Collapse of Nakumatt and other stores leaves in its wake huge losses for suppliers and lenders All under one roof and in five minutes on a Tuesday marked by uncertain weather, creditors voted to dissolve what was once East Africa’s biggest supermarket. Nothing could lift the gloom. Not even the elegiac Swahili gospel song asking God to “show His face” that was playing in the background during the voting process. Nakumatt Supermarkets died that day last week at Oshwal Centre, smack opposite the uncleared rubble of Nakumatt Ukay, one of its iconic branches that was brought down by bulldozers in 2018 for standing on riparian land. And most of the creditors, who are owed Sh38 billion, who voted for liquidation might just walk away empty handed, their investment forever buried. The creditors, made up of among others suppliers, landlords and banks, huddled together in groups, their whispers drowned by music. Some, with the final audit report tucked under their armpits, ached for re-assurance from the court-appointed administrator, Peter Kahi, of PKF. And when Kahi lifted the metal box – popular with boarding school students – to signal the end of the voting process, 92 per cent of the creditors had agreed to liquidate Nakumatt. The hopeful still believed they would get back some cash after the winding up, numerous others boycotted the vote. Atul Shah, the founder and managing director of Nakumatt, was nowhere in sight as majority of the creditors demanded that he and the other directors be investigated and a forensic audit done to find out if they had transferred the supermarket’s properties to themselves. Kahi reported that Shah and his son received unsecured and interest-free loans totalling Sh1 billion from the business, which they were yet to repay and that the family owns 11 buildings and property worth Sh3.7 billion. The Nakumatt fiasco once again brought to the fore the precarious nature of Kenya’s retail business, where success is eyed with uncertainty. Retail is a ruthless business, competitive and unforgiving when mistakes are made. Thousands of livelihoods have been ruined by it. At least three big supermarket brands have exited the Kenyan market in five years including Ukwala, Choppies and Ebrahims. State-owned Uchumi Supermarkets is hanging by a thread and staring at an imminent death. The retailer spent a better part of 2019 pleading to have part of its multi-billion debt forgiven to enhance its survival […]
