KRA demands its pound of flesh from Imperial Bank owners
An Imperial Bank branch. The taxman has slapped a tax demand on a company owned by Imperial Bank’s directors, deepening woes for the embattled owners of the collapsed lender. PHOTO | FILE
What you need to know:
The Kenya Revenue Authority (KRA) is seeking the unpaid taxes from Upperview Properties, a firm owned by Imperial Bank’s deceased former managing director Abdulmalek Janmohammed and the lender’s directors.
Details of the demand have emerged in a suit filed by Upperview and Sandview Properties — also owned by Imperial Bank’s directors — seeking to compel the Kenya Deposit Insurance Corporation (KDIC) to return the firms’ documents which were seized in 2015.
Documents filed in court indicate that the KRA issued Upperview with a final demand notice on August 25, last year.
The letter threatened to attach Upperview’s assets if the Sh13 million demand was not met within seven days.
The taxman has slapped a tax demand on a company owned by Imperial Bank’s directors, deepening woes for the embattled owners of the collapsed lender.
The Kenya Revenue Authority (KRA) is seeking the unpaid taxes from Upperview Properties, a firm owned by Imperial Bank’s deceased former managing director Abdulmalek Janmohammed and the lender’s directors.
Details of the demand have emerged in a suit filed by Upperview and Sandview Properties — also owned by Imperial Bank’s directors — seeking to compel the Kenya Deposit Insurance Corporation (KDIC) to return the firms’ documents which were seized in 2015.
The documents were seized in Imperial Bank’s offices, and the KDIC claims that it can only release them after American audit firm FTI International has completed its forensic investigation into the collapsed lender.
Alnashir Popat, a director in both Sandview and Upperview, says the two firms intend to challenge the KRA demand for Sh13 million in taxes but are unable to take any action without its financial records that are in the KDIC’s custody.
Sandview and Upperview own two buildings that housed Imperial Bank’s branches in Upper Hill, Nairobi, and Mombasa.
Mr Popat says the firms had tasked Mr Janmohammed with managing their affairs hence the deceased banker stored all their financial records in Imperial Bank offices.
Mr Popat insists that the continued refusal by the KDIC to release its financial records to Sandview and Upperview is illegal as they are separate entities from Imperial Bank.
“It is noteworthy that subsequent to the filing of this application, the KRA has served on Upperview tax arrears demand notices which the applicants are incapacitated in dealing with on account of the records which the KDIC continues to hold, albeit illegally,” Mr Popat holds.
Documents filed in court indicate that the KRA issued Upperview with a final demand notice on August 25, last year. The letter threatened to attach Upperview’s assets if the Sh13 million demand was not met within seven days.
The KDIC insists initial investigations by FTI Consulting have linked Sandview, Upperview and another firm owned by Imperial Bank’s directors identified as Downtown Holdings to the siphoning of Sh44.9 billion from the collapsed lender.
The KDIC says the buildings owned by Sandview and Uppweview may have been acquired using proceeds from the Sh44.9 billion Imperial Bank fraud scheme hence it may be too soon to release the disputed documents.
Mr Popat says Sandview and Upperview had been unable to collect rent from their buildings, and that it has led to defaulting on loans of unspecified amounts that the two firms took from KCB.
The KDIC in the suit claims that Imperial Bank’s directors started a new firm — Downstream Investments — which they used to acquire a stake in Dubai Islamic Bank. The UAE-based lender has since parted ways with Downstream.
Imperial Bank’s receiver manager also claims that the collapsed lender’s shareholders induced auditors from PKF Kenya with low interest loans totalling Sh500 million to manipulate financial records.
Under the deal, Imperial Bank was allegedly to buy a Sh200 million loan the auditors borrowed from Habib Bank AG, Zurich, the KDIC holds.
