KUMBUCHA FIRM SHUTS DOWN – COURT ORDER
The High Court has ordered the liquidation of the famous Elixir Kumbucha drink after it failed to settle huge debts including taxes to the Zambia Revenue Authority (ZRA).
The Kitwe High Court has since appointed a Provisional Liquidator to wind up the affairs of the company – Gavi Beverages Limited – which produces the famous Elixir Kumbucha energy drink. The closure has been necessitated by huge debts which the company owe suppliers including ZRA.
Justice Pengele issued the order of appointment on 11th November 2024 in Kitwe after over USD 5 million dollars held in the company account at Indo Zambia Bank mysteriously disappeared without the knowledge of the company directors.
The Company owes the suppliers of bottles, ginger and sugar for non payment on invoices while ZRA is owed on unpaid taxes including withholding taxes and income taxes.
“The company had money to pay the debts but the bank connived with other shareholders who are in India to move the money out of the company account without board approval,” the source said.
“The money has now been found in an account at Isaac and Partners law firm. DEC and FIC have since instituted investigations to find out how the money moved to the law firm when there was no resolution,” the source said.
“It is pure money laundering by the bank and the shareholders as there is no court order nor board resolution to move money into private law firm,” the source said.
The movement of money from company accounts to the private law firm was another attempt to avoid paying ZRA taxes and transfer the money to India where two of the shareholders are currently based.
Over 100 workers have been affected after the money was moved as they cannot receive salaries and allowances while the money sits in the account of Isaac and Partners. It is not clear how the law accessed the funds hence the investigation by FIC.
The shareholders, who are Indian brothers, have been embroiled in a long battle for the control of the company in the last three years.
Two of the shareholders, Syam Reddy and Uma Reddy, fled the country and are based in India while the company is managed by another brother Madhu Reddy but has no access to the funds after the bank restricted him.