Nakumatt Supermarket chain association with former Kilome legislator Harun Mwau is stifling efforts to revive it, a parliamentary committee was told on Thursday.
Peter Kahi, the administrator, told the Senate Committee on Tourism, Trade and Industrialisation that many strategic partners had him approached to explore a possible deal but changed their minds when Mwau's name was mentioned.
“Strategic partners have been coming. They are still coming but once you mention Mwau, they just go away,” Kahi, the administrator, told the committee.
Kahi, who was picked by the court to try to save the chain from collapse added that Mwau had further worsened the efforts to save Nakumatt by demanding Ksh7 billion.
[caption caption="Nakumatt CEO Atul Shah (right) and Administrator Peter Kahi"]
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The committee, chaired by Kirinyaga Senator Charles Kibiru, was told that the politician had called and demanded to be included in the payout plan.
However, Kahi had doubts when he discovered the debt was not recorded accurately in the books of accounts he received when he was appointed the administrator on January 22.
The court-appointed administrator told the committee what he received in the books of accounts did not match the actual situation on the ground.
He further revealed stocks worth Ksh18 billion was not on the shelves although the records indicated it was received. Kahi further noted the directors claimed to have written it off but this was not the kind of money that could easily be written off.
Senators asked Kahi what afflicted Nakumatt and the administrator revealed the model on which the supermarket chain operated was unsustainable since the cash flow was geared towards its expansion.
“Other than the brand name, the supermarkets own nothing. They thrive on the brand as they own no assets, even the stock is supplied and paid for after it is sold. Depending on the landlord is not good. This model should be reconsidered,” Kahi told the Senate Committee.
Notably, Mwau had shares in Nakumatt but sold them to Chief Executive Officer (CEO) Atul Shah at a cost of Ksh7 billion before it ran into bad debt.
[caption caption="Former Kilome legislator Harun Mwau "]
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The company owes different entities, including government agencies, to Ksh40 billion.
