Kenya Presidency say has Shs 1.2 Billion Bailout for Uchumi, Will prosecute Ex-bosses for Financial Misconduct

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Kenya Presidency said has gathered enough evidence to prosecute the former directors of  Uchumi Supermarkets for gross miss conduct which has made the retailer run empty shelves.

Last year, Uchumi Supermarkets board fired its chief executive officer Jonathan Ciano after an audit into the cash flow problems revealed that him and the finance officer Chadwick Okumu were involved in “gross misconduct and gross negligence”.

Kenya President spokesperson Manoah Esipisu also said the country’s Industrialization Cabinet Secretary Adan Mohammed will give a presentation on the proposed Sh1.2 billion bailout for the retailer.

“The money going into Uchumi comes from the hard-earned taxes of Kenyans. They want to satisfy themselves that it will be used properly. One way to do that is to ensure there are consequences for past misuse,” Esipisu said.

“There has already been a forensic audit of Uchumi. The Cabinet Secretary’s understanding is that enough evidence has been gathered to press charges against persons who may have mismanaged its cash and assets. There will be accountability.”

He said suppliers will not be harmed by the re-organisation and injection of the cash.

“Great care has been taken to protect their interests. The Cabinet Secretary and Uchumi management have consulted closely with them. We are glad to say whatever plan is presented will have their support,” Esipisu said.

He said the government is injecting Sh1.2 billion to resuscitate the one-time prestigious outlet.

Uchumi has been struggling to pay suppliers since late 2014, and the board said it plans to sell non-core assets worth Sh2 billion – such as land – to pay suppliers, the lifeline in a retail chain. Early this year, it was revealed that Ciano was one of the top suppliers of the fresh produce sold at Uchumi outlets and always paid himself in advance the Star newspaper reported.

The region’s budding retail giant also hit headlines when it closed operations in Uganda and Tanzania in October 2015 following a financial crisis. Uchumi in a statement said outlets in Uganda and Tanzania made up only 4.75 per cent of the entire business operations yet they accounted for over 25 per cent of our operating costs.

Esipisu said if properly managed, the outlet will provide an excellent market for Kenyan products.

“We believe that opportunity should not be lost, which is one reason for the proposed cash injection,” Esipisu said in his weekly media address.

“He said the CS will spell out the full terms of the cash injection proposal in his presentation to the Cabinet tomorrow.

With Files from: The Star