Why Parliament is set to investigate Bidco - Daily Nation

Parliament to investigate Bidco for alleged tax evasion and labour irregularities

Tuesday October 25 2016

Bidco Africa Ltd staff at the company’s Thika

Bidco Africa Ltd staff at the company’s Thika factory on November 20, 2013. Twelve individuals, through Kiambu Town MP Jude Njomo, have presented a petition to the National Assembly seeking to have the company investigated for alleged tax evasion and labour irregularities. FILE PHOTO | NATION MEDIA GROUP 

Bidco Africa Ltd, one of Kenya’s top manufacturers, will be investigated by Parliament over claims that it mistreated workers and evaded tax running into billions of shillings.

The allegations of tax and labour irregularities are detailed in a petition by 12 individuals presented to the National Assembly through Kiambu Town MP Jude Njomo and backed by all MPs who commented on it.

The consumer goods company is headed by Vimal Shah, a director of the Kenya Private Sector Alliance who has previously been ranked as Kenya’s richest man.

He was among industry players who attended a Speaker’s roundtable with the private sector lobby group two weeks ago.

The petitioners allege that the Thika-based company’s workers are subjected to poor labour conditions at its manufacturing plants located throughout Kenya. Bidco was also reported to have deliberately classified the bulk of its 2,500 employees as casual workers.

It was also accused of limiting shifts at its factories to avoid paying workers’ contributions to the statutory National Social Security Fund and the National Hospital Insurance Fund.

EVADED TAXES

There are also claims that the company harasses and unfairly fires employees who complain about poor working conditions as well as those injured at work who claim compensation.

Bidco was also accused of refusing its employees the right to join the Thika-based Kenya Union of Commercial Food and Allied Workers.

The petitioners also alleged that the company was found by the Kenya Revenue Authority to have evaded taxes in excess of Sh1.2 billion. It was also alleged to have evaded tax by labelling its imports as raw materials while they were finished goods and falsely stating the contents of its imports.

They also claimed that a forensic audit in December 2015 revealed that Bidco’s unpaid duty and Value Added Tax between 1992 and 1998 was about Sh4.3 billion.

Speaker Justin Muturi directed the Labour and Social Welfare Committee to interrogate the petition, which by House rules ought to happen within 14 days.

“Should they find anything that they think is not in their remit, they are at liberty to make recommendations that the Departmental Committee on Trade, Planning and Finance take over the investigations,” said Mr Muturi.

The petition received the backing of MPs given a chance to comment on it.

'ECONOMIC SABOTAGE'

Opiyo Wandayi (Ugunja, ODM) said: “Tax evasion is tantamount to economic sabotage and in many jurisdictions, people accused of such a crime, when convicted, are subjected to public execution.”

Kathuri Murungi (Imenti South, Jubilee) said it would have been better had the Finance Committee been given the job.

“We need a lot of money to develop our country, for roads and if some of our investors are not paying taxes, it amounts to economic sabotage,” he added.

Chris Wamalwa (Kiminini, Ford-Kenya) said serious measures should be taken against Bidco should the claims against it be proven to be true.

“If this amount of money is not going to be paid, the government can also collapse. We’ve had this money, like NSSF, the money that will assist people in old age, some organisations do not pay,” he added.

Sunjeev Birdi (nominated, Jubilee) supported the petition but said those going after the company for ulterior motives also need to be identified.

“We should not look at someone's ethnic background but what is owed to this country must be given back to the government. These sort of allegations have been haunting this company for a while and we hope that this committee will vindicate and do justice,” she said.

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