knew was going to be a big market in the
future. He successfully pitched the idea to
an accountant friend who pooled together
a group of investors to put in the seed
money.
The business was in a rather specialized
technical area and although the investors
were on the board they offered little
operational support to the business that
thrived as anticipated but soon plateaued
as it became apparent that future growth
would be slow and competition could spell
its death knell.
What had been touted as a billion shilling
company was looking more and more like
one of hundred million but the founder
was having illusions of grandeur and
behaved as though he was running a billion
shilling company and even ventured into
other unrelated businesses without board
approval.
His take was that since he had managed to
identify the initial business in which they
had invested, he was equally capable of
identifying other opportunities and hence
did not expect his board to question his
genius in regard to where the company
was going.
The founder had such a persuasive persona
that he had convinced half the board
that he was the chosen one to take the
company to the billion mark in spite of the
fact the fact that all his ventures outside
the original concept had miserably failed
and had lost the company a lot of money.
Fortunately the core business was intact
hence it was able to fund his more
outrageous ventures but an attempt by the
investors to contain his misguided attempts
to prove that his correct identification of a
market need that they ventured into did
not necessarily mean he was a visionary
entrepreneur.
The Legal Roadblock
The angry and officious looking KRA team
entered the office of the managing director
and founder of a successful manufacturing
concern that had taken on established
businesses and was making a respectable
dent on their market share.
But it was not praise that had brought
the officers to the office that morning
but a demand note for a hundred million
VAT back tax that they claimed the
organization owed the government but
54 MAL34/20 ISSUE
We struggled to find successful African
businesses in the hands of the second
generation while this was quite com-
mon among the Asians and we won-
dered what business dynamics were in
play that made success illusive for the
African founders.
which apparently took the director
by surprise as his books were in order
according to his accountant.
After a lengthy and confusing meeting
the company was made to understand
that they should have been adding a VAT
component to their sales and reporting
the same in their books and eventually
remitting the same on a monthly basis
together with their other taxes that were
duly paid.
Since they had neither charged nor
received the money the taxman was
demanding the company suggested
that they would henceforth adjust their
sales operation invoicing and begin to
collect the tax but the officers were only
interested on how they would pay the a
hundred million back tax.
Protests by the owner that he did not
have such an amount since he had not
collected it fell on deaf ears as the taxman
stated that ignorance of the accounting
procedure was no excuse and only wanted
a payment plan that was acceptable to
them or they would send in auctioneers
to recover the tax owed.
The owner pointed out even if they sent
in the auctioneer they would at best raise
twenty million if there was any buyers at
all not mentioning the people who would
lose their jobs should they insist on that
course of action.
Committing to pay the sum even on a
protracted period would remove vital
financing from the operation of the
company that it needed to not only
grow but to ensure the supply chain was
safeguarded. The taxman was not buying
the argument.
When we visited, the forlorn looking
owner was making arrangements to close
shop and look for something else to do.
He could not stop wondering how KRA’s
tunnel logic of closing his operation
would positively impact the country as he
had been consistently paying many other
taxes.
The Conniving Siblings
The case was bizarre to listen to; a
daughter had requested the court to give
her custody of her mother who allegedly
had a mental condition that made her
behave irrationally at times. On the
surface that seemed commendable and
what a dutiful daughter ought to do.
But why would you need a court order to
look after your own mother? That is such
a domestic matter what would be frowned
at in society.
It gets stranger when you realize that
the respondents who were the other
siblings actually opposed the petition. The
standoff resulted in the mother, who was
lonely and actually needed close medical
care to be abandoned in isolation in a
huge mansion with domestic servants as
her only companions.
It turns out that the husband was a
successful businessman and farmer who
left the business in her hands as the next
of kin and she had managed the business
well and kept it on track until her health
started to deteriorate.
Her grown up children who no longer
lived with her and were actually married
with families of their own were each trying
to angle themselves as the person who the
mother would pass on the business to and
hence the fight for her custody to prove
who loved her most.
The court case was only exacerbating her
medical condition and driving a wedge
between the siblings which had resulted in
them not communicating with each other
as they were suspicious of each other’s
motives and the feud had unfortunately