The director of London Distillers Kenya Ltd, Mohan Galot, appeared in Nairobi court in 2021 facing allegations of orchestrating a tax evasion scheme that allegedly deprived the government of over Sh2 billion. The prosecution claims the company, which produces brands like Kenya King and Safari Cane, manipulated records to underreport production and sales volumes between 2016 and 2018.
According to court documents, the firm is accused of purchasing 272,989,752 bottles and producing 7,941,539 litres of spirits during the period. Investigators allege the company concealed 527,250 litres of production through associated entities, paying taxes on only 359,162 litres via the EGMS system. This resulted in an estimated Sh1.4 billion in unpaid excise duty, with additional unpaid taxes totaling Sh1.04 billion across 2016-2018.
Galot is charged with 18 counts of omitting tax return entries, including Sh226 million in unpaid taxes for 2017 and Sh814 million for 2018. He denied all allegations and was released on Sh1 million cash bail. The case highlights systemic tax avoidance in Kenya's spirits industry, with prosecutors citing complex financial structures to mask revenue streams.
The 2021 prosecution follows a 2016-2018 timeframe for the alleged offenses, with investigators noting the company activated 1,610,150 EGMS stamps representing 527,250 litres of production. Only 359,162 litres were officially declared, creating a tax gap of 168,088 litres. The case is being handled under the Tax Procedures Act, with the company's financial practices under scrutiny.
