ATTEMPTS by Post Newspaper owner Fred M’membe to transfer assets out of the company in the middle of investigation of tax irregularities, may have compelled the raid on the company by the Zambia Revenue Authority (ZRA) yesterday.
The ZRA yesterday pounced on the Post Newspaper to conduct a search after the tax agency received information to the effect that the newspaper was engaging in tax malpractices.
It was revealed recently that M’membe tried to transfer its core assets held under the Post Courier Service – a transport fleet division – to a newly formed company Makumya Limited in which he and his daughter Akende M’membe are shareholders.
ZRA however blocked Mr M’membe’s intentions to transfer the assets of Post Courier to Makumya Limited because the newspaper transport fleet was part of the assets ZRA could seize should the Post Newspaper fail to discharge its liability over the tax arrears.
A search at the Patent and Company Registration Agency (PACRA) has revealed that the Post Newspaper is heavily indebted as is shown in the table on the right.
The Post Newspaper, which is being pursued by the ZRA for alleged tax evasion amounting to more than K18 million, is in suffocating debt with a number of financial institutions.
According to a statement by ZRA corporate and communications unit, the agency had received information that the Post Newspaper was allegedly engaged in tax malpractices and a decision was made to undertake full-scale investigation into the allegations.
Information obtained by the Daily Nation indicated that the Post Newspaper has obtained huge mortgages with Investrust Bank Plc, Intermarket Banking Limited and Zambia National Commercial Bank – most of which were in ‘‘unpaid’’ status.
“The investigations department of the Zambia Revenue Authority today (yesterday) conducted a search at the Post Newspapers after receiving information alleging tax malpractices by the Newspaper. The current investigations of the Post Newspaper is a normal process that ZRA undertakes on all tax payers that are alleged to be involved in tax malpractices. These investigations are conducted in accordance with ZRA core values which include professionalism, integrity, fairness and equity among others, the statement read.
The Post, through its financial management accountants KPMG, has written to ZRA to have the assets of its transport fleet under Post Courier Service transferred to its newly formed company Makumya Limited.
In a letter dated 5th November, 2015 addressed to ZRA assistant director (design and monitoring – policy and legislation, the Post Newspaper said it wanted to transfer the assets of Post Courier to Makumya Limited, a company owned by Post owner Fred M’membe and his daughter Akende.
Investrust Bank Plc, from which the Post Newspaper has obtained a number of mortgages amounting to about K44 million said it could not comment on the matter citing confidentiality policies.
Investrust Bank spokesperson Ackim Mwale said as a matter of policy, Invstrust Bank Plc dealt with its customers at what he termed arm’s length apart from valuing professional business confidentiality.
“As a matter of policy Investrust Bank Plc deals with all its customers at arm’s length and values the professional business confidentiality that exists between the Bank and its customers. In line with this, we offer no comment on the internal affairs of our customers, especially when such affairs do not affect our relationship with the customer,” Mr Mwale said.
On 5th February, 2015, the Post Newspaper obtained K15 million, K15 million and K7,500,000 respectively. Earlier on 29th October, 2014, the newspaper obtained a mortgage worth K11 million from the bank – all of which have remained unpaid.
The newspaper also has running mortgages with Intermarket Bank Limited at a value of K300,000 whose status is unpaid.
PACRA records further reveal that the Post Newspaper obtained two mortgages from the Zambia National Commercial Bank (ZANACO) valued at K3,400,000 and K1,500,000 on 19th November, 2008 and 21st March, 2007 respectively whose status is equally unpaid.