Alykhan Karmali, the former owner of Acacia Mall sold the multibillion property from Mauritius.
This investigative website has established that the offshore transaction took place at about 3 years ago (2019) between Gulfstream Investments Uganda Limited (seller) and Lexington Properties (buyer).
Knowledgeable sources revealed that Mr Karmali, a reputable Kampala businessman of Asian origin running a family business- Mukwano Group of Companies, registered Gulfstream Investments Uganda Limited as an individual company.
“Gulfstream was registered in Mauritius, an island nation in Indian Ocean and therefore he has been and is still using the same company to run his personal businesses,” said a source.
Acacia Mall too was under Gulfstream Investments which explains why the transaction happened in Mauritius exonerating the two companies (buyer and seller) from paying taxes to Uganda Revenue Authority (URA).
CEO Magazine which the broke the story last Friday attributed the sale to frustration, corruption and over taxation which real estate investors are subjected to by the domestic regulators particularly URA and Uganda National Bureau of Standards (UNBS).
The investors are opting for Nairobi- Kenya and Dubai considering their friendly investment environment in real estate market.
“Alykhan Karmali didn’t necessarily sell for lack of tenants. At the time he sold, Acacia Mall’s occupancy levels were at about 90%. And he is not the only real estate investor divesting their interests. Other big-time investors in commercial real estate, such as DG Properties, a subsidiary of Indian billionaire businessman, Hasmukh Dawda of the House of Dawda Group and Property Services Limited of billionaire businessman, Pradip Karia are quitting town for Dubai, Nairobi and other markets- “slowly but surely”,” reported CEO Magazine.
Acacia Mall is now under the ownership of Lexington Properties a subsidiary company of the Sarrai Group- a conglomerate of diverse inter-related agro-manufacturing, cement, and foam mattresses as well as properties across East and Southern Africa.
Alykhan and other businessmen are quitting Ugandan market because of a sharp nosedive in the profit margin caused by a tough macroeconomic environment, Covid-19 compounded by an unfriendly regulatory and tax environment, which “make it difficult to meaningfully and sustainably invest in Ugandan real estate”.
Experts suggest that Covid-19 pandemic, multiple changes in the tax laws, the uncertainties surrounding Uganda’s land tenure system and the related land grab epidemic, especially in rural areas of the central region of Uganda have had a number of real estate investors start to reconsider whether it is worthwhile to leave all their eggs in one basket (Uganda).
There have been reports of investors delaying investment, abandoning projects and altogether pulling out of the Ugandan real estate market and trying their luck elsewhere.
The business community in Uganda is decrying ‘ new monstrous’ tax policies introduced by the taxman at URA tower who is largely contributing to the collapse of many companies in Uganda, foreign firms exiting and start-ups not seeing light of the day which is likely to damage the economy gravely.
Experts conversant with Acacia Mall sale said selling the property in an offshore transaction doesn’t necessarily mean Mr Karmali evaded tax in Uganda but used loopholes to avoid paying taxes which is legal.
In description tax avoidance is any legal method used by a taxpayer to minimize the amount of income tax owed. Individual taxpayers and corporations can use forms of tax avoidance to lower their tax bills.
However, Mr Karmali and other government officials have come out to deny the sale of the building.
The tycoon on Friday told fellow money business on a Whatsapp forum that he was not leaving Uganda but expanding locally and regionally.
Norbert Mao, the Minister of Justice took to Twitter to speak with authority that Acacia Mall had not been sold.
Sources suggested that Mr Mao being the line Minister of Registry of Companies in Uganda, could have searched for details of the transaction and landed on none little does he know the sale happened on Mauritius and therefore concluded there was no deal.
Efforts to reach Alykhan Karmali for a to substantiate on this new development remained futile as his known mobile number was unavailable.