A Chinese engineering company’s unpaid KSh266.9 million tax bill ended with its Karen property auctioned.
A Chinese-owned engineering company has lost its fight against the auction of its Karen property.
The Environment and Land Court upheld the sale of the property for KSh131.2 million.
Justice Oscar Angote ruled that the auction complied with statutory requirements governing tax recovery.
The judgement clears the way for Triple Four Arrows Holdings Limited to take ownership.
It also offers a detailed look at how KRA can enforce unpaid tax debts.
The dispute pitted the Chinese engineering company against KRA and the successful auction purchaser.
At its centre was a valuable Karen property, a substantial tax bill and contested valuation.
Tax Dispute
China National Overseas Engineering Corporation (Kenya) Limited became entangled with KRA after a tax audit.
The audit covered the company’s tax affairs between 2015 and 2020.
KRA examined corporation tax, PAYE, withholding tax and value added tax during that exercise.
It subsequently issued additional tax assessments totalling approximately KSh266.95 million.
The assessment comprised KSh201.07 million in principal tax, penalties and accumulated interest.
Principal tax accounted for KSh201.07 million, while penalties reached KSh9.81 million.
Interest added another KSh56.07 million, pushing the overall liability towards KSh267 million.
The Chinese company did not successfully challenge those assessments before enforcement began.
KRA subsequently moved against the company’s property to recover the outstanding tax debt.
On June 2, 2023, the authority notified the Registrar of Titles about its claim.
A restraint was then registered against the property, restricting dealings with the land.
The company nevertheless failed to settle the outstanding tax liability with KRA.
That failure eventually triggered the statutory auction process under the Tax Procedures Act.
Auction Underway
KRA instructed Rachael Wanja Mungai, trading as Toplink Auctioneers, to sell the property.
The auctioneer issued the required redemption notice and notification of sale.
The first auction was scheduled for March 20, 2025, but was later suspended.
The suspension followed discussions between KRA and the Chinese company over settlement.
Those discussions ultimately failed to resolve the outstanding tax liability between both sides.
KRA therefore instructed the auctioneer to proceed with the sale on December 5, 2025.
A fresh valuation was obtained before the renewed auction could proceed.
Icon Valuers Limited placed the property’s market value at KSh171 million.
The same valuation placed its forced-sale value at KSh128.25 million.
The auction was subsequently scheduled for February 3, 2026, at Agip House, Nairobi.
Triple Four Arrows discovered the sale through an advertisement and expressed interest.
It eventually emerged as the highest bidder after offering KSh131.2 million.
The company initially paid KSh32.8 million, representing the required 25 per cent deposit.
It then cleared the remaining KSh98.4 million on February 25, 2026.
KRA confirmed receipt and application of the money towards the company’s outstanding tax liability.
That payment transformed the dispute from an auction challenge into an ownership battle.
Triple Four Arrows approached court seeking an order formally vesting the property.
Value Dispute
The Chinese company opposed the application, questioning both the auction and the property’s valuation.
It argued that the auction process had failed to meet several legal requirements.
Among its complaints was an alleged failure to provide a proper forced-sale valuation.
The company also questioned the transparency of the bidding process itself.
It sought evidence, including bidding records, auction returns and details of competing offers.
Its strongest argument, however, concerned the property’s alleged undervaluation during the auction.
The company produced another valuation placing the property at approximately KSh307 million.
That figure was more than twice the forced-sale value used during the auction.
The company therefore argued that the KSh131.2 million sale price represented a serious undervaluation.
But the auctioneer disputed the allegations and defended the entire process.
She told the court that all required notices had been properly served.
She also relied on the December 2025 valuation supporting the reserve price.
The successful KSh131.2 million bid exceeded the property’s KSh128.25 million forced-sale value.
The auctioneer therefore maintained that the property was not sold below its reserve price.
Justice Angote ultimately accepted that explanation and rejected the former owner’s objections.
He found that the December valuation complied with the applicable auction rules.
The valuation had also been undertaken within twelve months before the auction.
The judge declined to treat the later KSh307 million valuation as proof of wrongdoing.
He noted that no evidence demonstrated defects in the earlier valuation’s methodology.
The Chinese company had also failed to obtain an independent valuation before the auction.
That opportunity, the judge noted, had been available before the property was sold.
Ownership Transfer
The court also rejected the company’s reliance on Section 97 of the Land Act.
Justice Angote distinguished a chargee’s sale from KRA’s statutory tax-recovery powers.
He found that this auction arose under Section 40 of the Tax Procedures Act.
That distinction mattered because KRA was enforcing a tax liability rather than a mortgage.
The judge further found that the required notices had been issued and properly served.
The property was advertised more than 14 days before the eventual auction.
Triple Four Arrows was recorded as the highest bidder during that auction.
It subsequently paid the entire purchase price according to the agreed sale conditions.
Justice Angote therefore found insufficient evidence supporting the Chinese company’s allegations.
He also held that constitutional property rights did not prevent lawful recovery of established tax debts.
The court consequently ordered the property vested in Triple Four Arrows Holdings Limited.
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The Chief Land Registrar was directed to register the vesting order and new ownership.
The Deputy Registrar could also execute documents necessary to complete the transfer.
The Chinese company was ordered to meet the costs of the proceedings.
The judgement leaves Triple Four Arrows with the Karen property after paying KSh131.2 million.
For KRA, it reinforces the authority’s ability to enforce unpaid taxes through property auctions.
For the Chinese company, the ruling closes another avenue for recovering control of the property.
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