Several banks in the country have ganged up against besieged retail chains tycoon Atul Shah with a view to recovering billions in loan amounts defaulted.
Reports from Business Daily on Monday, January 6, indicate that the banks are mulling hiring a private investigator to trace and identify the assets linked to Atul Shah and his son Ankoor Shah who were the two directors of the troubled enterprise.
Shah and his son are accused of accessing interest-free loans in the supermarket's name to the tune of Ksh1 billion at a time when the once giant retailer was struggling to stay afloat, an amount that they failed to refund to the creditors.
This irregularity was exposed by Parker Randall East Africa, an independent auditor, in a report for the year ended February 2018.
These loans, Business Daily reported, were accessed with a view to offsetting costs owed to suppliers, landlords and debt to other creditors.
The directors, Atul and Ankur, were supposed to refund the money as per the agreements but when questioned about it, they admitted that they had no money to pay back the debt.
"Ideally, the directors should have refunded the company the money, but they claimed not to have it. On prosecution, the creditor can order for this based on the facts which are now available," Peter Kahi, the retailer's court-appointed administrator told Business Daily.
"The Banking Fraud Investigation Unit is investigating the retailer on theft and money laundering. On the recovery bit, the banks involved are looking at engaging a private investigator to look into the directors' affairs," he added.
Atul is also reported to be in the bad books for writing off stock worth Ksh18 billion, an act he is alleged to have committed in May 2018, weeks before the supermarket's troubled operations brought it to its knees.
The publication also announced that on January 7, 2020, the retailer's creditors would meet to vote on whether to dissolve the once giant retailer after efforts to revive it amounted to naught.
The creditors, who include banks, suppliers, and landlords are reportedly owed Ksh38 billion by the once largest chain in the region.
