Wananchi Group, owner of pay and internet TV firm Zuku is planing to exit the Kenyan market following a tax battle with Kenya Revenue Authority (KRA).
The firm has already contracted a US sales consultant Lizard Limited to work on a potential sale plan as top investors with combined shareholding of 85 per cent look to exit.
The three top investors include Liberty Global, Altice Europe NV and London-based Helios Investment Partners whose stakes at the company are valued at $500 million (Sh50 billion) including debts.
However, according to KRA, the three firms registered outside Kenya are just virtual vehicles used by Richard Bell, the billionaire owner of Zuku, to evade tax. Bell is involved in a Ksh3.4 billion tax tussle with KRA.
KRA appointed Bell as the tax representative of his offshore companies, a position that makes him directly answerable on the suspected tax avoidance.
“That since the management, control and operations of the three companies are undertaken in Kenya, these companies are tax resident in Kenya even though they are incorporated in a foreign jurisdiction,” read a 2016 affidavit sworn by Patrick Chege, a senior official at KRA.
The companies are registered in Mauritius but operates from Nairobi, according to KRA.
A detailed breakdown of the ownership structure for Bell’s companies indicates he founded East African Capital Partners Ltd, the ultimate owner of the Zuku brand but through several intermediary companies.
Technically, Bell owns Zuku through different companies, as illustrated in the chart above.
