Watch the news & stories in motion: Subscribe to WeeTracker on YouTube
New details now reveal that employees of Uchumi supermarkets led to the collapse of the retailer by colluding with suppliers and distributors in a book-cooking scheme in which employees recorded supply of goods that did not reach its warehouses.
This latest revelation emerged in the court papers filed by
Uchumi in a case against one of its suppliers, Smart Brands Ltd in which it is recanting
an earlier admission of Sh16 million debt owed to the creditor.
It cited an audit by financial consulting firm KPMG which discovered that large quantity of goods from suppliers were neither ordered for nor delivered at the stores.
“It was discovered that a large number of goods from various suppliers were neither ordered for and or delivered at our stores and thus became necessary to ascertain what goods were ordered and supplied by Smart Brands whilst simultaneously verifying the Local Purchase Orders,” Uchumi said in court papers.
The listed-retail chain has been fighting liquation application by its creditors, key among them, Smart Brands Ltd which sued Uchumi in 2016 for Sh16million debt, the retailer had admitted to owing Sh16.5 mn but later denied.
In its application seeking to recant the admission of debt,
Uchumi said cited the strength of the KPMG report as part of the reasons for filing
“The proposed defence raises triable issues worthy of consideration by the court and the application by Smart Brands should be stopped until our defence and supporting documents are filed,” part of the submission stated.
Uchumi owes more than 40 companies at least Ksh3.6 billion, some of the creditors include UBA, Uchumi Staff Provident Fund Trustees, New KCC, Chandaria Industries, Euromart (Ksh67.5), Colgate, Taroni Holdings, Securitas Ltd, Interconsumer Products among others.
In only two years, the share value of the listed retailer fell by 80 per cent from Sh5 in 2016 to Sh0.96 in 2018.
As part of its recovery plan, Uchumi unveiled a recovery plan dubbed ‘Company Voluntary Arrangement’ through which Uchumi’s suppliers are expected to forfeit up to 70 per cent of the debt owed to them; equivalent to KSh2.5 billion, or lose the whole amount.
The retail chain also appointed Owen Koimburi, an insolvency expert, to help in the implementation of the proposed Voluntary Arrangement.
Featured Image Courtesy: BusinessDailyAfrica
Found the article interesting ? Follow us on Twitter to see what others are saying about it.
9500+ subscribers are getting our free newsletter on African technology, startups and innovators bi-weekly.
Made with ❤ in Africa