The audacity of monopolising an entire country

Brookside, Commercial Bank of Africa and other stories

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By Shadrack Muyesu

Early this year, the ministry of Agriculture released the now infamous Dairy Industry (Licensing) Regulations of 2018. Inter alia, the Regulations proposed to criminalise the selling, offer for sale or exposure for consumption of any milk in its raw form without a license issued by the Board. 

The Regulations further proposed to prevent producers from buying or selling raw milk unless they did so in bulk, through organised groups of farmers including cooperatives and registered companies authorised by the Board or under contractual agreements with processors. In essence, they were aimed at kicking the small retailers out of the market.

Obviously, the biggest beneficiary of the changes was the Kenyatta-owned Brookside Dairy Limited which controls the dairy industry. Brookside owes its dominance to an aggressive acquisition strategy that has seen it take over established competitors such as Molo Milk– initially part of the Buzeki Conglomerate; Sameer Agriculture and Livestock Limited (SALL), the Sameer Group subsidiary which owns Daima Milk; Delamere Milk and Yoghurt; Kilifi Milk, Tuzo, Ilara, Lea and Ever Fresh and crippling those who have resisted take-over like New KCC. 

Meanwhile, the Keroche Breweries couple, Joseph and Tabitha Karanja as well as Africa Spirits Limited Proprietor Humphery Kariuki have been charged with evading taxes in the excess of Sh44 Billion. It is curious how, for so long, the taxman failed to spot the anomalies with many pointing an accusing finger at ex- KRA boss and President Uhuru Kenyatta’s bosom buddy John Njiraini under whose tenure the crimes are alleged to have happened. Even more curious is the fact that the arraignments come barely a year after Kenyatta acquired a major stake in East Africa Breweries Limited (EABL) whose dominance Keroche and Africa Spirits threatens.

Grapevine has it that on this particular tax issue the late billionaire businessman and former head of Civil Service Jeremiah Kiereini’s shares in some big company were up for sale, which a hot shot wanted. As fate would have it, Joseph upstaged him, and the ODPP/DCI were set upon him and his empire like hounds upon a carcass.

It will be remembered that, in an unprecedented move, in June 2017, Uhuru personally launched the EABL owned Senator Keg Brewery in Kisumu. At the time, the plan was for the Standard Gauge Railway to halt at the mooted industrial Park in Naivasha. This plan has since been abandoned and the railway, thanks to another round of borrowing spearheaded by Kenyatta himself, is on its way to Kisumu. Amidst all this, commentators remain adamant that the SGR need not extend to Kisumu, or Malaba, for it to break even; it needs to have made sense from the very beginning. Kenyatta’s stubbornness on the issue is curious, to say the least. 

Apart from Commercial Bank of Africa, no other Kenyan entity has been accorded such preferential treatment

If the urgent need to bridge the budget deficit is being used to justify the arrest of the alcohol magnates, how does one explain a recent gazette notice by the National Treasury exempting the transactions relating to the proposed merger of the Philip Ndegwa-owned NIC Bank Group PLC and the Kenyatta-owned Commercial Bank of Africa from payment of any Stamp Duty? Shouldn’t KRA’s policy of minimum wastage apply equally? If successful, the merged bank will have an asset base of Sh466 billion making it the region’s third largest after KCB and Equity. 

Activist Okiya Omtatah has filed a lawsuit challenging the impugned waiver of Stamp Duty. In the court papers seen by the Nairobi Law Monthly, he challenges the fairness, reasonableness and legality of the exemption stating that, inter alia, it violates Article 210 of the Constitution of Kenya, 210 (1) to the extent that there was no public interest to be served by exempting the two banks, which are private profit-making entities, from paying the share transfer tax due. 

With the notice, the taxman is set to lose some Sh350 Million. He says no other entity has been accorded such treatment.

He also avers that the Cabinet Secretary in charge of the National Treasury at the time, Henry Rotich, violated Article 94(5)of the Constitution when he disregarded the process provided in the Statutory Instruments Act, 2013 for making subsidiary legislation. Among others, the Legal Notice was neither supported by a regulatory impact assessment report nor was the report (if any) published in the Kenya Gazette and the newspaper in accordance with the law. It was also not tabled in parliament for discussion. 

The matter is pending in court.(

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