New KCC audit query flags possible loss of billions as processor gives no clear avenue for recovering outstanding debts. New Kenya Cooperative Creameries may not recover Sh764 million owed by several supermarkets, some of which have closed shop and others facing closure.
Auditor General Nancy Gathungu has cast doubt on whether the state milk processor would recover the millions in the wake of some of the debtors stopping operations.
An audit report for the year ending June 2020 reveals that collapsed giant supermarket chain Nakumatt Holdings owes New KCC to the tune of Sh290 million.
Struggling supermarket chain Tuskys Supermarkets Ltd owes the processor Sh168 million while Uchumi Supermarket is yet to pay Sh88 million.
Naivas Supermarket Ltd for its part owes New KCC Sh217 million, the debts forming a chunk of Sh1.6 billion that the milk processor is owed by its various clients.
Uchumi Supermarket is undergoing receivership proceedings while Nakumatt Holdings Ltd is in liquidation while the status of Tuskys is yet to be determined.
Only Naivas is currently operational with Gathungu in the report released October 27 citing New KCC for only providing Sh419 million as cover for bad debts.
“In view of the above, it has not been possible to confirm whether the company has an efficient and effective mechanism to monitor debtors as well a vibrant credit policy on debt management and monitoring,” Gathungu said.
The report further reveals that New KCC’s 22 properties (land) valued at Sh853 million are at the risk of land grabbers for lack of ownership documents.
Gathungu added that the value of two disputed properties situated in Upper Hill, Nairobi which are claimed to have been transferred to third parties were not disclosed in the financial statements.
Also not disclosed were another 23 disputed parcels of land which had not been valued but were registered in the names of third parties.“The legal status of the properties had not yet been determined,” Gathungu said, “No tangible change in status of the parcels of land has been attained so far despite the fact the company has initiated legal proceedings with a view to recovering the disputed properties.”The audit revealed that New KCC was yet to make progress despite engaging the National Land Commission and the Lands ministry on the matter.In addition, five acres of the 32.9 acres of the parcel on which Miritini Milk Processing Factory is located has been encroached by informal settlers, some of whom have put structures on […]
