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Karume estate in deeper trouble

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Trustee chairman of the late Njenga Karume Estate George Ngugi
Trustee chairman of the late Njenga Karume Estate George Ngugi (left) spokesman Stephen Karau (centre) and Geoffrey Njenga, a mediator at a media briefing at Jacaranda Hotel Nairobi on August 27, 2018. NMG PHOTO 

The troubled Njenga Karume Trust has been pushed into a deeper crisis following the filing of criminal charges against its trustees for non-payment of taxes.

At the centre of the suit that Director of Public Prosecution (DPP) Noordin Haji has opened against the trustees and management of the Karume estate is the multi-million shilling dispute between the taxman and the late tycoon’s estate

On the list of those facing criminal charges are Alfred Kigera Karume, Kungu Gatabaki, Jane Grace Njoki Njenga, James Raymond Njenga, Mary Wamboi Kimotho and James Kimondo Ngata.

The trustees had last month moved to court seeking to restrain the DPP from charging them with a criminal offence over a civil matter.

They had sought the court’s protection against the Kenya Revenue Authority (KRA) whom they accused of using the criminal justice system to enforce payment of civil debts and settling scores arising from a family succession dispute.

The High Court had last month directed the trustees to serve the DPP and the taxman with the suit documents and return to court this morning for further directions.

The petitioners are seeking “an order of prohibition directed at the 1st and 2nd respondents prohibiting them from prosecuting, continuing with prosecution and/or instituting criminal prosecution against the applicants in the resident magistrate court…in connection with tax demands.”

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Alfred Karume, a son of the late tycoon, is however not part of those challenging the criminal charges in the High Court despite being listed as one of those facing criminal charges.

KRA has accused the trustees of deliberately failing to remit value added tax (VAT) by the due date and of failing to remit Pay as You Earn (PAYE) tax contrary to the Tax Procedure Act.

The taxman claims that between April 20, 2016 and December 20, 2016, being the directors of Jacaranda Hotels Limited, the trustees failed to remit Sh43.5 million in VAT, and a separate Sh44 million in VAT for the period between April 2017 and December 2017.

The accused face another count of failing to remit Sh32.8 million PAYE covering April 2016 to December 2016 and a separate Sh32.5 million PAYE for the period between April 2017 and December 2017.

Mr Gatabaki, however, says in a sworn affidavit that the charges preferred against him, Mary Kimotho and James Ngata are malicious and faulty because they were not directors, shareholders nor members of the board of Jacaranda Hotels Limited at the time the said taxes accrued.

KRA issued the Jacaranda Hotels Limited with an enforcement notice on January 12, seeking immediate payment of tax arrears amounting to Sh197 million and on the same day moved to secure goods at the Jacaranda Hotel to recover the tax.

On January 18, the hotel management proposed to settle the undisputed amount within 18 months, noting that it was facing financial distress. But KRA rejected the plea and instead demanded that the debt be paid in monthly installments of Sh50 million.

The taxman further demanded payment of Sh7.9 million to pay auctioneers who had already secured the hotel’s property to recover the tax.

The trustees also told the taxman that an earlier court order blocking the sale of the hotel’s property had made it impossible to immediately settle the outstanding debt.

The petitioners argue that by end of last month, the hotel had paid KRA Sh127 million even as it continues to interrogate the taxman’s demands, which keep on mutating.

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World Bank pushes G-20 to extend debt relief to 2021

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World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.

“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.

He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.

The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.

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People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.

For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.

Debt burdens, already unsustainable for many countries, are rising to crisis levels.

“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.

ALSO READ:Global Economy Plunges into Worst Recession – World Bank

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Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans

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The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.

“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”

According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.

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Tighter Reins on Platforms for Mobile Loans

The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.

Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.

Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.

SEE ALSO: Central Bank Unveils Measures to Tame Unregulated Digital Lenders

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Scope Markets Kenya customers to have instant access to global financial markets

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NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options. 

This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.

The Scope Markets app offers clients over 500 investment opportunities across global financial markets.

The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.

The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).

The platform also offers an enhanced client interface including catering for those who trade at night.

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The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour;  Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).

The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.

Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”

He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.

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