppies has intensified a tax dispute with the Kenya Revenue Authority (KRA).

The High Court in Nairobi has given Choppies and the KRA 14 days to explore an amicable settlement of the dispute.

Choppies had opposed KRA's move to freeze its bank accounts to secure Sh173.3 million in taxes.

The mov, KRA argued, was informed by the fact that Choppies is in the process of winding up business in Kenya and it may quit without settling tax obligations.

KRA said Choppies had already sold branches, assets and stock to Tuskys, Chandarana, Quickmart and Appmatt supermarkets without informing the taxman in spite of the ongoing dispute.

In March, Choppies put up for sale equipment and property in Kenya. This came weeks after scaling down local stores from more than 15 to two.

The retailer, which did not specify in regulatory filings in March how much it expected to fetch, said proceeds would help retire some debt.

“Operations have since been scaled down to only two stores and negotiations are ongoing to sell equipment to local operators and/or existing landlords to clear some of the outstanding liabilities,” said the Botswana Stock Exchange-listed retailer in a circular to shareholders.

The sale plan came four years after it acquired Ukwala stores for Sh1 billion as a launch pad to East Africa.

Choppies owns 75 per cent of the Kenyan unit with the balance held by local shareholders Export Trading Group.