KRA officer testifies against Shreeji Enterprises, officials in over half a billion tax evasion case

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An officer from Kenya Revenue Authority enforcement department has told the court that 10 companies out of 17 which allegedly did business with Shreeji Enterprise Limited were buying the same products from each other in a cycle.

Investigating officer Abdul Hassan Robow told Milimani Chief Magistrate Martha Mutuku that this was an issue as it did not make any business sense.

According to the investigator, these companies were not manufacturers nor are they known or registered distributors of steel products. The court further heard that the 10 companies had also no history of importation.

Robow added that he checked where the 10 suppliers – Lalgi, Wanali, Walios, Climo, Vinati, Barwil, Josiki, Quantu, Kishna and Vidija Enterprises source their products from and established that they are not filing tax. According to the investigator, this gave him an indication that these are either inactive tax payers or entities which existed merely on a paper. The details also indicated that these companies are only supplying Shreeji Enterprise limited which is facing a tax evasion case of over half a billion shillings.

The investigating officer further told the court that from the itax system, they found that the director’s pin and those of the entities were registered around the same time.

“All the directors of these entities are young people under the age of 25 years who denied knowledge of such business or the said entities,” added Robow.

According to the investigating officers, these suppliers only filed their VAT for some time.

In the case, Shreeji Enterprises, its director Dhaval Vinoodbhai Soni and financial controller Shupathiraju Maheswara Varma are the ones charged with the offence.

Soni is charged that on diverse dates between 20th of January to 20th December 2017 being Director of Shreeji Enterprise (K) Limited, a liability company knowingly claimed value added tax relief not entitled amounting to Ksh. 454,867,754 from commissioner domestic taxes.

The Director is further charged that on diverse dates between 20th January to 20th December 2016, being the director of the said firm, knowingly made incorrect statements in value added tax amounting to Sh 261,870,642 to the commissioner Domestic taxes.

Varma is charged that on the same dates, being the financial controller of a Limited Liability Company namely Shreeji Enterprises Kenya Limited aided the said company in preparing false books of account, thereby affecting payment of corporation tax amounting to Sh 980,483,632 to the commissioner domestic tax.

Varma faced another charge of aiding the said company in preparing false books of account, thereby affecting payment of value added tax amounting to Sh 454,867,754.