A businesswoman wants Lamu West MP Stanley Muiruri Muthama arrested and held in a civil jail for failing to pay a Sh10.9 million debt owed to his trade company, Stansha Limited, from a commercial deal seven years ago.
In a business disagreement that has revealed financial troubles facing the politician, Ms Alice Cheruiyot has urged the court to issue a warrant of arrest against him. Three years ago, the politician was defending a Sh487 million tax evasion case in Eldoret.
Due to deductions for loans advanced by a sacco, his monthly wage was Sh28,000 as of August 2021, according to court documents.
A member of the National Assembly’s basic pay is Sh621,250, plus a number of allowances, according to the Salaries and Remuneration Commission (SRC).
Mr Muthama has breached an agreement that obliged him to pay a monthly instalment of Sh750,000 till the debt is settled, according to Ms Cheruiyot, the director of Saunett Enterprises, in an application filed yesterday before the Milimani Commercial Court deputy registrar.
The agreement, which was recorded and adopted in court on September 30, 2021, states that if any single instalment is missed, the full balance becomes payable and a warrant of arrest is issued for Mr Muthama.
The warrant of arrest is meant to be implemented by the officer commanding the police station in Lamu or at Parliament, according to the agreement.
“Mr Muthama and his company, Stansha Ltd, have persistently breached the consent (agreement). They defaulted to pay Sh1,550,000 before September 30, 2021, but only remitted Sh750,000 and issued post-dated cheques. They have failed to pay a sum of Sh750,000 that was due on April 1, 2022,” says the businesswoman through her lawyer Robinson Kigen.
Mr Muthama’s request to liquidate the decretal amount of Sh10,927,469 in instalments was granted by the court because he was unable to offset the entire amount in a lump sum due to financial difficulty.
He notified the court in an affidavit dated August 23, 2021 that his company, Stansha Ltd, ceased operations in 2019 due to tax arrears of Sh36.2 million.
He went on to say that he was having financial troubles as a result of the Covid-19 pandemic, and that his net pay of Sh28,874 was not enough to support him and his family.
To back up his plea, he attached payslips, bank statements, and correspondence from the Kenya Revenue Authority (KRA).
Mr Muthama went on to say that he could be permanently harmed.
Mr Muthama went on to say that if he was arrested and committed to the civil jail, he would suffer irreparable harm and his reputation would be ruined.
The court remarked during the acceptance of the accord that the KRA letters indicate Stansha Ltd had a large turnover in 2018 and 2019, resulting in the massive tax arrears.
“Mr Muthama’s payslips, which have been filed, clearly show that he has deliberately over committed his salary by applying personal development loans yet he still knew he owed Saunett Ltd money which accrued back to 2015. He is currently servicing several personal development loans advanced by his sacco but has not explained how he utilised the said funds,” said Senior Principal Magistrate Dennis Mburu while allowing the monthly instalment.
The debt stemmed from a transaction in which Saunett Ltd supplied hardware goods and materials to Stansha Ltd on various dates in 2014 and 2015.
Stansha owed Saunett Sh17.3 million at the outset, although it made partial payments. Due to the failure to pay the amount, Saunett filed a lawsuit, which resulted in a favorable verdict on December 4, 2020.
Mr Muthama was prosecuted in court by KRA in 2019 for allegedly dodging payment of Sh487 million in taxes between 2013 and 2017.
