Sunset Hotel, 40, goes bankrupt – Business Daily

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Economy

Sunset Hotel, 40, goes bankrupt


The Government-owned Sunset Hotel in Kisumu County. PHOTO | FILE | NMG

Summary

  • Sunset Hotel had cumulative losses amounting to over 117 million shillings at the end of June last year. This is an increase from the 89 million shillings committed as of June 30, 2016.
  • The 40-year-old hotel has also been cited for violating section 41 (1) of the 2015 Public Auditing Act after failing to pay unpaid audit fees over the past 13 years.
  • By law, a Crown corporation whose accounts are examined and audited by the Auditor General is required to pay the costs of the services.

Sunset Hotel has been declared technical bankrupt, according to the latest report released by Auditor General Edward Ouko.

The report says the oldest hotel establishment in western Kenya suffered cumulative losses of more than 117 million shillings at the end of June last year. This is an increase from the 89 million shillings committed as of June 30, 2016.

The statement of financial position also reflects a negative working capital of Sh 27 million as the amount increased from Sh 82 million in fiscal year 2015-2016 to Sh 55 million in fiscal year 2016 -2017.

“In view of the above, the hotel is technically insolvent and its sustainability as a going concern depends on financial support from the national government and creditors,” the report said.

The 40-year-old hotel has also been cited for violating section 41 (1) of the 2015 Public Auditing Act after failing to pay unpaid audit fees over the past 13 years.

By law, a Crown corporation whose accounts are examined and audited by the Auditor General is required to pay the costs of the services.

Sunset Hotel has not paid a balance of over 45 million shillings as of June 30, 2017, including 4 million shillings of audit fees.

Other costs include value added tax (VAT), payment as you earn (PAYE) and withholding balances of 11.5 million shillings, 5.4 million shillings and 1.4 million shillings, respectively, in arrears owed to the Kenya Revenue Authority.

Mr. Ouko, however, indicated that the arrears and penalties continue to result in additional charges in accordance with the VAT law and the income tax law Cap 470, which have not been incorporated into the statements. financial.

On the other hand, the State hotel is accused of not having paid the compulsory deductions relating to the contributions of the National Social Security Fund (NSSF), the National Hospital Insurance Fund (NHIF) and Cotu.

This means that the hotel failed to comply with various aspects of the Pension Benefits Act, the Labor and Employment Act and the Cooperative Societies Act, the report notes.

Regarding the 4.6% stake of the former Kisumu City Council, Ouko stressed that the same has not been transferred to the Kisumu County government as required by law.

It comes as Kisumu governor Anyang ‘Nyong’o disagreed with Tourism Finance Corporation (TFC), which owns 95.5% of the shares, over the decision to redevelop the hotel at a cost of $ 300 million. of shillings.


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